2.75. something like that. interest rates down. stocks way down. oil, way down. gold up a fraction. what a day. neil, it's yours. neil: thank you very much. i was listening to this mnuchin interview. does anyone in this administration takes blame for anything. mnuchin comments on high frequency trading when the trading buy prompts buying and market moves up. that is it incredible. a lot of that on the back and forth over who to blame for the selloff. there are likely culprits, including federal reserve as it indicated yesterday will continue to hike rakes, albeit one less rate hike than original lit thought. that is an easy one to dump on. confusion whether there will be a government shut down on friday could be another issue. narrowing between the 2-year and

10-year is narrowest better part of a decade. growing concerns that is signaling a slowdown. if the two year gets higher than the 10-year, it is very, very close now, it could portend recession. that is is probably in the minority viewpoint out there but it's out there just adding to the fears. to blake burman at the white house. the house gop canceling what would have been a presser on these developments to keep the government lights on here. they're heading over to the white house to discuss a lot with the president. what are we hearing on this front? is the president changing his mind on this? reporter: there is a whole lot of movement right now, neil, last night the senate passed a stopgap spending bill that would keep the government open through february 8th t was believed house took this up today, would be enough democrats mixed with enough republicans to get it across the finish line. however, in last hour 1/2 or so, there is big push back up on capitol hill from republicans because they know very well that if there is a chance to get

money for the border wall that moment is now because, democrats will be controlling the house of representatives in the next few weeks. democrats say look, there aren't votes for that. what we have seven-week stopgap bill to fund the government. there is i don't know if you say a revolt last hour or so but. mo from republicans to say look, earlier this year, we kicked the can down the road on the border wall, kicked it again, kicked it again, kicked it again for the fourth time. they now feel many republicans the president should not give in to this moment and still try to get money for the border wall. over here at the west wing republicans meeting with president trump to figure out a way to go forward from here. this is statement that sarah sanders the press secretary put out a little while ago. she said quote, at this moment the president doesn't want to go further without border security which includes steel slats or a

wall. the president is continuing to weigh his options. the president himself tweeted about this a little while ago, he said, quote, when i begrudgingly signed the omnibus bill i was promised the wall and border security by leadership would be done by end of the year now. it didn't happen. we foolishly fight for border security for other countries but not for our beloved usa. not good. some republicans like mark walker who overseas the republican study committee, chair of the republican study committee, neil, said within the last 30 minutes or so that republicans should be willing to die on this hill. put the food down to money for the border wall. house freedom caucus group of republicans in the house if the president were to veto whatever comes his way they would stand behind him. what is passed out of the senate, what the house would take up would not include money for the border wall. 36 hours until you potentially

could get this portion government shutdown. it feels as if now, neil, this moment right here is kind of the inflection point whether or not president trump will take what could be given to him or not. neil? neil: what is amazing my friend, the president could declare victory with the apparent mexico decision to keep those caravan immigrants who are trying to get into this country in mexico while being ajudicate, a huge victory for the president. something he wanted. very few thought he could get but leave it at that but he is just not doing. reporter: separately on capitol hill, kirstjen nielsen the head of the department of homeland security testifying there, unveiling a deal announced between the united states and mexico that asylum-seekers trying to get into the country would be kept in mexico before getting to the united states. you're right, that is a victory for the president. neil: right. reporter: but the very first singular thing that the president campaigned on was the

wall. and i knows that this is his best chance at getting it. so, while it is a victory, what kirstjen nielsen announced today, neil, i would suggest the ultimate victory for the president is the wall and he knows it the moment is now. the question is, is he willing to potentially shut down the government over this like he said he would last week? neil: we'll see. blake burman, thank you very, very much. charlie brady stocks editor reminded us we are technically for the nasdaq in bear market territory. additional 2%. what counts where you close on the day. but the nasdaq has not experienced something like back i believe, charlie will be quick to correct me on this, march of 2009. but again the nasdaq has now dipped into bear market territory. 20% firm highs here. that is concerning a lot of people. that high was reached on august 29th, 2018.

we were at -- 8109. dow and s&p still a ways to go here. some people say when you get down into bear market territory even intraday, others will follow. we should posit 2/3 of the s&p 500 stocks are well into bear market territory. they have fallen more than 20%. some of the names you know, apple, netflix, google, host of others, but more are going along. there is kind of a quasi-rule of thumb, as indians go, so eventually got chiefs. we will keep an eye on it for you. charlie brady will update me if i got any of that wrong. he is our resident genius. nasdaq dipped into market territory. a lot concerned about what the federal reserve will do or not do the next year. environment for technology stocks, and again the environment right now, for keeping the government lights on past friday, looked like a done deal. might not be a done deal.

paul ryan, host of other republican leaders are in the the white house as we speak trying to cobble together something that will meet with the president's approval. blake saying no sure thing right now. get the latest from chad pergram up on capitol hill with the latest. hey, chad. reporter: look how easy it was to move this bill through the united states senate last night. they approved it by voice vote. not a roll call vote. there was no objection. you had coalition of democratic senators in the back of the chamber singing christmas carols, "rudolph the red-nosed reindeer," go tell it on the mountain, o, holy night. we thought there might be a problem when following happened. the house rules committee met late last night. this is the process in the weeds but critically important. to move pieces legislation through the house you need to get a rule to establish parameters of debate on the floor. if you don't have a rule you can't consider the bill on the floor. the rules committee never

reported that rule out. they don't have a rule to accommodate this potential government funding package. i talked to a number of republican members this morning. just not the president being over tips of his skis facing a revolt from his base but a lot of republican members told me they campaigned on this issue. they expected this to get wrapped up. they need some sort of air cover, some sort of a message from the white house on where to go here. here is another provision. this might be a way that the president would wiggle out of this. article i, section 7 of the constitution, the president has to sign all bills if they are to become law. but if they pass something and it sits for 10 days, no long as no adjournment by congress, then it becomes law automatically without his signature. so potentially you could see a scenario where the president could sit back fake a must -- make a fuss about this. not sign it. it would be a government shutdown, but it would get of the pa the deadline friday

night. keep in mind in this bill, neil there is some funding for the wall and also for border security, 1 is .3 billion for the wall, 1.6 billion for border security. neil: thank you very much, chad per gram. russell dow transports, that average also in a bear market that worry as lot of technicians, the stuff we move to move a lot of stuff to get the economy going if we're not seeing as much activity there, it could presage a slowdown or worse, not all the time, but enough of the tile it concerns a lot of the market technicianses. bob doll, market watcher extraordinaire. bob, are you worried? >> you have to worry when you see a decline in the thought process and market it in just a short period of time, neil. the average stock made its high

in january. most of big averages made new highs in the fall. we've been dropping since. you have got concerns about the economy. the fed meeting yesterday as you pointed out. oil prices falling, uncertainty in d.c. liquidity which starts to dry up because of the holidays, the the algorithmic trading the treasury secretary mentioned. neil: i found it a little audacious for the treasury secretary to blame that for selling. it might in fact be, you know exacerbating all of this. no one seems to mind when the same trade something doing that, bidding stocks up. i thought that was a loose thing to hang on to, you know? >> no question, it was part of the upside as well. it is active in the market. neil: sure. >> now we've got to wait a few weeks for earnings. that's, i think the first data point that we need to grab on to, to say, is the economy okay or not? we know earnings move stocks

over time, neil. and we'll get first-quarter earnings here in a few weeks. and the look at the fourth quarter and the anticipation and the conference calls what is coming will tell us a lot whether it is justified to have the big selloff that we've seen. neil: much has been made of the gap between the yield at a two-year note and 10-year note. smart guys like you called that the two-10 spread. it is narrow. little more than one 10th of a point. if it flips you're looking at possibility of a recession is. every time that happened since 1975 we have gotten a recession is. how much attention do you pay to developments like that and should we worry about that? >> no one indicator by itself do we worry about, neil but it's a collection of thing. this is one. if we cross the line, it already flattened whether plus 10 or minus 10 is already a yellow

flag for the market. this cycle will not last forever. we'll have a reeggs is. debate is when. my guess it is probably not in 19. in these prices market probably saying yeah, it is 19. we'll have to have discussion and more evidence. neil: thank you very much, bob doll. following as bob was talking here the financial issues are among the groups getting hit hard. technology issues as well. apple, for example, right now is down under $160 a share. that stock has fallen 33% from its highs. a lot of technology darlings "fang" stocks, likes of apple, netflix, google, all of them have fallen collectively in the vicinity of about 30 to 35%, almost 40% in one stock's case. it is hard to hang your hat on a technology rally if those issues refuse to rally. right now they are refusing to rally. what does that mean, after this?

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♪ there's no place likargh!e ♪ i'm trying... ♪ yippiekiyay. ♪ mom. ♪

unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. >> i think the market reaction is completely overblown. if you look at the u.s. growing versus europe, versus the rest of the world, the u.s. is still going to grow significantly higher. you look at a slowdown in china and marriage -- emerging markets. when you look at businesses i

still see tremendous investment dollars coming into the u.s. people investing into the u.s. neil: that was the treasury secretary with stuart varney a few minutes ago. what he leaves out as the economies across the globe slow precipitously, a big concern with china, a big concern with italy, big concern with germany, france, et.al., the less they will buy from this country or into this country. that compounds fears. the federal reserve kind of touched on the justification for curtailing rate hikes next year from three to two, hard to say. we have a former federal reserve governor with us. randall, thanks for taking the time. maybe you can help me with this. why do you think the markets were disappointed with what the fed said in its statement and what jerome powell outlined afterwards? >> well it was a so-called dovish tightening, that is they raised rates but will not raise them as rapidly i as it has

been. seems like the markets were a little bit disappointed but they were hoping for a few more doves around this holiday time and they didn't get as many as though thought they might. neil: i understand, as many doves as you thought they might, in other words, those on the board, those on the board, 17 among them went from three to two, is that what you mean? i think 11 who did from nine prior. you were, maybe the market were expecting more to go along with that sentiment. >> i think that's right. i think they were hoping for moving from a forecast of three rate hikes this year to two. i think they were hoping to go to one or -- neil: exactly. >> biggest fall would be zero but i'm not sure that was a reasonable expectation. neil: i know the federal reserve has to keep its presumed independence. many said this was the fed chairman's way of saying i will not be bullied into stopping

what i think is the right thing to do. that might in fact be the case. what do you think it would have happened had the fed not moved at all yesterday? >> i think given the way the expectations were a move was very likely. i think that would have been problematic, it would have raised questions about the credibility and independence of the fed. when clearly jay powell has moved twice since the president started his criticism of the fed. so they are going to do what they think is best independent of what the president is saying. and i think that is important in the long run for them to maintain their credibility. neil: when you were there, randall, how much attention did you pay to the yield curve? we're making a big deal now, or at least i am today because people keep telling me this in phone calls and elsewhere, that it is narrowing dramatically between let's say a two year and a 10-year note? >> yes. neil: so close that, a two-year is not all that far from

eclipsing the rate on the 10-year, you're good on speaking english, every time that happened, hasn't happened a lot, but every time it has it presaged a recession. do you year that possibility? >> it is not quite always, kind of joke we had around the fed inversion of the yield curve would predict 10 of the last four recession is. it happens more frequently than when we have recession is. the key thing to look behind it. what is driving the difference between the short rate and the long rate? because normally the long rate is above the short rate. one of the things that drives that is fears about inflation. so if you expect a lot of inflation, you have to have some compensation for that and right now there is not a expectation of a lot of inflation or a lot of -- neil: could be the federal reserve overdoing it, right? >> that is something in the past often happened because the short rate jumped because the fed has been behind the inflation curve.

suddenly inflation builds up, two, three, 4%, the fed has to zoom up. i don't think that is the case right now. we've seen inflation relatively quiet. it is around its 2% target. it doesn't, that in and of itself doesn't portend the recession but i do think we have to look at the fundamentals, exactly issues you were getting back to you were mentioning before about global shocks. about other uncertainties. neil: randall, when you were there, how much attention did you pay to the stock market? i'm always told, we ignore that. it is not in our wheelbarrow. we can't control that, but you're not oblivious to it, right? >> for sure not. we're always looking, when i was there we were looking at financial conditions and i'm sure they're still looking at financial conditions. the stork market is one indicator of that. they're trying to understand what is driving tumult in the markets? is it just interest rate increases or other factors?

i think china is one of those factors. if you look at the exposure of large u.s. firms like the ones in the dow jones or s&p 500, to china, there is a lot of sales in china, there is a lot of activity in china. if china slows significantly, that will have a big effect on the profitability of those firms even if the u.s. goes along on a reasonable track. neil: thank you, randall. the irony with that, randall, if we score a trade deal with china because it becomes too little, too late because china is falling into a slowdown, man the timing couldn't be worse, you know? >> it is tough. this is a tough time for investors. we have to look at the long run about issues with china. so i think that is why the president is where he is on that. neil: understood. randall, good catching up with you. >> great to be with you. neil: we know speaker paul ryan is at the white house with other republican leaders they're trying to get the president to go along with the spending

measure that does kick the can down the road until the first week in february when they have to revisit all of this, including wall funding and the like. they're is they are tell him essentially this is best we can do, sir. signs that the president doesn't like that. conservative members of congress, including mark meadows, on this, if he bend on this, blinks on this, whatever terminology he will lose a lot of support and it will boomerang on him in the 2020 election. you can see the sort of pickle he is in as he meets with the republican leaders. for all we know they could come out to talk to the press. for all we know we could hear from the president. this much we do, the spending measure keeps the government lights on past friday, is not a done deal. it is among factors weighing on stocks rightbu now. more after this. then went beyon. beyond clumsy dials-in's and pins. to one-touch conference calls. beyond traditional tv.

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or sector spyders.com. neil: when you look at numbers they factor out food and energy prices. they don't say that about consume drugs. that is not a good or bad thing. they're expected to rocket right now. lauren simonetti on why. lauren? >> here is inflation for you, neil. new report showing more than two dozen drugmakers planned to raise prescription drug prices next month. that proves that president trump's victory lap over the summer, remember he convinced pfizer and others to roll back their planned increases that was short-lived. novartis will hike prices more than 30 drugs by average 4.7%. bayer to increase prices some 5% on six drugs. mostly their birth control medication. allergan, glaxosmithkline, amgen, astrazeneca, bio again reporting to plan price increases in 2019. that can hit patients who this

year, by the way spent over $360 billion on prescriptions that is a 6% increase over last year. many health care officials will argue that consumers don't feel the increases because of rebates and discounts that are offered but the ceo of eli lilly disagrees. >> drug price inflation reported last year in the u.s., .4%. so we don't have a drug price increase problem to the system. we have a drug price increase problem to the patient. why? because they're paying list prices. >> insurance has consumers paying full price rather than the negotiated price. neil, as you know, this has political ramifications for 2020. it is actually a bipartisan issue but lowering prescription drug prices is what president trump promised us back in 2016. neil: thank you very much, lauren simonetti. just an update right now happening as we speak at the white house. the president is meeting with republican leaders, including

outgoing speakers paul ryan. ned ryan here no relation to the speaker. american majority ceo there. they're there to tell the president look we kind of have a deal to keep the government lights on, past friday, to the first week in february when we will revisit this. we're told that the president is concerned about the deal that does not include funding for the wall. that he might tear that agreement up and go ahead and risk the shutdown. let's take the leap that he ripped it up, we do have a shutdown. then what? >> first of all, there are a lot of people like myself, i've not been shy about this. let's have a shutdown. we all know this is not a full government shutdown. it's a partial shutdown. you send home the non-essential government employees 800,000 are considered non-essential. trump has to draw the line. this is one of the reasons he got elected. he got elected to fix our broken immigration system and one of the things central to that reform was building a southern

wall. i think he has to draw the line. you know what? i will shut down the government, under powers given to me by the immigration nationality act i will shut down the southern border until, you will give me the border wall. we'll get our immigration system fixed. because, neil, implications, first of all our government spending, we discussed this, we're looking trillion dollar annual deficits. in 20 years we'll be 40 trillion in debt f we don't fix the immigration system is, essentially open welfare system, we're going to annihilate our welfare system or all of us are going to end up paying absolutely draconian taxes. neil: i'm wondering, this is just me wondering it, they will dismiss it at will, one thing i thought of with your decision to pull troops out of syria, the president is a big fan of reallocating funds, even though there is question of legality of doing that in this case. take the funds would have been there to support those troops, put them into the wall, what do you think? >> you know, i know there is a

lot of debate back and forth in republican circles. some people are for this. i'm actually for it. we have to are a discussion why we're there in the first place and be there any longer. neil, if you look at department of defense budget, they had 700 billion. if you look in september, they had 100 billion left, they were spending money like crazy. this is one of the things, people, neil to understand. a lot of these departments and agencies, when they're coming towards year-end, they have a lot of money left over, they start spending money like crazy. there is an argument to be made, if you have 100 billion in that budget, a little bit over here, start taking a little bit of that to actually deal with border security and highlighting some of those things, you know what? we'll not waste money on 1000-dollar coffee mugs. we'll put it towards building a southern border wall. neil: do you think the president could claim victory or partial victory on this to say the mexicans gone ahead agreed to house a lot of caravan migrants

to arrived at the border. waiting for their cases to be ajudicated, in mexico not the united states. that is huge victory for the president. why doesn't he take that and run with it? >> it's a victory. it is not a complete victory. we want a little more of a long-term solution. i'm happy mexico is playing ball with us at this time. we're not guaranteed they will continue to play ball. we have to decide what we'll do we're in charge, authority to secure the southern border not rely upon them to be good actors, which they're being in this situation. neil: we'll watch it closely. ned, thank you very, very much ned ryun. we are awaiting the president. he might make some comments to these republican leaders meeting with him at the white house. he might not. they might make some comments after they leave the north portico there, right outside of the white house, few steps away from the door, with the oval office, what we're told, they think they have an agreement what the government is open, for

another six weeks or so then after that, it is anyone's guess what would happen. enter the president of the united states who indicated about that agreement you think you have in hand, i haven't signed off on it. there we be. more after this.

neil: oil prices continuing to tumble. talking about something well into bear market territory, what happens, what does it mean? cheaper gas prices is one thing? this of course buffetts a lot of energy components that dominate the dow and those that dominate the s&p 500 and their taking it on the chin here. but the flip side of that, it does ignite consumer buying activity and eases blow of consumers who otherwise are looking still and i have if i kind of recovery for them. get read from schork report founder and editor, stephen schork. is it overdone? what do you tell them looking at these prices? >> right now what we've been

telling clients overall oil prices are in the extreme danger zone. even at the lowest cost producing margins, anything below $50 is now going to cause heart ache going into not necessarily the first six months of this year, neil. you had oil well over $70 a barrel for most of this summer. you have had a lot of forward production and that has been hedged. oil producers will make $7 a barrel based on their hedges. but we've had a significant run up now, 40% off the highs. i think the highs we saw in september, was all based on hype. it was speculative bubble. we're all talking about the implementation or reinstatement of sanctions on iran but that was six-month-old news. so, we have certainly popped that bubble but now we have overdone it. now the concern, neil, yes, lower oil prices will translate into lower gasoline prices. so people will think that that a

good thing. in certain respects it is. keep in mind commodity prices do not drive economic growth. commodity prices are a function of economic growth. so 40% decline in oil price, 25% decline in industrial metal prices over the last couple months does not bode well when we look at the economy going ahead in 2019. enjoy the low gasoline prices. certainly means that we're looking at economic stagnation going into the new year. neil: if we ever reached a point which the gas prices alone ignite consumer activity and start reversing the trend we see going on now, is there an inflection point? >> well, there is an inflection point on the high side. that is we say we do know that gasoline is no longer perfectly inelastic demand we've always seen. we do have substitutes now in the market. that is an excellent question. i myself in the schork household we have a plug-in hybrid. i fill my suv up once every six

weeks as opposed to 2008 where i was filling it up once every six days. so my demand patterns certainly changed. the market demand patterns certainly change. i don't believe gasoline price, low commodity prices can turn the market around. i think that is putting the cart in front of the horse. we have had this discussion in general going back when the market originally crashed in 2016. everyone thought sub 2-dollar gasoline was great. do we remember what the economy was like in 2015? i really don't want to go back to those days. with oil prices, gasoline prices where they are, aluminum prices are, iron ore prices certainly a bit of a concern going ahead. obviously we had the inversion in certain maturities along the yield curve. we have the ongoing rift between beijing and washington between the trade deficit. excuse me. trade tariffs. neil: right. >> therefore there is a lot of question marks and a lot of

volatility going into this new year. neil: if in doubt, sellout, that is what is going on right now. thank you very much. >> i think so, thank you, my friend. is anyone taking credit for the selloff as much as volatility an runup precipitated on same developments. listen to the treasury secretary talking to stu. >> completely. with the advent of computerized trading which has such a big part of the market now, combined with the volcker rule where you can't have market makers commit capital, you just have much bigger moves in both directions. i think clearly you have a situation here where the market has overreacted to the fed's comments. and you see program trading taking over. neil: all right. made little sense to me. if you think about it, because the same factors were in play when we were running up. you didn't mind them when we were running up. you have a big problem when things are going down. god forbid anyone, anywhere, take responsibility for anything. just doesn't happen.

charlie gasparino, what do you make of that? i thought it was, kind of an interesting excuse but i mean, blame it on volatile, fast, rapid trading all of that. >> he is not totally wrong obviously. swings, because of algorithms they kick in. by the way price discovery right now is so fast because -- neil: right. but factors were there running up. >> everybody used to call each other, go to new york stock exchange get a market-maker by your stock, things happened slower. this is instantaneous. you have instantaneous price discovery not -- neil: not always instantaneous going up. >> freight point. your first guest really good. neil: schork. >> from the oil report. he made a great point i want to hit on a little bit. he talked about how oil prices coming down that is an indicator rather than a stimulus or the economy. an indicator the economy is falling. other thing he said commodity prices aluminum, all other metals coming down, those are,

so that means people are not buying that commodity amid tariffs. think about this those were, those were the metals that the trump administration imposed tariffs on. those prices are coming down. instead of having desired effect you buy more, particularly more domestic, businesses are cutting back and that is what tariffs do. it is disincentive to basically invest and produce because your costs go up. neil: or markets are just feeding that? >> or costs are going up. one of the things, i think the biggest problem with mr. mnuchin's comments he doesn't take responsibility for the fiscal policy errors that is leading to the market volatility. fiscal policy areas are not tax cut, we think it is net-net better, but not deregulation which is great, but tariffs and trade wars freaking out this market. neil: the president hasn't commented on the federal reserve move yesterday. >> right. neil: we might getting today.

we certainly heard from mnuchin today it is an overreaction on part of the markets but what do you expect the president -- >> i don't know. he will probably say something today. it is interesting. you have, markets and economies don't blow up or trade down because of one reason. all these several reasons, one reason obviously i think is the fear of a trade war. another reason is on top of that, when you combined it, a noxious mix, is that the fed feels it has to tighten. it feels it has to tighten on short end and long end. the short end, guess what we need room, the economy is strong, we need room to lower rates if we have recession. neil: when you talk to your buddies about this, what is their reaction to the markets reaction? >> just what i'm telling you right now? in addition to worry about a trade war, the fed feeling it has to tighten both on the short end, raising the fed funds rate, because the economy is strong, we need room for recession to lower them. neil: right. >> on the other side, on the

balance sheet side which controls the 10 and 30, it has to unwind that, to certain extent. it has to basically sell that because the u.s. can't hold that big -- neil: see what saying there. i agree with you. the federal reserve's actions post the melt down, bring us down to zero percent they need more -- even if it is not justified, how many they squeeze in and add on can -- >> it will hurt. neil: they're in a box. >> they're in a box. really what should have happened yellen -- neil: janet yellen. >> janet yellen the predecessor for powell should have been raising rates faster and unwinding the balance sheet. neil: she started 2015. >> something like that. that is when the economy was starting to reach a certain level where you can raise rates and it wouldn't have impacted that much. neil: you say we're back to what is normal range? the normal range would have fed fund 5%. >> we're obviously not going there. listen, the on top of that, this

sounds esoteric, the dollar has to be worth something. we're not on the gold standard anymore. if the fed literally can come in, create dollars there, is no consequence, that means the dollar is not worth anything but the whim of the fed. neil: this is the fed's fault? >> some of it is. neil: all right. >> some of it is policy. neil: not anyone in the white house's fault. >> it was obama's fault to begin with, instead of stimulating -- neil: all i hear everyone in the administration point fingers at anyone but themselves. >> no, it is ridiculous. their biggest fiscal policy mistake they're threatening the world with a trade war. the impact is already being felt because you saw higher aluminum prices. he just said it. on top of that markets are scared. the second biggest policy problem i think the way the tax cut was skewed. way too much to corporations and corporations are the least efficient to creating productivity and jobs because what they do when they get a tax cut, their fiscal responsibility

or fiduciary responsibility is not to the taxpayer and to the employee, it is to shareholders. neil: don't you think, not just forcing an opinion here i think i have fairly good ground here, we don't get anything remotely like consistency from the white house on what's acceptable policy regarding avoiding a government shutdown, on trade? it was going to be about intellectual theft and all that. it veered into other wacky areas. >> weird stuff. neil: on even behavior and response to the federal reserve, even on the wall, or the fence or the whatever. it is all over the map. it is coming back to bite their heinie. >> i think sort of volatility of president trump is now in play in the markets in a major way. when you talk to sophisticated invested and talk to clients, their clients are scared what he might do next. neil: okay. >> really adding an element of fear. now i will get a lot of emails from people. you're just a negative trump per. these are from people that don't

have skin in the game. i'm talking about people with skin in the game. neil: if you own them on the way up, you have to own them on the way down. thank you, charlie, very much. this is not political. i read the numbers. not red or blue. we like to follow the green. the green is confused. the guys who hold the money much more interested in making money than making friend with anyone in the white house or in congress or anyone in the house, right now they're confused. they don't know which end is up and which way the administration will go. if you are going to marry yourself to the markets when they to up, you have to take some responsibility when they going down, they are going down big time. nasdaq is in bear market territory. the dow transportation average is in bear market territory. 2/3 of the stocks that make up the s&p 500 are well into bear market territory. that is the reality. more after this.

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neil: president is meeting with a lot of republican leaders to how to avoid a republican shut down. all democrat leaders apparently democratic party is looking to accommodate all the candidates likely to run, saying the party will hold its first of 12, 12,

presidential primary debates in june. that is just to kick things off. meantime, we've been telling you back and forth about this, pretty inclination to not really focus on the markets on the part of the federal reserve or for that matter, treasury secretary steve mnuchin. gary kaltbaum, someone whose insight and expertise on these things over the many decades i found to be very historically prescient, said the two most important money men in the world jerome powell and mooch mooch saying is the market is wrong. big money knows they are out of step. big money continues to sell. i am personally amazed how strong and persistent the selling is. tells you how much leverage is in the system. don't get me started on the president. the message is inconsistent. have to verify everything that is said. this matters to a fragile market. you can dismiss the markets all you want. they don't telegraph a recession

or at very least an ongoing bull market. what they give you is a snapshot in time you can't ignore the snapshot. you can't ignore it entirely. the markets are combination of money and sent building for a particular out come that might or might not pan out but dismiss them out of hand when many in the administration were joined at hip with the runup when it was going according to their hand it is just inconsistent. anyway as i said the president is meeting with republican leaders to discuss border funding to try to get that together, even though it doesn't look in this latest government extension that it will be. independent women's forum hadley heath manning and "axios" reporter kaitlin owens. let me begin with you first. this notion that the president might dois 80 on this, go back -- do a 180. go back to the funding on the wall or go ahead and shut this government down? are we closer to that right now when we looked like we were

nowhere near that? >> absolutely. this morning things have been completely shaken up. no one knows how this will pan out. it is one of those days you're checking twitter every five seconds to see if someone has some kind of update. we don't know what will happen. president wants to go back, he wants his worder wall funding. some conservatives push for him to see this. they see it as last chance to get border wall funding before nancy pelosi becomes speaker. also the votes are not there to get that kind of bill passed. so we'll see. neil: i guess you're right. hadley, one of the things i was seeing the president could claim some victory here saying he got mexicans to house a lot of migrants whose paperwork is being adjudicated in the united states to see who gets to stay in the united states and who doesn't. that is a huge victory, take with that, run with that. even though he didn't get wall funding right now. he got that.

you could make the argument that is even better. >> one of the basics of negotiation. if you get what you first askinged for you can claim a step in the right direction, you can claim policy success. when it talked about a government shutdown, neil, feel like we're in the movie "groundhog day." are they making it or come up with a spending bill today. a lot of people shrugged this off, our lawmakers yet again putting politics ahead of basic government operations and responsible budgeting? that is unfortunate but just a symptom of the disorder and division in our government. neil: out big of an issue it will be, even if it is settled, kaitlin, in your eyes? what are people telling you it sets the stake for next year? >> i mean look, i think that the other woman that was just speaking i think she has it exactly right. people feel like it is "groundhog day." i don't know how outraged people

get over government shutdowns, this is the final chapter of total republican control of washington. we've seen a lot of dysfunction. we have seen policies like tax cut, come out of that tax reform has been passed. those are achievements republicans can point to. we have seen a lot of dysfunction around government spending every few weeks we wonder if the government will shut down. neil: it is crazy. ladies. both of you, i apologize for the truncated time. we're following developments at the white house with the president meeting with republican leaders. hope to avoid a government shut down and maybe hear comments from the president what the federal reserve did yesterday. no fan of the fed, he hasn't said anything yet. yet. inviting places with people here to help you, not sell you. and savings and checking accounts with

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and, if necessary, help you find the right place for your mom or dad. we all want what's best for our parents, so call today. neil: all right, you know, try not to focus too much on the market, but things change. we had made under poisoning yesterday, so i know what their business journalist and all sorts of networks covered any movement of the doubt. i'm not dismissing 359-point decline. just reminding you a little more than eight minutes ago we were down 460. i try not to overstate that. you will save you step way back from this tremendous numbers not shaping up to be a good month for the market appeared we are looking for losses as bad as you get back to december 1931 when blake urman was just starting out as a reporter.

he joins us now outside the white house with the latest on how oddly enough the man in the building behind it might be contributing to this uncertainty or at least different positions on a shutdown. he cannot get us now. hey, blake or >> boston college in in 1931, neil. sure do they come back to me, boy, go ahead. reporter: we got arrested on the west wing because positron does huddled with republican lawmakers trying to figure out a way forward afterward exact to the president wants to do. as you know last week and last week and said give me $5 billion in border security in the deal that has been struck on capitol hill includes funding for the government through february 8th. no additional funding for the wall. there appears to be some deal in place to get this across the finish line. however now many within the republican party are telling the president they should take a

stand and that he should take a stand on their spirit remember the president had threatened to shut down the government. the big question right now is will he indeed do just that? mark walker, congressman, republican on the hill is saying, for example you just one person pain the president should take a stand right now. >> when it comes to securing the border on behalf of protecting american people, i believe what we have to do is make sure we're going to make a bold statement. republicans have to be smart. we also have an exit plan of what this looks like long-term in nature government employees are taking care of. this is a hill we should be willing to die on. reporter: this is what republicans are hearing right now. some republicans take a stand. this is the moment we want a wall. you want the wall. republicans control washington d.c. for the next handful of days. let's do this now. others up on the hill are saying do not shut down the government. there is some sort of a compromise here for the next

seven weeks. take it and we'll move forward. the president has to give the folks up on the health of direction as to which way is going to go. speaking of the hill, neil, head of the department of homeland security kirstjen nielsen went on the hill and revealed the united states and mexico, the two governments have reached a deal as it relates to asylum seekers. those trying to seek asylum into the united states as the process takes place will now be kept in mexico and there will be a process they are as they awaited mexico and not necessarily in the united states. so that is a win for the president. a win for his administration, but the biggest that very this president could get would be his border wall and additional funding and that is what we wait to see how he wants to move on that possibility. neil: do we know whether these republicans will speak to the press when they leave the white house for any plans to do so?

>> the cameras are out there awaiting. also waiting as to whether or not we will actually hear from the president. normally they kind of surprised us with this sort of thing as to whether or not the cameras will be allowed in. we will see. every indication we have is meeting is still ongoing. just another day over here at the white house where we don't know which direction this is going to move. >> happy never see this administration. zoom in. neil: i hear you. i don't know how they do it. in the meantime come is the shutdown coming in and seems like it would be a stretch because sadly or not we've gotten kind of used to that. let's go to market watchers scott bowers. what's going on here? >> you know, more uncertainty. we get past the fed decision and rhetoric yesterday and now all of a sudden we have more and certainty into the marketplace. much like how the market has

been trading over the last two to four months on risk headline, there's just more headlines. the thing people are doing the market does not like uncertainty. god knows we are full of uncertainty right now. neil: a type of uncertainty, we always recover officials that whatever you want to say about the insurgency of the government shut down, whether it's going to make it two or three rate hikes next year, the underlying earnings environment is still sound and stable. are you of that mindset? >> you know i am. going into the contrary and camp a little bit because you have all these ceos coming out an economist coming out saying and we've got this major slowdown, which we do. but the economic numbers that keep coming out are strong. they're not as robust as they

were three-month, six-month ago, but there is there is such a solid foundation right now economically. we'll see how that translates into the next earnings season, which really begins in about two weeks and we'll see how if some of the slowdown is already encumbered into the numbers supporting, but maybe more importantly whether the ceos think about the rest of 29 team? i've got to be honest, i look at these numbers. they're pretty good. neil: all right, the daily editorial there, i was talking to a number of conservative leaders who were saying they are very concerned the president is losing. they point to more anecdotal evidence that substantive. pulling troops out of serial whether you like that or not is this mixed message for getting on board are well-funded whether you like it or not. even on the shutdown issue, but that the president isn't embracing a lot of a lot of them and they're worried he's going to lose a lot of them.

what do you think? i think that's right. this week more so than any other week of terms presidency has been a warning shot across the bow to the president from his base especially among his most vocal supporters. it is basically a reminder. remember why you're there. this is a guy who was the lack did not to be a politician, not to be absorbed into the slot. you have conservative reporters who are looking what he said to them saying i think you're getting tugged in the wrong direction and you need to remember why you're there. this wall fight is quintessential. it is the prayer -- premier promised the president of the united states made after more say this is his read my lips moment. he committed to this and i can't tell you. i don't think it's possible to count how many chance we heard at rallies for the moment he started running for office all the way through his time in office saying build the wall. it is a loud, resounding declaration of intent analysis

moment together. if he doesn't i think that hunting is really going to get it. neil: you might be right on that. the politics aside though, scott, and wondering given the fall of the market and we've been looking for major averages that are down in the dow and s&p about 14%, 15% from highest to the nasdaq in and out of the territory of his 20% briefly today now just shy of that. bottom line, when you look at this whether the selloff is potentially overdone, whether these markets have become more affordable but you should die, what should you do? >> us take a more macro look at this, longer-term look. everybody likes to look at what is happening today. what is happening this year? we look at the last 10 years, the last 20 years of the smb market, this is not abnormal. what we are experiencing right now. if you break it down into a one month or three months or six months timeframe, yes we have

this volatility. we have the selloff. this is just the market correcting itself for right now. i truly believe this is the place to start picking not some really oversold names. i'm not saying go windfall out right now because in this type of marketplace that the last thing you want to do. these levels here, we are oversold in certain areas but if you have some patient and not just looking at your portfolio day today, i truly believe you, on top. neil: of the president is very much bragged about the market runoff under his watch and kind of pointing fingers at the downdraft sense. how much is this market attached to him for good or bad? >> i think it must be given the market's temperamental. i relied you in the great reporters of the fox business network to tell me how to follow these things. watching the federal reserve announcement this week does leave me puzzled as an economic layman that when you have inflation is low as it is,

unemployment at the levels they are, why were seen in interest rate bump right now just seems like it's working against the interests ultimately a steady american success and why the president of the united states regularly treats to this effect. basically stresses his frustration that would seem to be headed in the right direction and the fed comes along and throws little shade on the party. neil: that's probably an understatement. gentleman, thank you does. in the middle of the lasting market rally in october when we were presumably firing on all cylinders, they see something that this troubles me. a lot of people dismiss them, that is just an uber bear going crazy. peter was right to make note of it because something that has happened has picked that name and is back to tell us all about it. peter eliades coming up.

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neil: all right, anything can happen and it has, but right now we are looking at the worst december since 1931. we are looking at the worst year since the financial crisis. a lot of that picked it did with the federal reserve moved yesterday. more to the point of the rate hike that was good but to rate hike next year that was not expected. edward lorenz has the latest from washington. edward your

>> one day after the rate hike today, federal reserve chairman jerome powell spotted during capitol hill probably with some explaining to do. republican lawmakers concerned about the rate hikes slowing down the economy. the market was looking for a clear message to would have been. i asked the fed chairman directly. listen. >> when you think these data come in next year? we need to keep this gradual and in addition what data are you specifically looking out for you the shows when the federal reserve starts to become the head when in the economy with the rates. >> you know, we have a strong forecaster and early for next year. the forecast involves growth between two and 2.5%. it involves growth that is strong enough level to continue driving unemployment down in inflation or 2%. so that's a pretty positive forecasts. to make further new solid for data that is the path we are on. reporter: powell went on to say

they are looking closer to the neutral rate. if you go by the forecast it looks like i could have been after the two rate hikes mid-to-late next year. the treasury secretary steve mnuchin says the markets overreacted. >> you've got to put this in perspective. we have 5% to 6% interest rate. the fed has said they're close to done, their data dependent. the markets overreact to it. reporter: and you see the market volatility going on around here for the last 24 hours. the fed is trying to do a balance here. they want to raise the interest rates to use that to handle the next recession but not caused an extra session or slowdown. in their own projection the own projection is that it's a next or the gdp is 2.3%. year after that it's going to be 2% growth in some economists say possibly recession by 2020. the administration firmly says that is absolutely not true. neil: thank you very, very much.

people say the market overreacts. they never say that when it's running out. if stocks are racing higher, no one's overreact dean. no one wants to acknowledge a failure. that's what happens. kristina partisnevelos has the latest on rates directly affected by the fed's latest move. kristina appeared >> on acerbic almost because they do move in the same direction but you're not going to expect in the overnight trumps. dirty or six mortgage rate at the moment. you see on your screen right now the benchmark it. but the thirty-year right now well above 5% climb to 4.62%. so we see that a little bit lower according to freddie mac that is eight weeks in a row releasing declines are relatively flat. 4.07% and the five-year went down below 4%. so you've seen those rates. one great if you have a home-equity line of credit, debt

has climbed higher because of the variable rate so that his prime plus 1%. you should be that 6.5%. take that out of the equation come as a mortgage rates just mentioned. buyers are starting to take notice. climbing higher as the rates declined in existing home sales. much of the surprise of many analysts and economists who've actually climbed higher. what else could affect you at the rate hike was signed yesterday by jay powell. let's talk about some savings accounts if you have a high-yield savings account that you should see an average of 2.4% pure but if you have an average savings account, that's not going to change. it'll probably hover on an average of 0.2%. switch to online banks because you can get a higher savings rate. let's take a look at what you see on your screen now. credit card debt. credit cards we know our variable so we should be an increase in one to two billing

cycles. right now the averages 17 points 65% and the average american household, how much are they spending on the credit card? right now there datasets $6929 for the entire year. they're paid over $1000 in interest. they're talking about cars because they're going for it all. we want to make sure everybody knows it's affecting them. five-year carloads via narita or .93% not likely change. last but not least, student loans and student debt would be private lands, not federal lands. private lands to make the acid between savings and federal loans. those are most like to going to climb higher because they are valuable and paid treasury bills. on average, students have about $30,000 worth of u.s. debt when they come out of school. to take away from all this is not everything will change but you're going to start to see movement in the direction of this hike. neil: could string a common thank you very much. kristina partisnevelos.

how closely should we be watching the market if they're overstating, overreact and has treasury mnuchin was telling today. is that to say they don't pay attention to market that all? i wonder about that. most of the important federal reserve decisions have been born if you think about it of actions that were playing out on the markets. we didn't get that first vote until we had a failed vote for a t.a.r.p. during the bush administration when the dow fell about 800-point. quickly congress scrambled to get t.a.r.p. funding go and we followed by the 6000-point after that. my point is markets to matter now for a lot of the administration did they matter more when they go up for eagerly bragged about when they go up. a former dallas fed adviser with us right now. danielle, i know federal reserve officials won't admit this, but maybe now is a former federal reserve official you can say that. before you answer that, i want

to go to paul ryan and kevin mccarthy talking about their meeting with the president. [inaudible conversations] reporter: the major startup right now. we had a long productive meeting with the president of the president informed us he will not sign the bill that came from the senate last evening because of his legitimate concerns for border security. so we are going to go back to the house and work with our members. we want to keep the government open but we also want to see an agreement that protects the border. we have very serious concerns about securing our borders of the president said he will not sign this bill. we are going to go back and work on adding border security today is because we do want to see an agreement. without alternative to leader mccarthy. >> we believe there's still time. we border security.

fundamentally that's what they're asking for. a fundamental job as well for the president. the president said what the senate sent over is just kicking the can down the road. we want to solve this problem. we want to keep the government open and will work to have that done. [inaudible conversations] [inaudible] neil: okay, that went well. speaker paul brian will be heading up republicans although the majority leader in the new congress kevin mccarthy saying they understand the president's frustration that they will not sign a temporary measure to keep the government lights onto the first week of february. we got him from blake burba and that the president was dissatisfied with something that would call for no border funding. and nothing approaching the

$5 billion he wanted to the president and dragon. a government shutdown is potentially on again for friday, but the democrats probably won't budge on this. i rudely interrupted danielle to get her take on this. but the markets obviously accelerated on news of this and he gets back to a question i was about to raise with you. when you are on the fed, did you pay attention to the stock market or was it just noise? >> i think all policymakers whether they admit to it or not absolutely pay attention to the stock market and you've been talking about the records and 1931, the worst december. you been talking about the worst year for the market since the financial crisis. these are very real event that are occurring and i would add there is something else very historic going on here and that is that american network has never been as tight as it is today to the stock market. their stock holdings are worth more than their residential real estate for the first time since 1968 and 1999 the only two other

times. so for all of the encouragement we are hearing coming out of washington d.c. and jay powell himself for that matter, the fact is that stocks continue to go down you can have a self-fulfilling prophecy because you hit american families where it hurts the most because of their acute exposure to stocks today. tree into danielle, ronald reagan famously said stocks go up and stocks go down and nonplussed by even the 87 crash in thing quite rightfully wee and he ended his two terms that talks were a lot higher than they were going in. but he avoided this discussion of the markets for the most part. this president did not. he was married to them. he likes to point out that they were a sign of economic strength and you can have it both ways on a selloff and all of a sudden they're not assigned. so where do you stand on this? >> i think what the president is missing and what so many market participants are missing is you have jerry baker and yesterday speaking about this, and how

addicted markets have become to artificial sources of liquidity. in other words, printing money. it is a game changer and it must be taken into account. we see the european central bank for example at the end of this year will stop growing their balance sheet to another source of liquidity coming out of the system and then you have companies that have started to announce something called debt buybacks. this is the last thing market participants want to hear. they got news to share buybacks and it's become a simple fact of life and we see reflected in market trading that this can become a self fulfilling prophecy if we continue to see this kind of downturn in the market. neil: all right, danielle dimartino booth, a very good read on the markets. a very good legal rate of all things that have to do with things you can and cannot do legally. legally. i don't know where i'm going with that. judge napolitano, princeton grad, the whole nine yards. he is scary smart.

the president is drawing the line. i'm not going to sign this temporary government pending bill because i want to order while funding. i don't know what the middle ground is. legally the president is claiming that he's got other options. we're not sure what other options they would have, but what if he were to borrow from another department or agency, does the obligatory to do that? >> no come he doesn't. only the congress can authorize expenditure of money tree into moving monies from other places. the supreme court has ruled they must spend the congress budget. richard nixon tried that and they unanimously told him he couldn't do it. another is you can't say the justice department will transfer to the department of homeland security. he will be violating the law. this sounds crazy to not spending all that money was budgeted for the justice department in this hypothetical.

so the only way he's going to build this wall is that direct appropriations. i don't think that's in the cards. chad pergram and people on capitol hill would have a better read on not. it is a problem i want to describe this way. the government would not own most of the land in which it wants to build the wall. it has to exercise eminent domain and condemned that land. you are most of the owners conservative republican ranchers in texas. i don't think they have any idea what's in store for them if this process starts, but wouldn't some of them have something clean and welcome it because so many of the illegals were saying. in western new jersey a wall. so far you've said --

neil: if you'll indulge me the president could claim that yuri on the mexican saying that these caravan migrants would be waiting it's doing in mexico. not the united states while they are adjudicated. he could just claim out and run with it. >> i don't want to be discussed in the garden party although i'm going to sound like one. the same judges that have been validated the executive orders i think will invalidate this one. the statute says the law which he has taken on the vote to uphold says knock on the door, make a claim for asylum. you come in. you don't get to go free. the obama administration set you free and half of them didn't come back. they can detain you mature in the united states.

neil: is it written as such, it judged that you do wait in the united states. nothing about waiting in mexico. not a savvy lawyer is going to seize on not insane of decanter anyway. >> i think so. you want me to get a little political. understanding the president's difficult situation he's been pledging for years to secure the border. he also took an oath to uphold the law. he is trying to find a fine line without violating the constitution, without violating the law to secure the border. what are you suggesting me is rational and commonsensical. i do something the courts will let them get away with it. neil: just following how this is progress, the first and the president when he was planning -- running for president as mexico city's not going to pay for it and i will build a wall. we will pay for it but eventually it's going to be on mexico. of course that hasn't

transpired. the next thing is it's going to be a wall now. it might be an elaborate fence and all that it doesn't always have to be a wall everywhere, physical wall. critics of the president say he has evolved on this issue. so for those who say he's inflexible, he has shown some flexibility. i am wondering what the other side does now. >> is by the other side you mean the democrats, i think their polls are telling them to resist and either because their base dislikes them as a person or because they want a more humanitarian approach for lack of a better phrase to the plight of immigrants come in many of whom they see as future members of their own party. i also understand what the house of representatives is trying to do in the next day because soon those republicans will be substantially in the minority and they won't even be negotiating with the president. they'll be replaced at nancy pelosi and steny hoyer. i just don't see those passing

the house. they need 60 votes to pass the senate. i can imagine senator schumer are dearly beloved senator -- senior senator from new york permitting a single democrat to vote for anything with a wall on it. the question is who takes the blame for shutdown? is that the democrats not going along with the wall or the president for not going along with what a majority of congress had embraced as of last night and this morning, which is a continuing resolution to fund the government through february. neil: if we don't budgeted just going to shut down. >> we definitely have a shutdown. the question is who takes the blame. he's the type of person. blame it on me. which is what he said when he had that crazy confrontation with nancy pelosi in the oval office. neil: already, -- >> is that gasparino sending a message? neil: it might be. we did get a statement from the meeting of the republican congressional members saying

before the president trump just met with republican members of the house, surprisingly all feel strongly about border security and the stopping the flow of drugs, human trafficking and terrorism. we protect nations all over the world that they are unwilling to protect our nation. usually funding for border security and that includes the wall. of course sarah sanders, the president's position here. the fog may be a metaphor outside the white house. no one knows how to see through this. you see what i just did there? that's free and basic cable. >> very brilliant. neil: why'd i do the show? chad pergram on capitol hill, the judge kind of laid it out there that obviously a shutdown looks more likely if either side budgets. the president's going to budge on the wall funding issue. democrats think it's in their favor not to budge on their own position. simply the file for me.

what happens friday? >> here's the key. the pressure by the house freedom congress last night telling the president is who do damage. mark meadows said last night to his reelection effort in recriminations would start on saturday morning if he signed this bill into law. in summers back the issue has not changed since they fought over the something earlier this summer. no one quite knows what the route would be right now to keep the government no pain. the obvious route would be to pass a bill with some republicans are not the democrats. if the president is going to sign it, you keep in mind during the very interesting reading about a week and a half ago with the president house minority leader nancy pelosi and senate democratic leader chuck schumer, the president said he would in fact take credit. a lot of republicans on capitol hill said they were worried they would get blamed for a shutdown, but the same token a lot of republicans i spoke with this morning said they campaigned on border security, campaigned on the wall and if there wasn't

something the president was going to do to help them there, he had kind of hung them out to dry and that is why republicans went to the speaker this morning. the speaker got this urgent call about the conference meeting this morning. didn't even's press press conference and they all ran down to the white house. you know, we knew something was in play last night when the house rules committee, they had its meaning but they did not report on google. why is that important? in order to put most bills on the floor you have to get a role that establishes how you pay the game on the floor. they didn't do that is not told us a lot last night. by contrast, keep in mind how easy this was to move through the senate last night that they called us up after several hours of sitting around in approved it by voice vote. there wasn't even a roll call vote. democratic senators in the back of the chamber singing christmas carols. go tell it on the mountain, rudolph the red nose reindeer. with enough mitch mcconnell spiked eggnog. maybe that's the only way out of

it. neil: you will be because you're going to be working. thank you very much. real quick final thoughts. it is going to go on and on. >> to e-mails and reading from chad and former colleagues on capitol hill are saying the president is angry and furious and digging his heels in. heaven help those at whom he points his finger. neil: that could be a very tense kind of white house. in the middle we have this. the factory's famous happened so many times. this to be the third such time, the 10th time more than the last seven years. we could get used to this. the markets are far more concerned about the pace of his recovery and seems to be screaming right now is anyone's

weightiness so far? no. more after this. support the he. [laughter] whoo. [crash] and your cut-rate insurance might not pay for this. so get allstate, you could save money and be better protected from mayhem like me. mayhem is everywhere. so get an allstate agent. are you in good hands?

neil: we are down for 10 points. gerri willis is here with more. >> that's right with the dow down 404 points at 1.7%. the s&p 500 down 36 points. this has been a brutal day down here no matter how you shake it. nasdaq composite down 1.7%. the dow down to levels they haven't seen in bear market territory. a quarter of the dow industrials are a 52 week lows including blue chip stocks at jpmorgan chase, travelers, home depot, keep in mind $46 a barrel bid cap tat down 13% today.

amazon down three. now a santa claus rally here. well, santa has left the building my friends. we are nowhere close to that. that may not be on tap as they get news the philadelphia index manufacturing index became lower than expected. drip, drip of bad news here. the federal reserve, the worst part for traitors down here. back to you. neil: thank you very much coming gerri willis. peter light is a noted market bear and people don't like to hear bears. those are condos luke warm on the market. but they're all free for you. the last time he was with me, it's been a not exactly as he said it would. there are those who risk ignoring things, and that there is one thing peter follows that they're not overdoing remotely. after this.

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neil: alright, still waiting for the santa claus rally. we are running out of time. the five days before the new year. again, time running tight for that. already in route to one of the first to summers for the market since 1931. one of the worst years.

on the phone with us as a guy who's badly spelled all this out last time he was with us and talking about doc market editor and publisher peter eliades. very good have you with us. he joins us on the phone. >> i come in meal, good to be with you on the phone. a rather exciting time. in the market. dreams are really has is one way to describe it. what you saw some time ago is playing out now. what is it exactly? what are you noticing that is playing out now? >> first of all, kudos to you for having someone with a technical back round on giving exposure because there's so few financial stations and say we don't want to do with that stuff. that's got nothing to do with the market. of course it has everything to do with the market. i was with you just over a year ago in november of 2017 telling you about my sign at the dinner, which is a simple pattern that just looks it up enough stocks of the new york stock exchange. there's a certain pattern that

forms an historically going back almost 100 years when the pattern forms and i'm not going to get into the technicals of it because it may be hard for people to understand them and that is simply a turning pattern where a lot of stocks don't go up and a lot don't go down. it's kind of almost a full month in the market and not somehow is a pre-omen of a market that's about to run into trouble. that was in november we spoke in january couple months later about the time. i gave the outside anywhere from a few days to a few months out. we should see a major market top. in january of this year, the composite index which measures all the stocks on the new york exchange made its all-time high. the dow in the s&p went on later on in the year to make higher highs, but the majority of dogs, the new york stock exchange made their highs in january of this

year. decided that they are as far as i'm concerned worked very well again. here is something that happened in the last few days. a couple days ago i got a friend, it did what -- [inaudible] 10 is a good friend and a real good market analyst and he said to me he also specializes in theory. he said to me we've got a prime change signal in the market. usually prime reprint changes don't come until well after you've seen a market top. neil: will stop you there my friend. the dow course is one that at the transportation talks as they start sort of collapsing. but go ahead. >> exactly. the transports in the industrials must confirm each other. so what we got, quickly this is how it takes place in easy to visualize it although the rules get somewhat complicated. you have a high in the markets

and then you have a decline. you have a secondary rise in the market and then on the next decline, the in between decline of the first one, the second her reaction is broken by both the industrials and the transport. that is kind of the simplification of the role of, but the first time that happened in nine years you could argue was friday of last week. so friday of last week we got a primary trend change signal by a dow theory. i know you remember the name richard russell talking about down through for so many years. that's given some great signals in the past. some of them controversial and not so great. the last signal a gave i believe was on november 21st. november 10th actually a 2007. that wasn't a bad signal as you know. neil: they had some fundamental reasons are the stuff that move stuff is not doing as well as maybe were not moving as much

stuff. so now, where do you stand? was that look like with the dow close to 400 points and again we are at levels we haven't seen since i believe october 2017. i'm talking about the dow. what he think now is going to happen? >> there's a strong argument now that confirms my feeling that not only were we going to be in the bear market, but that we are in the bear market. now we are very oversold. very oversold doesn't mean you necessarily have to reach a bottom. my best guess at this point would be somewhere in the next couple days were going to reach a tradable bottom in the market. we are going to see ourselves a decent rally for perhaps a few weeks. you can expect to see perhaps as much as a 50% return between the high that we thought recently and the lows we see whenever they come up the next few days. so you have kind of a fit 8%

retrace men of that decline, then i would be on the lookout again for the possibility of a continuation to the downside. neil: that would still be a bear market. and it's common in the adjustment phase of the market that's what we're going through now you can have a pop in a lot of people get into that. a lot of people have seen this market when it has touched or gotten near these type of levels that it's bounced off for years. you don't see that happening. of course did not have something to this degree for a while in february but this is a little different. what do you think? >> here's the problem for me even the past few days is that there is no capitulation yet. i'm sure you're talking to them every day that they day that say yeah, this has been a little bit more than i expected, but the fundamentals are great so don't worry about it. neil: why is capitulation important to you? people throughout the hand and they do with it. >> because historically that the way is formed.

you can't find, especially after an important decline begin. i don't believe you can find any import market bottom. without capitulation utah to say get me out. i don't care where they are. we don't have that kind here. we are people saying what a great time to buy the dip. here's a great indicator that we point now. it's called the trading index. right now is that 79 deal. what that means is in terms of advancing and declining stocks come a lot more money is going into the advancing stocks on a ratio basis and is going into the declining stocks. and that means there's no capitulation. so based on not, i would have to say that even now, as oversold as we are in primed for a really strong rally, i don't think we're there yet. i think they're still a vulnerability in the market. neil: do you think et cetera sirs follows any of this or were told they don't focus on the

market. there is some secret technicians like you following this inward about this. >> believing they follow the markets but in terms of technicians, no. i don't take anyone have secret little technicians. it's the old rodney dangerfield line, i don't get no respect. it is the way technicians get no respect. i remember when we did our show back in november of last year come if you do about a 15 minute segment after mine that i watched on tape afterward and i'm not going to mention any names. one guy said forget the technicians. you cannot find a major correction in the market without a huge uptick in oil. well, that's complete lrt. there is no example of a major market decline without some fundamental event triggering it. that's just not true, neil. that is why technicians get no respect because we call these things ahead of time. not all of us and not all the time, but we have the ability to call these things ahead of time based on market internals.

and then about six months later, you start to see it at this time, too. people six months from now say no wonder the market came down. look at what is happening with this and that. neil: technical research is something that should be there. so i appreciate your taking the time. you've got respect your coming young man. rodney dangerfield you are not. although it's funny sometimes. have a very good holiday. again, just looking at this, we are not in any one political pocket. those saying you up to trump, stop it. i'm just following the money, folks. it's up to you to decide whether you want to buy a matter so i matter just ignore that. more after this.

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one pill a day, 24 hours, zero heartburn. from capital one.nd i switched to the spark cash card i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet? neil: as of management and budget are preparing to have a agencies prepare for a shutdown. how is this specific on stocks? >> the shutdown is not specifically weighing on stocks. the trade and other things. i don't think the shutdown is big part of what is going on. it contributes to a huge negative environment overall. neil: jack, do you think the fed kind of contributed to this, with the fact that it is stingy with the plant rate hikes? they will sill have in the next

year just one less than we thought? >> i think yesterday's meeting, yesterday's press conference was essentially a line in the sand. that jay powell drew that said look, the federal reserve is no longer here to act as equity investors backstop. we, you know, equity investors are on a champagne, have champagne tastes. unfortunately central banks have a beer budget. they're trying to build up their stockpile to address the next downturn, they will not stand by waiting for to bail out any equity investors. i think that was really a striking in yesterday's news. neil: beer analogy was brilliant i wonder if you're worried going forward or is this overdone? what is yours? >> the horse is out of the barn

door easy to be negative when the market is down a lot. biggest losses in utilities and staples and retail investors fleeing the market. capitulation has happened. we're one of the worst months for years. one. worst quarters for years. neil: not to the level you see in a market downturn, they're capitulating but not enough to peter fierce? >> if you look. neil: jack, first. >> if you look at the difference between the 52 week high and the 52 week low, this is the fastest fastest decline that we've seen since, probably 1929. so no, i think this is a pretty dramatic move to the downside. whether or not someone reading the tea leaves decides that people are throwing in the towel, i will let him figure that out. neil: all right. we shall see.

again, my apologies to jack and patrick for making this so tight here. but we had a lot of breaking news. one of the least of which, plans moving toward a government shut down that we look like we avoided. connell mcshane is here to take you through the next hour the looks we'll not avoid that. connell: after those paul ryan comments looks like we have a mess or messes. i'm connell mcshane filling in for charles payne. we're jam-packed the next hour. we talkstocks falling near session lows. down almost 500 points on the dow seemingly because investors seem to have no idea what to expect next on a number of different fronts. the dow and s&p are currently on track to put up the worst numbers in december since the great depression days, 1931. have we officially said good buy to the santa claus rally? seems that way. shutdown fears, one of the factors investors are worried about to some degree at least. government shutdown to neil's point, appears more