for your baby. we're here for your baby's health. this is the entire premise of their business. stuart: it is an ugly headline. you use the word asbestos you don't want anywhere near you. deirdre, thank you for being here. >> my pleasure. stuart: my time is up but here is neil. neil: stuart, thank you very, very much j&j is contributing to a the silloff. china's factories are slowing. industrial production is slowing. retail sales are slowing. the government itself is run at a pace the slowest it has been in dozen years. add that up, we score a deal with someone ends up being a loser. generally what you don't want to do. however the friction developing between ourselves and chinese we do need them as my buddy charles payne.

they don't have the wherewithal to do it. couldn't that be a kick in the heinie. we have word from "forbes" publisher extraordinaire rich karlgaard. >> neil, i haven't heard the word heiny in 30 years. so kudos to that. you're absolutely right but that. you see it in ceo confidence numbers in decline throughout the second half of 2018. and, at the top of the list of ceo worries is trade, how will it resolve. a lot of it has to do with the uncertainty than exactly where it wind up. as long as ceos are feeling

uncertain they will not deploy capital for expansion. that means upping up a new plant, hiring new people. all the kinds of things get an economy from 2% growth or 3% growth. if we're going backwards on that, then that will be sad for everyone. the other thing is, china, this is a asymmetric war. we may be hurting china more than they're hurting us but president xi can outlast president trump because president trump is answerable to the electorate in 2020 and president xi is president for life. neil: in a way, i respect the heck out of you, i might slightly differ with you on that one because even presidents for life, if they have an economy that is turning south, whatever is written on a paper to make them president for life, might not be there to see it finished, you know? >> well you know from your lips to god's ears, but he looks pretty strong right now. he has the backing of the

military which is a really important constituency in china. neil: right. let me pick apart other developments here because the president made a note of that this week china is slowing down and obviously his message in the tweet was look, they need to score a deal much more than we need to score a deal. i was thinking of that as well, rich. the president is right to say we're a haven for a lot of this cash. we don't see it in the equities markets. we certainly see it in the dollar. in and out of 18 month highs for dollar index. we're already seeing that france had a contracting figure. germany is on the verge of recession. we already know italy is a mess. that really kills me being half italian myself. but that things are getting worse over there and the, when the world economy could be at least slowing down, and that might be kind, that is not a good environment. >> no, and, i think, that if you look at any reputable forecaster, that they have downgraded their forecasts for

economic growth in 2019, versus six months ago, and we are part of the global economy. our stock market is part of the global economy. you can talk about economic nationalism all you want and president trump and his advisors talk about that a lot. we participate in a global economy. we benefit largely by participating in the global economy. by having all these great companies leaders in the global economy. the four most powerful companies in the world by market value are american companies. neil: how significant would it be to you because you follow these numbers far closer than i do, if we ended up this year down on the major markets? might be anomaly down. that would represent one of the weakest years we've seen in 10, it even though this is impressive bull market throughout that period, but how significant would that be? we close out 2018 in a little more couple weeks, down?

>> look, it happens. the market's had some pretty good years i don't worry too much about a 10 or 15% drop or somewhere in between that now. 20 is what everybody seems to agree on is an official bear market. so we have some degree to go to get there. but, look, you know, if the market settles in at 15% loss from the highs, if growth in 2019 is 20 1/2% instead of three, that would constitute a pretty good soft landing. so i think the federal reserve is also waking up to the fact that the economy is slowing. i know president trump was pretty heated about the signals that they were sending to raise interest rates, and maybe president trump was right about that. neil: yeah. we shall see. always good my friend. thank you very much. have a wonderful weekend. >> thank you, neil. neil: we're about an hour away from an unusual press briefing

that will involve the secretary of state, defense secretary of the united states, canada's minister of foreign affairs and their minister of defense and it is all over this issue of canadians who the chinese apprehended. one a former government official, one a leading entrepreneur i believe out of toronto. the chinese are holding them. we don't know where or what the charges are but a lot of this goes back when the canadians arrested the cfo of huawei and that raised concerns they were caught in the middle between the united states and china of a trade tiff. those trade talks go on but this is an interesting development here because the chinese are not letting go of this. let's get the read from the former national security advisor to john hannah. what do you make of this, joan? >> i think that the arrests are really just the tip of an iceberg, neil. this is something that goes to the heart of this new u.s.-chinese global rivalry i think we see emerging here.

we are now in the midst, i think, of probably the most fundamental transformation in u.s.-chinese relations since henry kissinger went to beijing in 1971. neil: you know what i still have trouble understanding here i thought as soon as the chinese had released on bail, meng wanzhou even though she can't leave there, she was released with ankle bracelet, she can't leave. this former canadian official they apprehended would be let go. but no. they brought him to a different location. we don't know where the location is. they took in another canadian, that prompted a warning, issue of concern for travelers to china out of our state department, essentially if you don't have to go there don't. i'm overstating it but what is going on here? i understand working on difficult tracks but this could get nasty? >> yeah, no question.

i think the chinese really want this card in their hand because they want this huawei sick tiff returned to china. they will exact a pound of flesh and demonstrate that they can go tit-for-tat with anybody that is going after the -- neil: we must have very good dirt on her, right? there is all sorts of espionage, stealing secrets, all that leveled at the company, and she is the daughter of the company's founder, but they're super concerned about this, almost way too concerned? >> well, again i don't know exactly what they have on her. the charge is sanctions-busting with iran. neil: that's right. >> i think the administration is concerned about that. but i think really goes to more than huawei and sanctions-busting. the united states is on campaign around the world with western nations to not allow huawei or zte to participate in the next

generation of wireless technology because of national security concerns. we are targeting some of the crown jewels of the chinese economy, these corporations, in high-tech. the sector that is really going to be the main front of competition and battle with the chinese over the next several decades. this is much bigger national security story about this new competition between the united states and china, that president trump, the first president in several administrations, has decided that he has to take seriously. neil: you know, what is ironic here, my producer is screaming we're going too long here, but role of can i had thattians that wanted to buttress that they didn't want to -- before this latest trade accord that they were hedging their bets and trying to increase that trade relationship with china. now they're wedged between the two of us. >> no, the canadians are right

in the middle of it. i would note, neil, in the new deal with canada and mexico there is a provision that basically bars either canada or mexico going into some kind of a freed trade agreement with china. even china is the target of that new north american free trade agreement. neil: well-put, my friend. have a good weekend. >> thank you, neil. neil: all right, john hannah. we're following it very, very closely. that is obviously very weird. we're dealing with it on many, many levels. the chinese, these are canadian bigwigs, the entrepreneur is one of the richest in canada. former frayed, economic official. these are not just people you scoop off the street and they disappear but that is kind of what is happening. it is a little unsettling one of many reasons the dow is down 450 points here. i think a far, far bigger reason has to be concerns that the economy and nation we're trying to sort of settle relationships, calm things down, is in a world of hurt and so is france and so is germany and so is italy, and

so is spain and so is portugal, and so is a world recovery that was on fire a little more than eight months ago, now contracting, contracting, potentially in the final month of the year, setting the stage for a worrisome 2019. then there is johnson & johnson, one of most widely acclaimed international behemoths on the planet, all of sudden concerns it knew for decades that asbestos was in its baby powder. not good. a big chunk of the dow falloff today. more after this.

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neil: all right. it's bad but could be a lot better if you took johnson & johnson out of the dow mix right here. is a big attribute e contributor to the selloff. it is down on reports that it knew, maybe for years, that asbestos was in its baby party. the company has a lot of explaining to do and explain to a lot of investors who have selling to do. gerri willis. >> this is big story. reuters reporting that johnson & johnson has known for decades that its baby powder contained a small amount of asbestos known for causing

canner. this comes from several internal documents and memos that johnson & johnson shared with attorneys for clients who claimed that the products are cause of their cancer. but the company's website tell as different story details the safety of talc it is demonstrated in ingredients that few ingredients have the same performance profile as cosmetic talc. a j&j spokesperson responding, plaintiff's attorneys out for personal financial gain are distorting historical documents an intentionally creating confusion in the courtroom and media. we reached out to johnson & johnson ourselves for comment but we have yet to get a response. j&j shares off 9% accounting for a quarter of the plunge for the major index. send it back to you, neil. the company lost 24 billion in

flashingket cap. they are facing 6,000 lawsuits. neil: gerri, incredible. there is a issue of a possible shut down, you would think they would work like 24/7 in washington to deal with this, right? the house took a long weekend. not just a weekend, when i hear long weekend, hear friday and monday off or whatever. no they're off right through wednesday. they come back wednesday evening i believe. only a couple of days later we could be facing a shutdown. chad pergram there with the latest where this is all going. chad? >> the reason they're out until wednesday night they really doesn't have any other legislative traffic until something is teed up to try to keep the government open. neil, like late at night you to into a late night restaurant and diner, it says limited menu only. that is kind of what they have right now, a limited menu only. there are only some exit and entrance ramps on this highway. there are so many things they can order up. approve a spending bill for entire fiscal year until

september next year. they can do six of the bills with the exception being the homeland security bill, maybe do that on an interim basis. something with the wall in it or something without the wall in it. something has to give. there are only about four options on the table and richard shelby, the chairman of the senate appropriations committee indicated this seemed like a road to nowhere. with the house not coming back until next wednesday i talked this is like the stockholm syndrome where they bring members in before the holidays, after a couple of days they start to sympathize with their captors, they will vote for anything. that is part of it. by squeezing this time right before the friday deadline a week from today, that is really also putting a squeeze on president trump. in other words, if congressional leaders are able to cough something up, dare him, only go days, mr. president, what can you accept, that's key? this is as much a squeeze on president trump as it is on members of congress, neil. neil: all right, chad pergram, thank you very, very much. want to introduce to you a

fellow who wrote a phenomenal column on this saga. he is nolan findley, writes for the detroit news. what a way to step back from the professional wrestling, kabuki theater, whatever you want to call it. nolan, good to have you. i thoroughly enjoyed your column. i love the line that said, if this is the government we're paying for, close it up, stop wasting our money. we can't afford to keep it open. i went on to say if we can't balance the con budget at economy is surging even at 3 1/2% clip, we're not growing our way out of deficits. you get beyond the debate for a 5 billion-dollar wall and funding for it. you cut to the core of the matter. it is not our spending priorities. the fact that no one is paying attention to the numbers themselves, right? >> that's right, neil. we don't have the money to build a 5 billion-dollar wall. we don't have money to build a gingerbread house. we're out of money.

it strikes me as absurd, that donald trump, nancy pelosi, chuck schumer in the oval office bumping bellies over a government shut down to get funding for this wall. if we're going to shut down the government, we're going to have a budget standoff, it ought to be over a federal budget deficit that is going to hit a trillion dollars this fiscal year, or national debt that will hit over $21 trillion. neil: i thought that was brilliantly put. i'm using really as a shield, nolan, because of criticism i got, no matter how you feel about that wall, no matter how you feel about spending for the military or democrats protect entitlement programs, what have you, we have to realize a lot more money is going out than is coming in. and that is the crisis. if you think about it, some years back that is the reason why standard & poor's downgraded our triple rating. that was before of any government shutdown because of the chicanery here and the kabuki theater around it.

neither party is addressing that. they merrily and happily ignore it. >> a republican president, republican majority in congress, when is the last time you heard words of debt and deficit coming out out of the oval office? republicans are conservatives. i'm a conservative. they seem to have forgotten their pledge to cut spending and institutionalized it. we are spending every year a third more than we take in. how long can we do that? what happens when the economy turns down? where will we get the money for stimulus spending when we're already a trillion dollars this year out of whack? neil: one thing you point out the at end of the editorial, i urge people to read it, it is brilliant. >> i appreciate it. neil: it cuts to the core of the math problem. you say trump, pelosi, schumer are preoccupied with only who will get the blame. the president could come out on top of the eyes of american people if he would lose

obsession with too expensive wall and present his antagonists with a balanced budget, or one that sets the budget or short term course towards balance. that is a cause worthy of a government shut down. not that you would be against a shutdown but make it a higher cause, right? >> make it worthwhile. i think we ought to shut it down. we can't afford to keep it open. but if president trump is looking to restore himself in the eyes of the american people, if he took nancy pelosi and chuck schumer a budget that demanded a 10% across the board cut, say, i think the people would rally to that because folks are starting to realize, this deficit, that is $60,000 for every man, woman and child in america. that is our share. that is your children's share, your grandchildren's share, your grandmother's share. $60,000 each. and the average household income, the medium household income in america is $60,000. we can't keep, we can't keep on

like this. neil: yeah, no matter how people feel about the wall, it is priority of yours, really think it will make a difference, by all means force the issue but then tell me how you will pay for it, address some issues? same apply to democrats equally adamant against it but want to use the money for other priorities there is nothing in the till, but we have to state our priorities but we don't do it, do we? >> no, we don't and if you look at this budget, it makes your hair stand on end if you have hair. 1.3 trillion is what we spend in discretionary spending. that is what congress has at its discretion to spend. the deficit is one trillion dollars. almost everything we spend, other than entitlements is on the credit card. and that's, that is a debt that is a real debt. it is real money. future generations will have to pay it off. neil: and you explained it in very few sentences as few have. i appreciate that. thank you very much, nolan.

love to have you back. >> thanks, neil. appreciate it. neil: as nolan said here, we have 3 1/2 trillion dollars comes into washington, right? maybe 3.25. with looking at moneys from wall street. that is a lot of money. you can fund a lot of stuff with that. but we spend a trillion dollars more than that. that is the problem. i always tell people who are very, very rich and millionaires who go broke. they're millionaires, but they're spending like they're billionaires or multi-hundred thousand heir and spending like a millionaire. the government does that on steroids. that's the problem. more after this. meeting the increased demand for lithium, an estimated 800,000

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has that political sense. he's a tough guy. i think the real issue is whether or not people within the white house are going to accept chris christie walking in there an becoming chief of staff. he is going to have to build a relationship, not only with the staff but i think with the president's family members as well. neil: that is no easy task, coming from leon panetta served as bill clinton's chief of staff. remember back in 1994, bill clinton's administration seemed to be tumbling, going nowhere fast, clinton reached out to the former house budget committee chief, i need guidance and discipline here. we're all over the map. we don't have a cogent message. leon panetta instilled that discipline, made sure all appointments everything were handled through him. he had dust-ups with bill clinton that we might point out he did leave beef the whole

monica lewinsky thing that would ohio cure later. point he is was a very strong chief of staff, whatever the politics. left or right you need someone like that. dick cheney served that role for gerald ford. no fool head of the staff, making sure president just came in after the richard nixon resignation, would instill discipline for the white house. for a couple years he did. let's get the read on all of that, even the christie name that came up, because that gets bandied about a lot with charlie gasparino. what do you think? >> he was a very good chief of staff. and i kind of know a few of these guys because i covered wall street. a few of them went into -- josh bolton, who was senior executive at goldman sachs, went into, was george bush, george w. bush's chief of staff. neil: right. >> listen, here's the thing. he laid out that you need someone who is independent. you need someone willing to tell the president, you need a president that is willing to listen. neil: that is --

>> this is very dysfunctional white house. the real chief of staff of this white house is president trump. the deputy chief of staff is jared kushner. i can tell you, i spoke with at least two people who don't want the job because that is who they are reporting to. the chief of staff in name reports to jared and trump in a way that, you know, will undermine his ability to keep order in the white house. neil: you have family there. >> what the hell is family got to do with this? this is running a country. neil: who will tell ivanka you can't see your dad or jared kushner you can't see your father-in-law? >> it is not like can't see. shut up, this is the business of government, ivanka. you don't have the that much government experience. jared, who was your last job to tell me who to put in here and how to arrange -- neil: they have to be on the same page. bobby kennedy was his brother's attorney general. everyone got along. >> bobby kennedy had a lot more experience. just wasn't --

neil: it is very hard, with some presidents to take that. richard nixon bristled at any suggestions of chief of staff during watergate. there is always that friction, no matter who it is coming from. >> you have to manage the presidency. it is very difficult. neil: absolutely. >> what i understand, general kelly, i just tweeted this out, general kelly is telling people he has no -- neil: you tweet like the president? >> yes. i don't tweet like -- by the way i don't misspell as much as the president. not as much. neil: do they have spell check? >> yeah. neil: i digress. -- reporting by the way among the candidates to your point earlier, what we were saying, christie for the time-being is the leading candidate. >> yeah, maybe. again general kelly, the current chief of staff says he has been given no termination date. why is that? neil: originally was supposed to be the end of the year? >> it is very questionable when he is going. he is telling people. why is that? bottom line they don't have a candidate. neil: how weird would christie be in the role coming back with

jared kushner, he sent jared kushner's father to jail years ago? >> the feeling i got, they're putting it out there. maybe he is putting it out there. but i'm telling you for that to happen it would be miracle, you don't see it happening? >> i don't see it. anything is possible. trump won the election by 80,000 votes and lost the popular vote. neil: how did chief of staff become a thing? cabinets doubled in size? >> we don't see all the hard work. neil: no, no, republican, and democrat, a lot of work. >> public, it is not like a public job you giving speeches and everything. this became much more of a job job that was public because general kelly literally had to stop donald trump from his absolute worst impulses doing crazy stuff. he still couldn't get his hands on the twitter page, on twitter feed. i can tell you at least two candidates said we don't take the job unless we control the

twitter. it was like, no way. that is part of managing the white house. when he tweets out stuff crazy about michael cohen, he may, the president may think that is real good thing but staff has to put it all back in the bottle. sarah huckabee sanders has to figure out how to address that at a press conference. it is distraction what you need as a government, run a country. deal with china. you have to deal with nancy pelosi and chuck schumer. neil: one unnamed official it is like managing a tornado. a very smart, gifted tornado but a tornado. what we say of you. >> thank you. neil: it is not a compliment. >> i don't tan as much as donald. neil: thank you, my friend, very, very good. we shall see. you're not interested in the post? >> you know i'm not qualified for this job. there are many jobs i'm qualified for. dog catcher. neil: busboy. >> busboy. sanitation -- neil: dick grasso when he was

married would make me head of the sanitation department. neil: perfect. perfect. our careers have been amazing. thank you very much, charlie gasparino. let's take a peek at the dow. charlie comes up here we shave 70 points off earlier loss. >> there you go. neil: he is about to leave. >> i'm good for something. neil: we're picking up again. stay with us.

♪ neil: it is hard to be focusing on trade issues with china when we keep picking up reports of hacking and a lot more involving china. this case targeted the u.s. navy. some of these reports are early and a little spotty, suffice it to say that the chinese might behind of a long list of such hacks by the way not just with the navy. if they mirror something you heard before like espionage and all the stuff you're seeing about their role potentially in this mariott breach that

involved millions of customers, you get the idea morgan wright was right when we told me these things begin to grow and we find out more and more later. what do you think of this. >> i'm shocked to be right to begin with this. i'm an old barnyard. this looks like a roosters making a lot of noise. i'm worried about the fox, waiting for something more strategic. china is a fox. they're involved in everything from espionage to influence operations. they're opening up schools in the u.s. combined with schools here in the u.s. and china. they have influence operations, confucius institutes. these folks have a 100 year plan. we're clueless about a lot of. we think in election cycles. we have to think beyond that. our biggest strategic threat in the world is china. neil: so, i don't know the details what is going on behind the scenes, morgan, maybe you do, on these trade talks, i had not heard, oh, yeah, you got to stop hacking us.

i heard stop stealing our intelligence and our corporate info. lists of marriott and all of that but, if this isn't included i'm wondering it complicate as general trade deal itself, right? >> look, neil. there are valid targets. we have valid targets. we go after their military stuff, things that inform our intelligence and inform our policies on national security. china us did the same thing. for them to keep breaking into marriott. forced technology transfers, taking companies forcing them to divulge the technology so china can take it over and kick the u.s. companies out of china, there are rules even gentlemen follow in warfare. china is not following rules. everything is fair game. including our critical infrastructure. private corporations are stealing intellectual property from technology companies simply because they don't want to develop it themselves. there are definite lines china crosses but disguise it in the

confucius institutes, educational institutions. they spread it around everywhere. bigger things. they're using their economic muscles to be involved in building a wall around the south china sea, places like that economically. what will happen, china will regionalize that whole part of the world. it will be tough to put them into a box we can control. we can't do that. neil: morgan, if a company is asking you for advice, we want to go in there because they have a billion plus people, that is a great market. >> right. neil: we know they might be looking over our shoulder and a lot of our technology but it is well worth the prize of admission, you say? >> i wouldn't say, it is not worth of prize of admission after watching google testify and looking at the a.i. center they opened up in china, refused to work with the military in the u.s. you have to start drawing a line. if you to to china, realize your intellectual property will end up in the hands of the chinese, and the chinese military. that's a fact. neil: wow, i wasn't prepared for you being so blunt.

morgan write. >> merry christmas neil. neil: despite the saudi threat which was kind of weird, when you think about it, say what you will whether the president was right to side with the saudis in khashoggi killing, many in his own party, many democrats say we want to stick them to the wall, not help them in the battle in yemen that helped killed tens of thousands. the president did firm, did not want to do that. what did the saudis do to return the favor. they talked about cutting oil production that would lift prices. what some say a case of supreme justice, oil is tanking. it reversed after gains yesterday. essentially going south on the same amount it went north. go to alan knuckman watching this very, very closely. without getting involved in the politics of it, alan, i'm wondering what you see for oil and where it's going? >> we're still sideways. it has been more than three weeks between 50 and 55. so we're right about that

midpoint. this week we gave up a couple dollars on a weekly basis. the dollar made new highs. so that put commodities under pressure here, like you said there is a lot of politics involved. that is the beauty of the price discovery process of the market. it takes all the supply and demand issues, boils it into one thing, the price. there is always price shock propotential with crude oil. there is something out there that could give it a push above 55. that could make everybody pay attention to the market once again. neil: do you think what has been rattling the markets in general, is oil and then, this concern of a global slowdown, maybe china with some numbers that aren't strong? france looking like it is contracting, germany maybe following suit, italy and all that, that is a bigger worry for the markets, not so much whether we score a deal but once we do? >> the global growth story is the concern. you're seeing that in numbers. you talk about china numbers we would love to have china out of

consistent basis. retail numbers, production numbers came out today, significantly above ours, maybe a bit of slowing on their part. what we're missing from the global growth story is the positive. the positive you're looking at the board above me, short-term interest rates, that will be no movement in short-term interest rates from what the markets tell me for the next five years. we're staying exactly the same. i have never seen this before in my trading career. we've seen nothing in the futures markets as far as the eyes can see. neil: you're referring that the markets are betting short-term interest rates where they are now they will stay for years? >> they will stay, all the way out, looking september of 2024. it's a flat, flat pricing right across, right across the board. so no rate hikes for the next five years, essentially what the markets are telling us. obviously that can change. hopefully will relief a lot of concerns people had about higher interest rates and, weirdly enough, we were concerned about higher interest rates in march. then we were concerned about the

decline in interest rates over the last couple weeks. i think we can put that off the table and focus on the global growth story and i think it has been overdone to the downside. yes there is a little bit of a pull back but the global economy has a strong seem ahead for a long time. they're just taking a little bit of a pause. neil: look at that a little bit here. if you're right, the short term rate environment, they're making a bet it kind of stays where we are, which is half where rates should be if you argue at this point in the cycle, and they don't do anything to change that, that could be a slowdown or worse environment, right? >> well that's forecasting not a whole lot of strong growth where they would be able to raise rates. so you can look at it as a positive or a negative. i tend to look at the fact that rates are going to be stable and that is one thing we haven't had, everybody wants for christmas here on the floor is certainty. c for certainty. we've had no certainty in 2018. this is such a unique market

environment. that is what the markets strife for is to have some sort of certainty. there are some moving parts and moving pieces i've never seen before in my history maybe a little bit of stability give us confidence once again. neil: you're a very young guy, alan. your history is a month. i'm kidding. >> 1990. 1990, when i started. neil: you old man. alan, thank you very, very much. always a pleasure. >> thank you. neil: that is an interesting development there. i had not realized if you go out five years investors are betting with their money, short-term interest rates, two years or less will hang out where they are for that long. if you make that assumption, people making that assumption, betting with their own money that will happen, you could weigh it both ways. so we don't have the federal reserve interrupting by chasing inflation because there is nothing out there, but you can also read that, federal reserve stopped hiking rates because the

economy doesn't justify it. you see what i mean half full, half empty glass? it is confusing, isn't it? that's the world we live in. more after this. place, the xfinity xfi gateway.

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neil: all right. i told you how china is in a world of hurt right now. still no trade deal. their retail sector is

contracting, industrial sector slowing down, overall consumer activity the lowest it has been in 15 years. quite a different story for us evidence the latest retail numbers out. they rose in november. that eased fears of a slowdown in this country, up 4.2% from a year earlier. even activity at department stores and non-department store retailers pretty respectable so what is going on there? will we see a holiday boom or not? will it continue or signaling that? former jcpenney chairman allen questrum joins us. what do you think is going on here? >> first, neil, how are you? you look great. neil: you as well, sir. >> i think what is going on is the consumer in america is very happy about the world that they see. that's why i think you will see a very, very strong christmas. they have not been as involved with the world trade issues, and the economy in the world because america has done absolutely

terrific this last year, year-and-a-half. and i think they feel good about themselves. i think that the job market has been very, very strong. incomes are going up. when you have that around you, people feel good about what they're going to do today. what happens in the future is another question. but retailers, retail market is about what is happening to me right now. that is with the customer saying they like what is going on around them. so i'm very positive about that, at least through the holiday season. neil: you get a little different vibe from traditional department stores. their sales were down. not much, 0.2% from november last year. i prefer the year-over-year comparisons, if you will indulge me. the non-store retailers, led by likes of amazon though, they were up 10.8%. so, i'm wondering, whether we should separate them like that? they love to spend. they would like to have easier, efficient way to do it and city spending but what do you make of that? >> there are certain categories

of certain stores are doing well and certain are not. you can't put all the bricks and mortar into -- there are a lot of bricks and mortar stores in mall doing white quell. i would put costco into bricks and mortar store even though their stock is down today. their performance was outstanding. american eagle was out with a terrific report but the stock is down. i think if you're doing the right things for the customer, what make as retailer work, they are taking care of their customer. i think some department stores are not staying up on their game. i think there are challenges. i think a lot take them on. macy's doing a lot of things on positive track. neiman's is doing a positive track. that doesn't mean they may not have financial problems in terms of credit but i believe a lot of these young people in the trade have great challenges. i think that speaks fun for

them. i think they're taking challenges on. i'm very encouraged to see what some bricks and more mortar areg and making their customers happier campers. neil: they would have to feed me constantly to me enjoy being in ama. that is whole another issue for me personally. >> i would not want you fed constantly. that would not be good for you. neil: all right, all right. i hear you. >> i think going into a mall is still exciting. many women an many men they like to see and touch and feel the goods. neil: that is overrated, alan. it is overrated, touching is overrated. all right, fine. i want to raise with you all kidding aside what my last guest was talking about, those bet on interest rates, i'm sorry we're running out of time, for next five years, markets stay where they are, short-term rates. how do you read that? >> i think that, i certainly think the fed is becoming a little more balanced. and i think powell is a pretty

balanced guy. i think they're not going up dramatically. that is part of the concern of the stock market is the trade relationships going on and what is going to happen with the fed. he will be balanced guy. he may go up a little bit. but i don't think he will go up dramatically. i feel pretty good where he is. what i'm concerned about, getting more positive, i think we will solve the trade issue. sigh the trade issue solved, we'll see a very strong stock market. neil: certainly waiting for that to happen. alan, always good to see you, my friend. have a wonderful holiday. >> happy new year to you,. neil: alan questrom, former ceo of jcpenney. a retail giant and pine near. we'll look whether you're enthused about shopping after this.

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applied. the smackover formation in southern arkansas may hold one of the most significant lithium resources globally. the key to unlocking this resource lies in deploying advanced lithium extraction technologies and standard lithium leads the industry in the application of these processes. learn more at standard lithium com. neil: all right. we will be taking you to washington, the state department. mike pompeo and jim mattis, defense secretary along with canadian minister of foreign affairs, canadian minister of defense, they are going to be discussing a lot of things about china. not exclusively, but they are concerned, particularly canada, canadian officials there, because the chinese have apprehended very wealthy canadian entrepreneur, michael spavor and michael kovrig, a top

diplomat. it was thought to be a tit for tat, the canadians for taking meng wanzhou, from huawei, but they wouldn't send her back to china. she still has an ankle bracelet on. she posted bail and can't leave canada. the chinese are furious over that. they scooped up this former diplomat and entrepreneur and the thing that's kind of wacky about that, we don't know where these guys are. they aren't just like picking up me or you on the street. these are big deals. no one knows where they are. this in the middle of talks with china where we are trying to cobble an agreement together. at the same time we have the markets in complete disarray, wondering if that will ever happen. and, and a slowdown going on in china, rather pronounced slowdown at that. we will get into all that. one of the reasons why the dow is down 445 points. edward lawrence, who is always

following these things, can explain in far better english than i. this canadian thing, with the chinese, that's a little unsettling. reporter: very unsettling. what i have been told from officials i have talked with here in washington, it's kind of quite a coincidence, these two were taken. today, the china foreign ministry spokesperson released a statement saying those two canadians, foreign legal rights are being protected, but again, would not say exactly where they are or how they are being detained. china did confirm today that they are postponing for three months the increase in tariffs, 25% on u.s. cars coming into china. that prompted good news out of tesla. tesla says they will reduce the price of the model s and model x in china. tesla saying the price of the model s will drop by $15,200. president donald trump o optimistic about the prospect of a trade agreement, tweeting out

today, calling this a trade war with china, still saying china announced their economy is growing much slower than anticipated because of our trade war with them. they have just suspended u.s. tariff hikes. u.s. is doing well. china wants to make a very big, a big and very comprehensive deal. it could happen rather soon. members of congress, republican and some democrats, support the way the president is going after china. >> took us a long time to get into this trade war, get into this trade mess, get into this trade deficit. it's not going to change overnight. but give the president credit, he has made tremendous strides. i have been a long supporter of the president. i was overwhelmed by the success he's had in the trade realm so far and i'm fundamentally a free trader. reporter: he, like the president, would like to see low or no tariffs going forward. for their part, the chinese are making proposals for structural changes. they want to change the made in china 2025 plan to downplay the goal of dominance in the tech

industry, also open the market possibly to further company participation in this. in fact, minutes from a government council meeting were released yesterday. president xi was in charge of that meeting. those minutes show that president xi wants to have continual structural reforms and speed up modernizing the chinese economy. chinese experts are warning, though, they want to make sure this is not just superficial, these are actually changes that will take place. again, waiting to hear more comments from secretary of state mike pompeo, also their foreign minister. they will be asked about what's happening between the chinese and canadians and the u.s. that sort of triangle. neil: you are too young to remember this, but it's the old reagan trust but verify, right? reporter: that's exactly what it is. i have heard that over and over again from folks in the white house. trust but verify. they are excited about what the chinese are doing in terms of the moves they're making but they actually want to see it on paper written out and there's going to be some sort of enforcement written into that,

i'm told, going forward. we'll see. neil: thank you very, very much. edward lawrence at the white house. very good way to sum up what's going on. again, we are waiting for all of those leaders to come forward and talk about what's going on there, because this is not just an ancillary story to china. the chinese economy, by the way, in the middle of all this. we got disturbing news out that retail sales dropped to their lowest level in 15 years. industrial production is slowing as well. the general concern here that the numbers, specious though they have always been thought to be coming out of china, when they are slowing, dramatically slowing, something is amiss. wouldn't that be a kick, we get a trade deal and all of a sudden we are doing it with a weak puppy and they're not able to make good on it. not because they're not going to keep their word, if you give them the benefit of the doubt, but because they can't. the economy is contracting. we are a long way from that but those are some of the fears and why we are down as much as we are. france isn't helping matters any, with a similar report that shows maybe contraction going on in that economy.

i keep mentioning but for good reason what's happening in italy, in portugal, and certainly by extension right now in germany. the strongest economy in europe is on the verge of entering a recession. let's get the read from brett aarons, gary b. smith and hadley heath manning. hadley, one of the first things i noticed with china is i know we have to compartmentalize everything about how they cheat, steal our stuff and all but if we can cobble out a trade deal it will be well worth it. but man, oh, man, taking top canadian officials, they disappear into the night, we don't know where they are, makes you think twice about who you're dealing with, doesn't it? >> oh, absolutely. i think the good news from today's economic numbers out of china is that the tariffs are working and the bad news is the tariffs are working. when we imposed tariffs on a trade partner like china, we're not always able to punish the right parties or put pressure on

the right parties and that's what makes tariffs an imperfect instrument. i think what you mentioned about the canadian officials, absolutely looks like a tit for tat. i think we heard the words quite a coincidence earlier. i don't think it's coincidence at all. unfortunately, this is not just one headline but really demonstrates a track record with china, where they do not respect rule of law or due process or human rights, and that's something that's going to be very hard to compartmentalize and take out of the picture when we talk about a trade deal. neil: we have to compartmentalize but gary b. smith, i'm reminded of the fact the country with whom we wanted deals is in a world of hurt. i'm wondering if that story is lost here. you get so excited, let's say, to buy a new car and you love this car and all of a sudden, bad reports come out on the car or you find out a lot of lemons have been returned. you start thinking wow, that car i always wanted, i might not buy now. i'm wondering if we're starting to rethink the value of a china

deal itself. i'm making that leap. i know you are too smart to. what do you make of that, that we're thinking china, you're hurting? >> well, your first mistake was thinking i'm too smart. let's level set first. i will say this. i think in general, maybe i'm in the minority, i don't think a trade deal is going to make a bit of difference one way or the other. i'm going to disagree slightly with hadley saying that the trade wars, the tariffs have had an impact. this is a country that is a $12 trillion gdp growing and still growing at over 6% a year but that growth, i think what everyone is talking about, that growth has been declining since 2010. but the reasons aren't the tariffs. the reasons are it was like us after world war ii. they made a gigantic shift from agriculture to manufacturing. they made a gigantic shift,

government pumping a lot of resources and it's natural that their economy would slow down, just as our growth has slowed down after world war ii. the tariffs are an incremental part but $200 billion against a $12 trillion economy, growing at 6% a year? it's really not that significant. neil: these officials are coming out here. i want to get your take quickly before they do about how significant this is. >> i think my focus on this is this is all theater. i think the previous guest was absolutely right when he talks about the questions of relevance or the scale of all this. we are talking, the trade war is very small potatoes in comparison with the size of the economies we are talking about, the size of trade we're talking about, this is all political theater. the reality, to be honest, the bigger concern about china has been the combination of dodgy

statistics to the point that i think even one of the previous premiers said i can't trust economic statistics in my own country and the huge debt pile they have there. we don't really know what's going on in china. china is and has been -- neil: i'm going to jump on you so we can hear from the secretary of state on whether this is just what you said. let's listen in. >> -- make this happen. the final deal's a home run. it modernizes nafta to address 21st century issues, 21st century economy, open trade and business, opportunities for united states farmers and manufacturers, reduce trade barriers amongst the three countries. in today's meeting it was discussed how we can continue to build off of this. take this achievement and make progress on a worldwide range of bilateral and global issues. on the bilateral front, we discussed joint efforts to ensure north america is vigorously protected by both our militaries in close cooperation with one another. we also had the chance to discuss our bilateral cooperation to promote economic

security by countering technology transfers, intellectual property theft and other attempts to acquire sensitive technology from our two countries. this will enhance security by ensuring our economic competitiveness and preserving our military capabilities. these joint efforts support a comprehensive trading relationship and millions of jobs in our two countries. in addition to domestic priorities, we worked through a range of global issues as well. we talked about our work in collaboration as members of nato. we discussed our response to the situation in ukraine. i expressed my concern over russia's recent aggression, where it opened fire on ukrainian vessels. we also had the important opportunity to discuss our shared commitment to improving security in iraq, where our nations have both made tremendous sacrifices in the name of freedom. i spoke to the importance of applying pressure on the iranian regime to stop its efforts to

undermine iraq's security. it was great to talk about how we have worked closely together on north korea and i thanked my canadian counterparts for enforcing all the u.n. security council resolutions and encouraging other countries to maintain pressure as well. of course, given the close relationship between the united states and canada, disagreements will undoubtedly arise from time to time. but our countries have always worked closely together to resolve these challenges, including through regular and open dialogue like we have had here today. i'm very confident that as rough patches emerge, we will work through each of those challenges. with that, i would like to turn things over to foreign minister freeland to make a few remarks. if you would introduce secretary mattis, that would be great. >> thank you, mike. hello, everyone. thank you for being here. first of all, i would like to thank the secretary of state pompeo and the secretary of defense mattis for their warm

welcome today. canada and the u.s. have one of the closest relationships in the whole entire world. we are allies and partners in areas such as trade, border protection and of course, hemispheric defense and international security. neil: we are going to continue monitoring this because they are obviously talking about this new mexico canada united states agreement. we are going to be flipping back when they have a chance to address this tiff the canadians have with china with the apprehension of this millionaire canadian entrepreneur and former trade diplomat. they haven't gotten to that and how this might affect the ongoing chinese trade talks, which are working on a separate level from the separate agreement we had with canada and mexico. again, canada was a late signer to that agreement which is why the mexicans are not at this particular session, but there are a lot of things that were

signed into that that call for obligations as a canadian not to favor china, to walk away, do agreements with china. not that they have to worry about that because tensions between those two countries over the arrest of the cfo of this huawei telephone concern, she is the daughter of the founder of the company. she will not bail out to leave canada and that's causing consternation in china. it's a little involved here and i don't want to get too, too much into the weeds here. i'm back with my panel. i interrupted my friend from market watch. you were talking about how much of this is drama and how much of this is real. when it comes to the chinese, you could say pretty much about any commitment they make, so leaving aside the slowdown, it's not an insignificant development, or apprehending diplomats and millionaire businessmen and all the like, what are we dealing with here?

how closely should we police everything they sign off on, assuming we get a deal? >> oh, of course, look, we are trading -- we are dealing with a country that is first of all, run by a totalitarian dictatorship and second of all, has a very -- a sort of cultural view of the world in which china basically is just number one in the sense every country thinks it's number one but it's china first and everybody else is sort of gray matter. look, the chinese are going to ruthlessly pursue their own interests, dishonestly or honestly, and always will. i don't think under the current regime, you can put an enormous amount of faith in the good offices of the chinese. what i would say, i think it's very important for people following the markets and people in business to separate out headline risk and fundamental risk. i think there are enormous headline risks involved in trade

spats, in arrests and all these things which are drama which can drive the dow down 500 points or 1,000 points, and not least because short sellers and speculators will bet on other people's instant reactions. very important to separate those from fundamental risks about things that may actually cause recessions, may fundamentally harm -- we are not talking about the kind of trade wars that we all learned about in high school from the 1930s, smoot hawley and the rest of it. none of this is what we are talking about at the moment in terms of tariffs and disagreements, comes remotely close to the kind of stuff that helped prolong the great depression in the '30s. the fundamental risks are very different from the headline risks. neil: hope you're right about that. as you were speaking, i want to bounce this off you, hadley, reuters is reporting the former new jersey governor chris christie has taken himself out of the running to be the president's next chief of staff, saying the timing is not right

for himself or his family and this is now coming up in a variety of media outlets, "new york times," "washington post." that was short-lived. why is it so difficult now? why is finding a chief of staff such a big ask? i'm wondering, too, what you think the fallout will be from that wait. >> you know, i think the chief of staff is a particularly difficult role to fill. this is a position where you're in charge of a lot of the matters the white house has to respond to, but i would say particularly right now, the chief of staff position is going to be something that in terms of the conversation we were having more broadly about trade, implementing the white house's agenda here and explaining it to the rest of the country, president trump, we heard some officials talking about the new nafta deal, the usmca, and now basically this is an improvement, modernization, but not leaps and bounds different from the older version of nafta.

if president trump can come somewhere close to that with a trade deal with china, it doesn't have to reinvent the wheel, doesn't have to be the perfect deal and certainly with china i would say maybe a little less trust, a little more verify, but if he can come up with a plan like that that has better enforcement, better protection for americans, baby steps in the right direction, he can claim a political win which is something his white house needs. neil: i'm sure eventually they will get a chief of staff. for all i know, your phone will start ringing. but i am curious what you make of this global slowdown talk. whether you are looking at oil, looking at these countries reporting anemic economic numbers, it does make you wonder. it doesn't seem to be happening in this country but it certainly seems to be happening in lots of countries with whom we do lots of business. what do you think? >> i think it's happening in this country, too. it wasn't, but i think a few weeks ago you and i were chatting and they had just announced the gm closure.

i look back then and i think my gosh, is their forecasting so bad that they didn't anticipate that these cars weren't going to be selling? i think there's something deeper there. i'm seeing it, the "wall street journal" had an article about the housing crisis now on the decline in places like las vegas. whatever is the opposite of the green sprouts, i'm seeing it here a little bit and i'm seeing it obviously overseas. europe's in turmoil, china, although they are growing, the growth there is slowing. i'm not going to say there's going to be recession imminent in 2019, but i would have to say i'm at best neutral on the world's economies right now. neil: all right. guys, i want to thank you all very, very much. we are trying to get more info so i can cut this down a little bit on this chief of staff situation. for the administration, chris christie was looking like the last best chance. that might be wrong. the president had tweeted out earlier today, i believe, there

were five people under serious consideration. i don't know at the time whether he knew chris christie would take himself out of the running for that but right now, let's assume it's down to four and might have always been five but the hunt is still on. we are going to get a little more on that. we are also monitoring very, very closely the pow-wow that includes two top canadian officials and the secretary of state and secretary of defense talking about the new deal scored with canada and mexico with vast implications for a china deal that's been embroiled by the canadians now very, very concerned that a former top entrepreneur out of canada and former top trade diplomat have been taken by chinese authorities and they don't know where they are. that's generally nervewracking. which is why we are probably down 417 points. stay with us. i'm snow. and just like you, the further into winter we go, the heavier i get. and while your pants struggle to support the heavier you, your roof struggles to support the heavier me.

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neil: real quickly, i want to go to this presser that's going on with top trade officials, our

secretary of state, defense secretary. right now the question coming up was yemen and whether we are going to continue supporting the saudis in that fight with yemen. >> what is trade tension between china and united states, because china has arrested canadians but on the other hand, it has agreed to suspend tariffs on u.s. cars. >> perhaps i'll begin. we certainly thought about yesterday, we always have great respect for what the legislative branch does and we are in constant contact with members on capitol hill so that we understand fully their concerns and do our level best to articulate why our policies are what they are and how we can ensure we are getting the right policy for the united states of america to keep our country safe. and we will certainly do that in a lot of yesterday's vote and president trump has been very clear about the importance, not only importance of holding accountable those who murdered jamal khashoggi but the

importance of protecting american citizens. hundreds of thousands of people the iranians killed have been involved in their deaths all across the middle east. there's real risk to the united states of america. recall that the iranians and their explosive devices killed hundreds of american soldiers and president trump is determined to make sure that we protect america all the while remaining accountable to those who committed the heinous murder of jamal khashoggi. >> i don't want to repeat what the secretary said. i will just add that besides that vote yesterday in the senate, which we respect, there was also progress announced by the u.n. secretary general in stockholm to end the war which required our engagement with all the parties and a strategic approach to ending that war that has gone on too long. >> okay. when it comes to the case of the detention of ms. meng, canada is a rule of law country.

we believe in honoring our international treaty commitments and in respecting the rule of law and due process in our own country. in the case of ms. meng, due process and rule of law in canada has been scrupulously followed. there has been no political interference in this process. it's very important for canada that ms. meng be treated with full respect and be given full access to due process in canada, as she has been. she has currently been by the decision of a canadian judge released on bail. when it comes to the rule of law and due process in canada, including in extradition matters, canada understands that the rule of law and extradition

issues ought not ever to be politicized or used as tools to resolve other issues and that is a very clear position which canada expresses to all of its partners. it's the position which i have explained particularly with regard to rule of law in canada in a conversation with the chinese ambassador to canada earlier this week, and it's an issue which all of us discussed today. and i do finally want to say, because you have mentioned a few canadians who are detained in china, it's really important to remember these are human beings. as foreign minister, i think for me and for the prime minister, there are no issues that touch us more personally and immediately than the detention of canadians outside our

country. we're very, very concerned about these two canadians and that is the concern that we discussed in our meeting today. neil: okay. we are going in and out of that. a couple issues came up about the saudis and yemen funding issue. the president and of course through his secretary of state, the defense secretary, while they respect the legislative branch and the senate, overwhelmingly voted to condemn that and our support for the saudis in yemen. that's killed tens of thousands, if not more. secretary of state saying you think about it, the iranians just killed a lot more and we are offended by what happened, want to get to the bottom of what happened to the "washington post" reporter khashoggi who was killed at the saudi embassy in turkey here, but as far as saying that that would change or the president would go ahead and punish the saudis as a result,

that does not appear to be in the offing. separately, separately, this issue of the capture of two canadians or the kidnapping as canadian officials see it of two top officials, one a former diplomat, trade diplomat, we believe, and another, multi millionaire entrepreneur who was actually drumming up business in china at the time, they both have been apprehended by the chinese government in response to the cfo of huawei, the big telecommunications concern out of china, and the founder's daughter, for stealing secrets and other things, espionage and the like. that was the charge. she's got an ankle bracelet on. they did allow, the canadians did allow her to post bail but she can't leave the country and that's what's infuriated the chinese. that's what we're told has prompted this response that seemed to be getting in the way and that's probably an understatement, of scoring a trade deal with the chinese even though the bigger issue today seems to be the fact that whether that trade deal would be

worth it if china is in a world of economic hurt. some numbers out today seem to indicate it could be. to dow jones news wire's chief editor. that's a big chunk of the selloff today, not exclusively, i know about johnson & johnson, everything else, but we have never seen it in this light, right, that all of a sudden, everything hinged on getting a trade deal done and lo and behold, there's a possibility we get a trade deal but with a country that is just potentially entering a serious slowdown. >> all of these things do converge in terms of the market sentiment and there's a lot of feeling in the market among people i have talked to that we're working our way towards the end of this cycle and the bull run is definitely over or at least we will go into a slowing economy and slowing market, and then you have these tensions with china and you see these bad economic indicators coming out of china and out of europe and those are other tailwinds that could slow the economy further. the worries behind all of this market downturn right now are that there's nothing there to

elongate the upturn, right. if we can get a good trade deal, if we didn't have some of these other tensions you might be able to see this bull run stretch out a little bit longer. neil: the global slowdown thing, i talked to, you know, a futures trader, looked at people who put money down on where they think short term interest rates will go, futures contracts, and reminding me they are kind of where they are now for years, for five years. that surprised me. what did you make of that? >> yeah. well, we are definitely starting to see that shift into more normal responses, where the stock market's going down and you see money flowing into fixed income and we are going to have to weigh that against also the outlook for the global growth in all of these markets, right. so if the u.s. is facing a slowdown, will there be anything to help lift it up, will there be tailwinds out of europe or asia. right now the signals aren't showing there's going to be that kind of strength to keep the global growth going. neil: is it your sense looking

at this that the squabble right now, it's a little more than -- i'm not minimizing it, between the canadians and the chinese, that this extends to us? >> well, absolutely. these things are all tied together. you have, you know, anything that increases the tensions between the chinese and the united states and our ally, canada, is likely to create some kind of background noise related to these trade talks. you know, it depends on how much further this escalates. neil: all right. thank you very, very much, my friend. sorry for the truncated time. but as he got into here, this is very confusing. the only analogy i can make, it might be a stretch, if bill gates, the former head of microsoft, the founder of microsoft, just disappeared in china and they didn't explain where he was. let's say we had john kerry, the former secretary of state, former top trade diplomat, and

he's gone. they don't know where he is. think about how we would be reacting to that. this is how china is reacting to this. and china moved -- or canada reacts to that, china is furious about this, canada is saying it was perfectly justified to arrest and take in for questioning the cfo of a concern that worldwide has been cited for espionage, stealing secrets, i could go on and on, but it really mattered in canada, where the chinese argue they were doing this with u.s. blessings. i mean, that's a lot of weird stuff going on concurrently. i know a lot of people look and say you know, we don't know who these people are, we don't know this entrepreneur, we don't know whether michael spavor did anything to trigger the chinese authorities' attention or michael kovrig did anything as well. we don't know where they are.

picture two top u.s. officials in the same plight. you can understand why the canadians are upset and our secretary of state and defense secretary are upset. you can understand why investors are looking at all this and saying you know, i just wouldn't buy today. after this.

neil: you know, you don't know where the bottom is with apple these days, right? we were saying when it gets to 200, watch out. 191, 180, you know the drill. we know it's facing a lot of issues in china right now. qualcomm, for example, targeting iphone sales in the court, saying they shouldn't be sold because of slippery things apple does there. apple argues just the opposite. the chinese government supporting qualcomm in that effort. it's very, very weird. then you have all these other trade issues. susan li has the details on all of the above. what's going on with this

particular -- susan: i know. it's back and forth all the time. apple, qualcomm, it's really been going back and forth for many years. here's the latest. we know that basically, qualcomm, they won two patent infringement cases against apple in china and they were looking to ban even the newer phones like the xs and xr, the new releases from september. we know that they won basically the right to ban the older iphones, those are the 6s, 7s and 8s. now, apple today has come out with they are saying they are basically going to update their software, their ios, their operating system, next week. that means that that will actually alleviate them from these patent infringements they have been accused of in china by qualcomm. we know that apple of course has been shifting away from qualcomm chips. they have been building their own because of this ongoing battle between the two in the world's largest, by the way, smartphone market. something apple is doing very well in. they sell more phones in china

than in the u.s. neil: it's interesting, because the president tweeted concerning apple a little while ago that apple has made this commitment to hire more workers in the united states, the president saying thank you to tim cook for agreeing to expand operations in the u.s. and thereby creating thousands of jobs. susan: thousands. neil: what wheare we to make of apple's commitment here and whether it's reliable or is the company hedging its bets? susan: it is definitely reliable. when tim cook and apple, $260 billion in cash anyway, they say they are going to do something, they are definitely going to do it. we know they have been having these discussions, tim cook has been over for dinner in new jersey with the u.s. president, they have been meeting in the white house, and i would say tim cook has arguably been the best corporate diplomat this year. not only is he making good traction when it comes with the trump administration and building that multi-billion dollar project, the second campus he promised the u.s. president he would do, creating close to 20,000 jobs, this is

$30 billion spent over five years in the u.s., so he's making good on his promises while also protecting his business which is a pretty lucrative one coming from china as well. we know that apple and their products would have been caught up in this trade dispute if we had tariffs going up 25%, airpod and iphones may have actually been tariffed in this ongoing despite but looks like thanks to this trade truce that we're in for 90 days, apple arguably the big winner so far. neil: tim cook is very calm, reasonable individual. very pragmatic. while i have you, quickly, having reported in china and asia, there's this weirdness with the disappearance of two top canadians. these aren't just any regular schmos or whatever, not that that would matter, but they disappeared. we don't know where they are. susan: we know they are detained. neil: detained. forget the reasons why they're

detained, but the move that china's making here in the middle of these ongoing trade talks, why would they risk complicating that? susan: well, i would say that, you know, it's two paths right now. we talk about this, because the trump administration is trying to cozy up to china in signing maybe a trade deal by march 1st, then they are also getting tough when it comes to national security, with the huawei cfo detention in canada on december 1st for extradition here to the u.s. because huawei and meng wanzhou being accused of evading iran sanctions. the detainment in china, i think that's more of a political play than anything else. neil: what is the response to her getting taken in, and then released but on bail, she can't leave canada, what happens? susan: i think the timing is questionable. i don't think we can make a direct link ourselves but i think you can see just from the detainment of the two canadians a few days after the huawei arrest, i think you can make

that correlation if you really want to take a look at it. but i think again, it's a political one and there's been positive developments when it comes to the trade front. remember, we had the soybeans purchased, half a billion dollars worth, we have tariffs on u.s. made cars coming down and there are promises to buy more energy from the u.s. in the future. i think we are looking at two different paths. not sure we can link the two together at this point. neil: all right. hope you're right about that. susan, always good having you. thank you very much. susan li. we are following that very, very closely. the irony of the canadians in this position where they were going to use china as a wedge to not doing as much business with us, then tell china we will do a lot more with you, they were hit on both sides. there you go. after this. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis.

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neil: we probably focus on what's going on in china but don't forget about france or england, by extension, germany or italy or spain or portugal. you're just looking at two of the leading players there in a world of financial hurt and their economies potentially going along with them. let's get the read from former imf executive board member, doug redeker. good to have you. how bad is this, with france just reporting numbers that seem

to indicate things are slowing down if not contracting over there. what do you think? >> well, look, europe traditionally has been seen in the post-financial crisis world as lagging the u.s. recovery. we did a lot of pretty aggressive stuff right after the crisis and we grew as a result. europe did a lot of slow incremental things and grew a lot less as a result. the question was whether they were going to continue to grow even if we slowed down. i think what we're seeing is no, not so much. that doesn't mean they're going to go into recession, doesn't mean they're going to go and completely reverse the growth we have seen. it does mean you're not going to see this continued steady upturn in growth in europe. you are probably seeing a levelling out and that's not great, especially on the monetary policy side for europe. neil: can we continue growing if they slow down? >> look, there's a lot of things that are going to impact u.s. growth. one of them is going to be global growth and one of the big components of global growth is europe. but there's a lot of other things. you were talking earlier about china, u.s.

i would say the risks to the u.s. economy are not necessarily in the top two, three or four going to come from european growth slowdown. i think we've got a lot of other dynamics that will play out for us. neil: do you worry about this china thing? on many fronts, it's a little weird. >> depends on how you describe "this china thing" but yeah, i worry about all of it. i'm worried but i think in general, if you look at what's happened, you have chinese growth slowing, you have u.s. stock markets obviously reacting to the increasing risks of the trade tensions with china, and so you've got two leaders, whether it's president trump or president xi, who are both looking at their own domestic forces, whether it's markets or growth, and thinking you know, maybe it's in my interest to kind of come to a deal even if i'm not so pleased to do so on the substance. so i'm kind of sort of a little bit optimistic that there will be an incremental deal between president trump and president xi. that doesn't mean that it's going to solve the problem.

i think this is a story that's going to go on for a long time. in the short term, they will probably find a way to ease tensions. neil: all right. from your mouth. doug, thank you very, very much. good seeing you. have a good weekend. >> you got it. you, too. neil: what does gary think of that and what happens with the markets as a result and the federal reserve meeting next week? after this. because of smoking. but we still had to have a cigarette. had to. kayla: do you know how hard it is to smoke in a hospital? by the time we could, we were like... what are we doing? kayla: it was time for nicodermcq. the nicodermcq patch with unique extended release technology helps prevent your urge to smoke all day. and doubles your chances of quitting. nicodermcq. you know why, we know how. and all through the house 'twas the night before christmas nicodermcq. not a creature was stirring, but everywhere else... there are stores open late for shopping and fun as people seek gifts or even give some.

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neil: we are down across the board. one of the people i relied on for many a decade, i though that

surprises you that i'm so young, gary kaltbaum is here to watch that. what is going on here, bud? >> i think we're in a bear market for stocks. neil: this is a bear market? >> 70% of stocks in the s&p are down 20% now. and bear markets, you know -- neil: the average isn't. >> but it will. they always come last because full of proctor & gambles that hold them up. surprises happen to the downside in bearish markets. to the upside in bullish markets. you don't get a johnson & johnson dropping 40 billion in market cap in bull markets. i mentioned before federal express. the stock cracked wide open last couple weeks and they said nothing bad. neil: you think a bull market if a company found to have hid something that is the charge of johnson & johnson, that asbestos was in its baby powder, that wouldn't be punishing as well? >> i think it would be punishing. not $40 billion. neil: not a quarter of the dow or whatever. >> as i go through the scans,

2,000 stocks, all the sectors all the commodity, transports new yearly lows, retail new yearly lows. neil: transport is significant? >> big time. that is the where everybody asks what kind of market are we in. look at market. it tells you everything we need to know. i talked about this couple months ago, slowdowns are coming. engine of europe, germany contracted. if germany is contracting, europe is contracting. the problem there, there are negative rates, still printing money. they have no ammo left. neil: can you say their ills will be our gains? people come to us? >> their ills, are our ills. president taking a victory lap china is weakening. china is a 12 trillion-dollar economy. if they weaken it will affect us. neil: the irony score a deal with a very weak country. >> that is not good. a weakening globe does not help the u.s. in any way, shape or

form. neil: let me talk to you about this. we were talking anecdotally what is going on in the economy, your haunt, your area, order. you say all the -- orlando. all the parks are booked solid. not just my wife carrying the torch for everybody. what do you make of this? >> i think in the first quarter we'll start to see the down move as far as economic growth. just so you know, we were 3.5% expectations for the quarter we're in right now. expectations are already down to 2.4%. also earnings estimates have been coming down silently also. so i think we'll see more of that. i don't know if we'll get a recession here but definitely a slowdown. definitely an earnings slowdown. the markets are speaking loud and clear on top of the extraneous things that are going on in washington, d.c., right now. neil: talk about the couple extraneous things, president and mueller investigation. we don't know how it will end up, i understand that. >> right. neil: now all of these people

don't want to be the white house chief of staff, the latest chris christie. what is going on there? >> bad news is bad news, and worst news in these markets. we're getting hit by it every day. neil: they're not red or blue, they are green. they made a lot of money under this president, say what you will and i'm wondering do they track a little bit all of sudden, wow he could be in some trouble? >> it will not help the markets. it will keep people glued to the tv, worried about the future. this is the head honcho, top dog, big cheese of the world that is being investigated on a few different fronts right here. look, not to mention the national media. my goodness gracious, 24/7. so that impacts things also on top of what we're seeing on a daily basis. they are just pounding away at it. neil: if people are still shopping, going to parks, paying outrageous prices to get the big ol' turkey legs at disney world,

maybe we're overstating bad case? >> i think we're okay now. watch what happens in the next quarter. numbers you're seeing in europe, europe popped up nine, 10 months ago. the market has a great way of topping out six to nine months in advance of trouble. neil: we had head fakes before. >> i don't think this one is a head fake. we've seen it before. i wouldn't call it a say i don't remember. there is no doubt in my mind i'm 100% sure, next week is the last rate hike. i don't think he would have hiked rates but he has to show some credibility. after that, they're done. they will start talking dovish. neil: would be worried more if they didn't raise rates next week. >> true. maybe that could backstop things, i think at this point in time i'm not so sure it helps. remember the other part. we haven't had a bear market in '09. bear markets and bad economies have never been abolished. they come around sometimes. the big worry is debt and deficits. neil: you thoroughly bummed me out. if you waned to make sure i didn't eat lunch.

>> parks are packed and people are happy in orlando. neil: thank you very much, my friend. gary kaltbaum. known him for years. giant in the industry a good person. as this next fellow, charles payne. by the way you will see gary on "bulls & bears" later on on this fine network. what a crazy day. charles: we're kind of used to them right now the doesn't make any easier to deal with. i will try to fix that this show, neil. neil: excellent. charles: thank you very everyone. i'm charles payne this is "making money." coming up markets are deep in the red again. i'm here to tell you not necessarily all bad news. or maybe bad news is good news. we'll tell you about potential buy signals. my take on a huge spike in bearishness coming up market concerns not about tariffs but them slowing down, industrial output, retail sales. we'll look how true the stories behind the market mayhem is. how much has to do with the world maybe