sometimes when it goes down, it is the opportunity. merry christmas. my friend david asman is in for stuart. david: good morning. i'm david asman in for stuart varney. the big story, a shutdown for christmas. the partial government shutdown that kicked in saturday at midnight set to continue at least until thursday. that's when the senate returns to washington, but it could stretch into the new year. the main sticking point of course is border security. president trump demanding 5 billion dollars in border wall funding, but now the white house says it may settle for less. and treasury secretary steve mnuchin held a phone call with ceos from six of the largest u.s. banks yesterday. mr. mnuchin also set to convene a quote plunge protection team, whatever that is. we'll get into that. and president trump announcing sunday that defense secretary jim mattis will be leaving on january 1st. this is weekings s earlier than

planned. president trump saying quote i'm pleased to announce or very talented patrick shanahan will assume the title of acting secretary of defense starting january 1, 2019. patrick has a long list of accomplishments, while serving as deputy and previously boeing. he will be great. to the trade dispute with china, china unveiling adjustments to remove import and export tariffs on a range of goods. of course we are watching your money as well. dow futures right now are down, over 100 points. they were up before. they are on the down side now. we'll see if they can turn around. a big day for politics and your money. that's what we do on varney & company which starts right now. ♪ >> -- yesterday we are at 5 billion a couple of days ago. the counteroffer we gave them

yesterday was between those two numbers. >> 2.3 -- >> we moved off the 5. we hope they move up from their 1.3. david: that was budget director mick mulvaney on fox news sunday discussing border wall noesh -- border wall negotiations. >> let's show you a live picture of capitol hill. we do know this, 800,000 federal employees are affected. 420,000 forced to work without pay. so that's the tsa, the customs and border patrol. 380,000 temporarily furloughed. this is the irs, commerce department, nasa, so 25% of the government is shut down. we're on day three. it was the weekend that we just wrapped up. a lot of people may not have noticed this, but you might notice it if it continues. let me show you what's not affected, flights and trains, business as usual. the post office, the national zoo in washington, and the

smithsonian institute's 19 different viewings. that's what is and what is not affected. this is pretty serious stuff. david: social security checks will still be in the mail. >> and the santa tracker norad is still tracking santa. david: that's good to know, very important in the next 24 hours. let's take a look at futures now. they are down as we told you before. they have recovered. they were down over 200 points. now down about 115. joining us is brian wesbury, chief economist at first trust advisors. good to see you. investors are concerned about growth among other things but the economy is still strong; right? >> it is. david, yes, the economy went 4.2% in the second quarter. 3.4% in the third quarter. looks like about 2% real growth in the fourth quarter. but the full year is still going to be 3%. and these quarterly numbers are

volatile. back in 2015, we went from 2 to 1 to 1/2 percent growth. and that was not a signal of recession. and so i think everybody's overreacting to these slower growth numbers. the jobs market is still very very strong. the housing market is actually starting to pop back up. durable goods orders, the institute for supply management that measures activity in factories and in services, both of those are going to be record highs for 2018. there is no evidence that this is going to fall into a recession. and that's what it would take to make this a real true bear market. right now it's -- david: what then are the markets forecasting because they are a great forecaster. everybody agrees with that. you do as well. last week was an awful week. i mean the nasdaq was down 8.4%. the dow was down almost 7%. i mean, what is it forecasting,

if not economic recession? >> yeah, and david, i'm not -- i won't disagree with you that i agree with you that markets are good forecasters. the question is, do you want to look back over six months, a year, two years, three years? because if you look back over any of those periods, the markets are forecasting great things ahead. it's just recently that the market has turned down. it did this in 2010. it did this in late 2015, early 2016. both of those times, if you would have said the market's forecasting problems with the economy, you would have been wrong. and i think this time you are as well. this is just a correction. and people always look for reasons for the correction, and so there's a lot of them, right, government shutdown, tariffs, the fed, but i think people are overreacting. i call it economic hypochondria that is causing this. everybody thinks 2008 is going

to come back, and i think the biggest mistake people are making is they think that it's all the fed's doing. that's the only reason the market is up. that's the only reason the economy has grown, and now that the fed has started to raise rates, and by the way, they are still really low, and they are still 1.6 trillion in excess reserves in the banking system. by the way, secretary mnuchin calling those banks -- i love that. david: you do? >> yeah, i do, because -- david: a lot of people -- by the way, so the folks know what we're talking about, the secretary of the treasury mnuchin called a bunch of bank ceos assuring them that things are okay, but some people took it as why is he calling them to say there's no fire if there's no fire? a lot of people got panicky as a result of the phone calls but you have the opposite feeling?

>> yeah, i think the conversation went both ways. i think he said from point of view things look okay, but what does it look like from your point of view? and what they all said is we have a lot of liquidity. we have extra capital. we're at record earnings. this is not 2008. if you go back to 06, 07, 08, banks were levered up like crazy. today they're not. they have extra capital. there are 1.6 trillion in excess reserves. to all that quantitative easing, it hasn't been taken away. it's still sitting out there. there's a lot of liquidity in the system. and so for people to expect another 2008, it doesn't make any sense. plus, on top of that, we've changed mark to market accounting, which is what took that -- the problems in our financial system back in 07 and 08 and turned them into an inferno -- that's not going to happen again. david: you don't think that the trade concerns, and particularly what's happening -- not only

with china, but what's happening with europe, after brexit etc. and they are still in the middle of that mess, that's not affecting the u.s.? i can understand that the u.s. economy is strong. we see all the indicators that clearly show it is. but eventually we're not an island. eventually the world closes in on us, no? >> well, it does in a way. remember, japan was the second largest economy in the world in 1989. it collapsed. and yet, the u.s. had -- the 90s were an awesome period for the united states. david: they sure were. >> you know, europe has slowed from 2% growth to 1% growth. but the u.s. has picked up from 2% growth to 3% growth. so you could argue that we're winning. and then just real quick on the tariffs, you know, everywhere i look, mexico has reduced their tariffs, canada has reduced tariffs on dairy. the eu is reducing tariffs on industrial goods and automobiles. china has cut tariffs on 1500

goods, and none of this is reported. david: right. >> so what's happening is that the pressure from president trump is actually resulting in lower tariffs around the world, which is like a tax cut for all consumers. and so i actually look -- look, i don't like tariffs. i don't like trade wars. they scare the heck out of me. however, the pressure that the president is putting on these other countries is working right now. they are reducing tariffs. david: yeah. >> that's going to be good news in the long run. david: by the way, we are going to be reporting on these new developments in china because there are some big changes in their reduction to tariffs and a whole range of goods. we will be talking about that later. meanwhile, you have the price of oil out there. it continues to come down. the national average for regular gasoline is $2.32 a gallon. brian, how much lower do you think it can go? >> well, i think we're about where oil should be priced. it should be somewhere between

55 and 65. that's according to all of our work -- and we go back hundreds of years looking at commodity prices and relationships between them. and so, you know, it would be really nice if they would go lower, but this is about right, today. and, you know, oil is a volatile commodity. it could go lower. it could go a little bit higher, but i would argue that consumers ought to expect 2 to 2.50 dollar gasoline as far as the eye can see. it is fracking that's doing this. david: absolutely. >> this brings up a great point. everybody keeps crediting the fed with all our growth. what about people that are fracking wells, building the cloud, writing apps -- david: americans are responsible for the growth. no institution, no government or semigovernment institution is responsible for the economy growing. it is the americans -- given the freedom, from regulation and tax burdens that are responsible for

this growth. you have so many good stories you should be wearing a santa hat. merry christmas. >> merry christmas. david: brian wesbury. it's been a rough year for the stocks, particularly the past week, a very bad week for the tech stocks, nasdaq down 8.4% last week. hopefully there will be a turn around there. checking futures now, as you can see, the markets are still down. we've got about 19 minutes before the markets open. but they've cut their losses a little bit. it had been down over 230 points on the dow. it's now down about 100 points on the dow. two people arrested, then released in the u.k. after reported drone sightings caused chaos at london's gatwick airport. i want to know, are we prepared for future drones? we will get into that. president trump cancelling his florida vacation because of the government shutdown. he's spending christmas inside

the beltway. what's on his agenda today? we're live from the white house lawn. meanwhile, the president pulling our troops out of syria. fox & friends cohost brian kilmeade says he doesn't like the move. he will make his case, next. packaging for restaurants. and we've grown substantially. so i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. that's right, $36,000. which i used to offer health insurance to my employees. my unlimited 2% cash back is more than just a perk, it's our healthcare. can i say it? what's in your wallet?

david: to the deadly tsunami in indonesia. lauren has the details. >> this is a tough one. just a couple of days before christmas. here's the latest. 373 killed.

1 1,459 injured. homes and businesses damaged. one band was performing and literally swept off the stage. this tsunami unlike the one back in 2004 that was caused by an earthquake, and that one much more severe. 200,000 plus lost their lives in that one. this was caused by an erupting volcano that triggered a landslide. troubling news for those before the holiday. david: the bali tsunami was also during the holidays. >> yes, december 26th. david: okay. let's bring in brian kilmeade, from fox & friends. i want to talk about the shutdown. is it going to last? it looks like mulvaney over the weekend was having some compromising news on whether the president would budge on the 5 billion dollars figure. >> he said to chris wallace. he said we were at 5.

they were at 1.3. let's meet at 2, 2.1. i think we are all about symbolism and not giving anyone a win, which is a joke and insincere. if you are not going to compromise, you stay in your corners. this is an insincere debate because democrats know a barrier works. the president gave by saying i'm going to have slats. i'm going to have fences. that's his give. he went to the border and the more he talked to the exerts they said we don't want a solid wall, we need to have some penetration and visibility. to me that was the give. what i wonder too the conventional thought is january 3rd, pelosi takes power, therefore the 5 billion republican presentation goes by the boards. i think to myself, yeah, technically nancy pelosi has power, but does she want to start in a shutdown? if the president continues to not sign anything, she can't do anything. so i'm wondering if there's something there before january

3rd, and an impetus for pelosi to get this off the board so she can start fresh. david: doesn't want to be seen as being against any kind of border security. when you put the 5 billion in the grand scheme of how much the budget is, schumer was talking about how we don't want to waste money. he just passed an 867 billion dollars farm program that spends billions of dollars on people who have never been near a farm. >> yeah. david: talk about waste of money. >> there's two things. the farm bill passed. i haven't looked at the autopsy of it. let's just say they both agreed on it. then you have the criminal justice reform pass. in a time in which your christmas day table, your thanksgiving table was full of what is it going to take for the country to get along? you get something that we both agree on, that would trickle down. david: let's talk about syria and the pullout. you and i both have serious problems with it. there's a lot of people inside the beltway that were perfectly fine with president obama pulling out of iraq which some people say led to the rise of

isis. they are against this. so much hypocrisy inside the beltway, it is hard to get a clear view of what is right and wrong. >> we pulled out of iraq. there was no ceremony. it was basically good-bye and that's it. general keane told me, with the surge, president bush won the war. with the pullout, president obama lost the peace. we had to shoot our way back in there. and they were on the edge -- isis was on the edge of baghdad. we almost had a terror state in iraq. we had to go flying back in, tons of billions of dollars go in there. what people don't understand is it is not america settling up syria. it is america going after the terrorists that get us here. that hit san bernardino and hit the pulse nightclub. david: it is our reputation as a nation that supporting people who have helped us in battle. the kurds are clearly, the head of turkey erdogan wants to wipe out the kurds. these are the only people in many cases who would fight isis

hand-to-hand combat fight isis alongside our troops and now we're going to give them the bum rush. >> when are we going to get allies again? president trump said the turkish leader wills take care of -- turkish leaders will take care of isis as is the russians. they won't take care of isis. the kurds have to watch their own back. isis right now says this is recreation time for us. david: some people in the cia said turkey was behind funding isis in the beginning a couple of years ago. we don't want them -- >> i would not argue with the cia. david: good to see you, my friend. >> thanks for having me. merry christmas. david: merry christmas. >> tell lisa i said hello. david: you love her. >> she is very nice. david: futures are down over 100 points on the dow. a big weekend, though, at the box-office. four films raking in a total of more than 125 million dollars. who came out on top? do you know, brian? >> i think it was one of the cartoons. david: more varney next. [laughter]

david: stock news, cvs is going to be allowed to continue integration of insurer aetna. a federal judge said he would not halt that process. netflix is going to pass sky in the u.k. subscriber business the end of the year -- subscribers by the end of the year. let's talk movies aquaman? >> 67.4 million dollars for aquaman, for warner brothers. it has grossed almost 500 million worldwide. this is a big winner. mary poppins, this was a disney

flick -- david: i haven't heard a lot of good things about it. >> the reviews were terrible, terrible. i'm still going to see it because you have to. julie andrews gave it a thumbs up. david: she liked it? she was the original mary poppins -- >> yes, she won an oscar for it back in 64. david: and dick van dyke. >> yes, apparently it wasn't made well. other movies, mary poppins 22.2 million. transformers prequel bumblebee 21 million. spider-man, 16.7 million. the top four, 125 million. those are your top four. david: spider-man's a little bittersweet with the death of great stan lee. we want to switch to johnny depp. dropped from pirates of the caribbean franchise. i knew he kind of had some problems, some people said he's off the wagon, i don't know what the problem is. >> brought in 4 1/2 billion

dollars in the past 14 years for disney. johnny depp was captain john sparrow. disney hired the dead pool writers to reboot the franchise. david: i love dead pool. >> they're competing with the likes of aquaman and other movies. all in, shaping up to be a record year for the box-office. david: what do you think about johnny depp? >> he's troubled, you know, but this -- david: great actor. >> i believe that his role as captain john sparrow pirates of the caribbean put him on the map. he did parts and then this made him a big actor. david: yeah, although i remember edward scissor hands. >> that's true. i forgot about that one. david: dow futures down about 134 points. had been down over 200 points earlier. it's improved a little bit. let's hope for a christmas bonus at the end of the day.

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david: we are about 50 seconds away from the opening bell. this is a short trading day. we only continue it till 1:00 p.m. eastern time today. that's for both stocks and bonds. but we were hoping for a good day early on this morning, like around 5:00 or 6:00 a.m. the futures were up. now they are down. the weekly performance last week was just awful, by the way. it was the worst performance for the dow and the nasdaq since 2008. we all know how that turned out. 6.9% off on the dow. the nasdaq was down 8.4% last week. the last we looked, the dow jones industrial was down, the

futures about 115 points. it had been down about 230 points, with some mixed messages from china. [opening bell ringing] david: there is the bell. once again we only have about three and a half hours of trading today. it should be a lively day before christmas. we see a little movement to the down side. pay no attention to that 414. that was from last week. there we go. it is still down, down significantly more than it was right before the bell rang. down about .7%. translates to 193 points now on the dow. looks like some people may be looking to get out before the long holiday. we will see. check the nasdaq, if we can, and the s&p. both of those stocks -- as a matter of fact, as we move over to the s&p and the nasdaq, we see three stocks in the green for the dow. that's coca-cola, mcdonald's, and verizon. it is not all red, but close to it. there we see the nasdaq is actually down about where the

dow is percentage wise. the s&p which is a broader index of 500 different stocks, dow has only about 30 in it. that is doing a little bit better. so the broad stock margin is a little bit better than the dow. joining us are brian wesbury who stayed with us. jack hough is here and lauren simonetti here to start with volatility. stock markets were killed last week. jack, what do you think will happen this week? >> you were calling that down 400 number on the dow, a leftover. i hope it stays a leftover because this looks like a weak start. what i look forward from here, there's only two real things that i'm confident about. one is i think we will get about 5% earnings growth from corporate america next year. we have the estimates. they are coming down a little bit. that looks to be where they settle. i think we will get 2% on our stock dividends next year. if stocks rise in line with earnings, you think maybe we'll get a 7% return.

everything depends on whether stocks become more popular or less popular with investors, whether that price earnings ratio rises or falls from here. david: brian, what do you think about that estimate? >> yeah, well, actually i think profits are going to rise closer to 10% next year. in fact, that's kind of the consensus -- that's the consensus of analysts. it is what happened this past year as well. pretax profits were up about 10%. they've been doing this for years now. and so when i look at this market, you know, everybody expects the economy to slow down next year. it's not going to. the tax cuts themselves are a permanent incentive to more investment in the united states. they are not a one off thing. it's not about putting more money in people's pockets. it is about creating the incentive to invest. we have made the u.s. a much more attractive place to invest. david: lauren, one thing that's been overlooked over the past few weeks of devastation in the markets is the fact that a lot of money managers have taken off

and a lot of the trading that's being done is being done by retail investors like us who have a tendency to react more emotionally than the seasoned managers. maybe that's one reason why markets have been going down so fast. >> the seasonality of all this, absolutely. there's a bunch of reasons why stocks are going down. but often selling begets selling. in an oversold market arguably becomes a more oversold market. i hate the word uncertainty. i hate when any guest uses that word. but i've never seen so much uncertainty in so many different pockets. first we started the year with north korea. now it's china and italy and the u.k. what's going on in washington? abrupt u-turns all the time. investors are saying what do we do? what they are doing is -- david: and particularly, brian, those retail investors, when it's the long-term, the people have been trading for 40 years straight, they have a more seasoned attitude towards these, they can take more risk than the

retailers? >> i totally agree, and when you look back over this last nine or ten years, we have been -- every month almost when you look at your statement, it's worth more. it is worth more. it is worth more. and then when it starts being worth less, people get scared. david: yeah. >> and emotion often rules the market. one thing that we haven't mentioned today, just real quick, and that is tax loss selling. so now the market's down. you can actually take some tax losses, and that's a benefit after the market's up over nine or ten years. david: right. >> so i wouldn't overlook that that's part of what's going on here. david: all right, jack, one thing that's part of what's going on today is what happened over the weekend. the phone call from steve mnuchin to the ceos of the banks. he was doing it to sort of find out whether everything's in order, and he found out that things were in order, that this is not a 2008 situation where banks are overleveraged and it could lead to a collapse. but a lot of people were made nervous by those phone calls;

right? >> i think that he believes he's trying to help. look, mnuchin, i have a hard time with his name, this is like someone shows up on your door christmas morning and they say don't worry, we just swept your front lawn for land fines and there aren't any, you are fine. i wasn't thinking about land mines before. i wasn't thinking about liquidity issues before. i was just thinking about stocks going down, but i'm thinking about it now. david: all right. let's talk about one stock, amazon. word out today that they are going to lease ten more very big cargo jets. this expands their cargo operations. so brian, is this bad news for fedex and ups? >> you know, who knows. global trade, believe it or not, is still rising. it might be rising in a little bit of slower space than it was, but there is room -- slower pace than it was, but there is room. and air cargo has expanded. there's room for a lot more. amazon went to the postal

service a few years ago. fedex and ups have done pretty well. i just look at all of this as a changing of the economy. when i think about this, this entrepreneurship, this new technology we have, this is why profits are growing faster than gdp because productivity really is increasing. forget gdp productivity, when you look at companies, they are figuring out cheaper more productive, more efficient ways to get things done. and so in the business world, productivity is rising 3 to 4 percent. i think this is one of the reasons, that amazon keeps figuring out ways to lower costs. david: okay. everybody stay there for a moment. we want to take a quick check of the big board. the dow is still down significantly, almost 200 points to the negative. nasdaq is not doing quite as bad percentage wise by the way. that's down about 1/2 percentage point. the nasdaq is. but the dow continues to accelerate its losses. again, it is a short trading

day. 1:00 p.m. eastern time. it's now 9:37 eastern time. 1:00 p.m. the trading stops for both stocks and bonds. let's take a look at the big tech names that we check in to every day. we just talked about amazon. can we switch over? there they are. the facebook is actually up. it's had a series of losses. as you know, it's been a terrible year for facebook. this is depressing a lot of people within the company. amazon way below that $1500 mark. remember, it wasn't too long ago it was just tickling $2,000 a share. now, it's way off that mark. it is down about 2 1/4%. apple is down over a percentage point. alphabet, not much down there. tesla is going to pay customers for missed tax credits. brian, this is -- if you miss

those government supported tax credits, i think it amounts to about $7,000 a car. tesla now says -- elon musk now says he will reimburse you what you have lost if those tax credits go away. that's going to really cut into his bottom line; right? >> what bottom line? david: yeah, that's right. >> yeah. i believe that tax credits for solar and wind electric cars are pushing money in a direction that it shouldn't be going in. we're taking money away from profitable ventures. we're taxing individuals who work really hard. and we're subsidizing things, and forget global warming or whatever, this is why we're doing it. but by taking away money from profitable ventures and giving it to unprofitable ones, ones that wouldn't exist without the credits, we actually hurt the economy. i'm surprised that we've grown as much as we have given all of

this movement and the government interference in the economy. david: it shows you the power of the tax cuts and deregulation. >> yeah, exactly. and one real quick thing, i constantly hear pundits talking about ceos saying oh, we expect business to slow down next year or we're uncertain about the tariffs, so when mnuchin calls the banks, it's the same thing. so how come he can't do this, but reporters and i don't mean you, david, but reporters can. it's like somehow it's okay for everybody else to ask business executives what's going on, but it is not okay for the treasury secretary? david: i know you are trying to pick a fight with jack. but tesla, jack, there's another point about tesla which is they have cut their model 3 prices in china, as brian just mentioned, they are still burning cash. >> yeah. david: they're burning more cash as a result of this. >> they made money last quarter, but i think this is becoming one

of these jeff bezos type deals where you panic at the first sign of profits and find something expensive to spend the money on. they have had to adjust prices over there, along with tariffs. there's on going negotiations. they are up. they are down. tesla is trying to respond with prices. it's not all their fault, but there has been some chaos in pricing in china. david: brian, jack, great stuff guys, thank you very much. the dow is down about 164 points right now. it was down a lot more at various points during pretrade and in fact after the ringing of the bell. but again, it's trying to make profits. it's just difficult with the downward movement of the dow after last week's debacle. president trump's move pulling troops out of syria, criticism coming from both the right and the left. was this a good decision? i will ask a retired colonel that question. u.k. prime minister may cutting the vacation time of her cabinet ministers short. they will be back work on

january 2nd. will she get the votes she need for her new exit plan from brexit? we will get into that. the clock is ticking on the 90 day deadline to reach a deal with china. will it happen before higher tariffs kick in? that's next. (toni vo) 'twas the night before christmas, and all thro' the house. not a creature was stirring, but everywhere else... there are chefs, bakers and food order takers. doctors and surgeons and all the life savers. the world is alive as you can see, this time of the year is so much more than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,250 credit on select models now during the season of audi sales event. ♪

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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. david: as i mentioned, the president cutting short actually not even leaving washington for his vacation in florida. he's still inside the beltway with a shutdown. and he just tweeted this out, virtually every democrat we are dealing with today strongly supported a border wall or a fence. it was only when i made it an important part of my campaign, because people on drugs were pouring into our country -- people and drugs were pouring into our country unchecked that they turned against it. desperately needed. now over 200 points down on the

dow. and perhaps even more concerned. they are accelerating on the nasdaq which was hit huge last week. it was down 8.4% last week. now it is down almost a full percentage point on the nasdaq. remember all the backlash after the amazon deal in new york. now new york lawmakers want to tweak the deal to calm voter outrage. details from lauren simonetti. >> amazon promised one thing, and that's what everybody, cities across the nation competed for, but they got only half of that. so the new york times is reporting that on thursday, a councilman from brooklyn is going to introduce legislation to ban new york city from entering into nda's, negotiations for public projects. he's not the only one. a senator in queens is expected to do something similar. because 3 billion plus dollars in incentives is what what's dangled before amazon to come here to new york, to long island city, and they only got half of

the promise. so you can't say to these cities and states sign this nondisclosure agreement, when you're not giving them what you promised them. a lot of backlash about this. david: a lot of backlash. we just put up on the screen. look at that. almost 3 1/2 percentage points down $45. it is down to 13.31. again, just to remind you, it wasn't long ago when the stock was just about at the 2,000 per share mark. it has had quite a fall. switching gears to china trade, joining us is economist peter morici. we have a 90 day deadline. will we have a deal before the higher tariffs kick in >> there is a lot of pressure to have some kind of deal. president xi has political pressure domestically because of events that will take place spring this year. and this growing discontent with him for basically affairs with

the united states. at the same time, it is not justified that the market reads these tariffs as a terribly draconian event, but the new york times -- excuse me, the "wall street journal" and bloomberg which after all is owned by somebody who wants to be president, are painting it as basically the president setting fire to the capital the way rome was torched. they may not be fair, but investors are perceiving it as such because of that coverage. the president is going to be under a lot of pressure if this market continues to make some kind of deal. there will be a deal, but whether it has real substance is something else. i think that's why mnuchin is involved. david: peter, we have seen some what i would consider to be real progress from china giving in on various tariffs on a whole lot of different things. some people argue well they are tweaking the little things, they are moving the little things, not moving the big things, what do you say? >> i think that's absolutely correct. there's no real fundamental change in their technology policy.

they could eliminate their tariffs tomorrow and our exports wouldn't go up because they have so many ways of discriminating against them. my feeling is that the change that's required in china is so comprehensive and systemic that it is virtually impossible to come up with a deal because completely contrary to the culture of the communist party which controls, you know, its major competitors like huawei. my feeling is we need a very different approach to china that secretary mnuchin is advocating and basically persuaded the president to pursue. david: right. >> i don't think we're going to get a very good deal. david: talk about the big things. the fbi is now saying the chinese espionage -- and you mentioned huawei in the middle of this poses the most severe threat to american security of any other country in the world. have we awoken to this threat in time? is there time to change it? will they move on this issue? >> oh, i think we can move on china, and we will move. i think it will take a different president to bring about the policies that we need. my feeling is that president xi and the communist party are

misreading america. they think that trump is the problem, and by slow walking trump and certainly secretary mnuchin is enabling the chinese strategy. by doing that, they will somehow or other escape the wrath of the americans. they really underestimate us, much of the way the germans did in the 30s. my feeling is the next democratic president is going to make these guys wish they had trump back to deal with. david: peter, you are terrific. thanks very much. have a wonderful holiday. >> merry christmas everyone at fox and everybody viewing. david: thank you very much and to you and your family. checking the markets now, the dow and the nasdaq are down significantly. look at the dow. it's down almost 300 points now. it had been recovering a little bit, but there are nerves out there in wall street. and every single market stock -- or dow jones stock of the dow jones 30 is down. we had seen some up movement at mcdonald's, johnson & johnson and pfizer, but now they are all negative.

down over 300 points and nasdaq is following. more on the markets coming up. meanwhile, gas prices dropping for a 75th straight day. how low will we go before we hit the bottom? we've got a gas guy on the show today. i will get into that with him right after this. hi.i just wanted to tell you that chevy won a j.d.power dependability award for its midsize car-the chevy malibu. i forgot. chevy also won a j.d. power dependability award for its light-duty truck the chevy silverado. oh, and since the chevy equinox and traverse also won chevy is the only brand to earn the j.d. power dependability award across cars, trucks and suvs-three years in a row. phew. third time's the charm... ♪ ♪ ♪

♪ ♪ ♪ this holiday season, families near you need your help. visit redcross.org now to donate.

david: i'm afraid we don't have any santa claus rally today. check the big board. the dow is down 271 points right now. it had been down over 300. it hit that mark just moments ago. it's recovered a little bit, but nasdaq is actually which had been doing a little better than the dow is now doing worse than the dow percentage wise. so those tech stocks continue to get smashed. here is big tech for the -- it's been a rough year for the big tech. facebook in particular, today actually facebook is in the

green, but this is the first down year that they have ever had since becoming a publicly traded company. that's really weighing a lot of the employees in facebook that rely on the stock because that's one of the bonuses they get. amazon talk about getting kicked around. it is now trading at 1321. that's a 4% drop on the day, just so far. again, it is a short trading day, but it is really bad, and you see all the other stocks there. but none getting hit harder than amazon. let's check the price of oil now. oil has been going down, down, down. there doesn't seem to be anything that saudi arabians or the rest of opec can do to keep that price from dropping. they have cut production, not helping. it seems to be either concerns about worldwide growth that are stunting the growth and the price of oil or perhaps it's the u.s. production of oil and gas that is causing oil prices to come down, but today's no exception. down over 2%. the national average by the way for regular gasoline at the

pump, it is now $2.32. this is the average. this is not the lowest. this is the average, 2.32 a gallon. joining us now is doug with gas buddy. doug, 75 days strait of lower or -- 75 days straight of lower or stagnant gas prices. how much lower can it go? >> it can go a lot lower because we're looking at pries that still reflect -- we are looking at prices that still reflect oil prices of a week or two ago. it takes a bit of time for oil prices to impact pumps. the past 75 days, for all of us year, we're saving 226 million dollars a day just in these savings. you go back 75 days ago, average prices here across the country, 2.80 plus a gallon. now down testing below or at 2.32 a gallon. likely to drop another 5 or 6, maybe even 7 cents a gallon between now and the end of the year. there's more good news. i know it is all bad news on the market front, but for consumers the boon is certainly there. david: the market is now down about 374 points as we speak.

very good news on retail sector. apparently it is a good christmas. people are going out shopping and i'm sure gas prices have a lot to do with that; right? >> well, more money in your jeans which means you have opportunities to do what you couldn't do say six months ago or three months ago. last time we had the discussion on this around memorial day, average prices across the country were almost $3 a gallon. we're down since then. it has an impact really right across the economic spectrum. consumers are certainly a little bit better off than they were just, you know, a few months back, and i think that's very optimistic news certainly from a consumer point of view. but if you look at gas prices across the country, we now have well over a quarter of the states under $2 a gallon. we have situation where over 60% of us are looking at gas prices that are under 2.25 a gallon. i think that's where we're heading. early christmas gift. david: very quickly, we have about 15 seconds.

is oil down significantly because of oversupply, or is it because of worldwide demand dropping? >> i think it's perception of both, demand dropping, of course supply, everyone knows how to do it. we got the shock of russia. here in the united states and of course saudi arabia overproducing in november. i think things will start to straighten out but not until the second quarter of 2019. david: not going to bring oil above $50 any time soon? >> not likely. we will see opec and of course canada is cutting back on its production. david: thank you very much. have a merry christmas. president trump cancelling his holiday vacation in florida. he is staying at the white house to deal with the government shutdown. what's on his agenda today? detail next. the markets at session lows. we are on it all, when the second hour of varney & company continues. 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?

david: it is 10:00 on the east coast, 7:00 a.m. on the west

coast. merry christmas eve. david asman in for stuart varney. markets close early today, but it is not a good day. we weren't sure at first, the futures looked positive, then they came down, then they came up, and now they're down to 331. it's not session lows, but it's close to it. nasdaq actually had been doing better than the dow, now it's doing a little worse percentage-wise. we'll keep a close eye on what's happening with your money and stocks. meanwhile, wrapping up this holiday shopping season, retail sales rose more than 5% from last year, both online and in store. the big number for you, $110 billion, that's what was spent online. meanwhile, inside the beltway, the shutdown continues. president trump spending christmas at the white house instead of mar-a-lago. as a result, we're on all the developments. you're watching the second hour of "varney & company."

david: again, merry christmas to you all. this month on track to be the worst december for the dow and s&p since the great depression. come in, keith fitzgerald. great to see you. how concerned are you about the market? >> well, you know, i'm actually pretty darned concerned at this point. people are not calling it what it is and that's a bad sign when you have to use a euphemism to describe a bad market. this is very concerning. the fed is uniquely culpable at this particular point in time. david: wow. you put the onus on the fed, not on trade policies or any of that? >> well, those are mostly political machinations. they are already preparing for that kind of stuff. what you have now is a fed that has created uncertainty, and uncertainty has in fact bred what we're seeing now. this selloff, traders trying to

get ahead, panic creeping in around the edges. now, the good side to all of that is you've got some great buying opportunities but it's going to take nerves of steel. david: do you have those nerves? are you weighing in? >> yes, i have some of those nerves. i'm wading into some big tech selectively but these are stocks i'm looking at holding for a long period of time. david: why? like? >> like amazon, for example. it's amazon versus everybody else. i'm also keenly interested in boeing and raytheon because as key defense contractors, they have lots of backlog and solid revenues and last time i checked, whether slow-growing or not, the world needs what they make. david: if you're looking at amazon, it's down about 3.5% right now, down to $1331. you mentioned the word panic. it's an overused word in most business programs. but one thing that may have been leading some panic-prone people to panic was what happened over

the weekend with steve mnuchin, treasury secretary, calling the ceos of the six largest u.s. banks to try to calm their nerves. dumb people, it made panicky. how did it make you feel? >> on one hand, i have been in this business a long time. i could argue that's a prudent move and he needs to be doing that. but what he really ought to be doing is having a behind the woodshed meeting with team powell because they're the ones that are out of control as far as i'm concerned. i think the president is right to be angry. i'm not sophisticated enough to say that's right for the government, but again, the fed has lurched from one crisis to the next and that's the dangerous point, because traders are always forward-looking. they can't make a decision if they don't know what to decide next. david: great stuff. thank you very much. happy holidays to you. merry christmas. >> merry christmas. david: after the fed raising interest rates a quarter point, let's look ahead to how rates could change next year. come in, brian domitrovic,

senior fellow at the center for supply side economics. what a great center. good to see you. talk about the fed first of all. i don't know if you heard keith but of course, they have been getting a lot of grief from a lot of sides, including the president of the united states. what do you think of the job they're doing? >> i think the fed is really living in yesterday's world. i think they're trying to correct their mistakes from 2001-2002. the fed used to have this narrative that because it waited so long to raise rates after the 2001 recession, we got the housing bubble. i think they're kind of living in the past. we will have this stepped-up rate increase for the next two years because we did something wrong 15 years ago. it's really not applicable. david: they do seem stuck on this notion which i thought had long since been wiped out by reality, that there's something wrong with a strong economy. they call it an overheated economy. oh, panic, panic, it's overheating, got to raise rates in order to slow it down a little bit. what's wrong with a strong economic growth? >> zero. it used to be called what economists said was the phillips

curve, a tradeoff between inflation and unemployment. if unemployment is below 4% we really have to tighten money. david: where's the inflation? >> it doesn't exist. that's an idea that's been completely banished by reality. robert lucas won the nobel prize in the 1990s for saying know why this disproves the phillips curve? i looked at the relationship between unemployment and inflation, it doesn't exist. thanks for the million bucks. david: speaking of myths, there's one myth that tax cuts which celebrated their one-year anniversary last weekend, are somehow fueling the deficit, even though they have led to strong growth, incredible jobs number which is bigger than it's ever been in my lifetime, the creation of new jobs, and the fact that revenues coming into the treasury are actually at an all-time high. how are the tax cuts fueling the deficit? >> here's what arthur laffer always said from the get-go about his famous curve. if you cut tax rates it can increase total tax revenues. he said when one authority like

the federal government cuts tax rates, all tax revenues will increase. you have to look at what's happening at the state, at the local level, even foreign tax receipts are increasing because there was a tax rate cut by the federal government of the united states. if you think there's a capital shortage because of that tax rate cut, look at what's happening in the receipts picture across all taxing authorities. david: you know the administration, the people behind the administration, larry kudlow and others inside the administration, they differ on a number of things, on trade, et cetera, but on the issue of tax cuts, there seems to me to be a unified vision that tax cuts are good, tax cuts don't lead to an increasing deficit. am i right on that? am i being pollyannish? i would like to think they are of one mind on this issue. >> i know donald trump has cuddled closely with larry and my book on the reagan revolution. every time there has been a

significant tax rate, ronald reagan in the 1980s, now donald trump, there has been a tremendous boom. trump knows that. we owe our economic growth in the 20th century and now in the 21st century to the era of major tax rate cuts. you don't have a tax rate cut you aren't going to have big growth. david: on the other hand, we have had these stock market swoons over the past couple weeks. right now the market is down almost 450 points. i think a lot of that has to do with what's happening in the world economy. that is, the united states cannot ignore the slowdown that's happening in europe and of course, in china. some of it because of trade but some of it just because of bad policies, particularly in europe. are you concerned that the problems overseas could affect the strong growth in the united states? >> i am totally clear that the united states leads the global economy, that if the united states doesn't have a great economy, no one else is going to pick it up. that's one of the reasons we have to be even more vigilant about free market reforms. we might have to think about a

further tax cut, especially if we are going to have tariffs. tariffs are a tax. we can't simply net zero out last year's tax cut by balancing them with tariffs. if we are going to have to have tariffs, we will have to have a further round of tax rate cuts to lead the global boom -- david: i know politics isn't among your pay grade, what you get paid for, but on the other hand, just any kind of deal seems impossible given the configuration of the house of representatives right now, when the democrats take over. you can't make a lousy deal on $5 billion for a wall, let alone a big tax cut. i think it's going -- if there's any change in the cost of doing business in america, it can only be done in the deregulation front because for that, the president doesn't necessarily need congress. >> that's great. great job at deregulation but just imagine if there were a deal in this environment on tax rate cuts, the market would be so surprised, the economy and stocks really would boom like it's the 1980s.

david: i don't think the democrats want to give that victory to the president. that's why they'll stop for any kind of extra tax cuts, though i think it's time for one. brian, great to see you, my friend. thank you very much. keep up the good work. >> thanks, david. david: check the big board. big tech names, we check every day. microsoft, one of the biggest drags on the dow right now. the dow, by the way, down over 4 4 400 points. facebook is actually trading up 1.25% today but look at amazon, down $1331. it was down even further before. but that dow is really dragging negative. now the dow is exceeding the nasdaq in losses. looks like people do not want to hold stocks going into the holidays. apple shares hit near one and a half year low. check tesla, cutting model 3 prices in china. it's all about tariffs. now netflix is going to surpass sky in uk subscribers by the end of the year, according to the

"guardian" newspaper. netflix down about 1.33%. again, doing a little better than the overall market. check this out. one bar in d.c. celebrating the government shutdown by offering $5 shutdown cocktails. each weekday, the lights are off, drinks like nothing really mattis, order wall banger and mexico will pay for this. this is the shutdown. would president trump's base be happy if he settled for anything less? we're on it. and the markets seeing red on christmas eve. the dow and s&p on pace for the worst december since 1931. i want to know, are we close to a market bottom here? and what can turn it around? we're on it.

david: let's check the big board. it's been worse, believe it or not, today. it was down about 450 points just about five minutes ago. it's improved, it's come off of that low, but it's still down 1.5%. the nasdaq is down about the same percentage-wise. you know, we always look at gold. we like to see gold as an indicator of many things, including, of course, the value

of the dollar. when gold is up, the dollar's usually down, and in this market, sometimes that's good for the market. not today. but again, gold near a high of the year, up $1270 for an ounce of gold, so all the gold bugs out there are happy. check the price of bitcoin. it's up over $4,000 again. almost $4,200 right now. the chinese finance ministry says china will remove some import and export tariffs on january 1st. this coming as trade tensions remain high between the u.s. and china. what's the latest? lauren: they are calling it a tariff adjustment. reuters news reporting a slow opening up, if you will, a drip by drip opening up of their economy, that they will remove some import and export tariffs at the start of the new year. import tariffs on items like cotton meal and sunflower meal, these are used -- china has the most -- david: they sound like little things but they are used a lot.

may not be that little. lauren: there you go. yes, look, i don't think wall street is convinced, it's a down market but the trade sensitive stocks are all significantly lower today. david: indeed, as is the overall market. thank you. president trump tweeting this morning about the shutdown. here's his tweet. quote, virtually every democrat we are dealing with today strongly supported a border wall or fence. it was only when i made it an important part of my campaign because people and drugs were pouring into our country unchecked, that they turned against it. desperately needed. come in, jeff bollabond, adviser to president trump's re-election campaign. we mentioned the democrats who once were in favor of the wall, that includes mr. schumer, who now calls the wall quote, wasteful government spending is how he referred to it. we just passed an agriculture, i talked to brian kilmeade about this, we just passed an ag bill that cost about $800 billion, billions going to people who

have never been anywhere near a farm. this is corporate welfare. and he's talking about wasteful government spending. it's a mere $5 billion for the wall. >> if chuck schumer actually believed this is wasteful government spending, he would be all for it. that's all he does is wasteful government spending. what he knows is this is a signature issue for the president, it's an important issue for america, and he's just playing politics with it. he doesn't give a darn about the money. you know that. david: how long is this going to go on, this impasse? >> i don't know. i think each side has really dug in. i think that the longer it goes on, you know, under obama when they had a shutdown, the administration did everything it could to make americans feel pain, right? i think under this president they will do everything they can to make americans not feel the pain and the truth is most of us will not even notice it for quite awhile if this extends a little bit which might lead to us understanding maybe we don't need such a big bloated government. there might be nice fallout from this. david: it's clearly not a problem with his base. his base was worried last week when early in the week it appeared he would make some kind

of compromise with the democrats, give up his position on the wall. that was a concern to the base. but his sticking to this even at the risk of a shutdown, which happened, is what a lot of his base wanted, if not all of it. >> that's right. 100%. the base absolutely wants this. he was brought to the presidency largely on the basis of securing the border. it was sort of overblown and people said he just wanted the wall but he's been clear he wants a wall with a big beautiful door. he wants america's security. what this president understands is america is very generous. we will happily have legal immigration but we have to cut out this nonsense. david: border security is not wasteful government spending as mr. schumer says. >> no. it's the core of what our president is supposed to be doing. our government is supposed to protect us from this. david: in fairness, schumer said that about the wall, that the wall is something he's supported in the past. general mattis essentially getting fired. he announced he was going to leave but they pushed the date up because he disagreed strongly with the president's decision on pulling out of syria.

is this going to affect the base at all? the president did, during the campaign, mention that we were overextended overseas, we should pull troops back, but other people are saying look, as a result of pulling out of syria, we are going to be letting down a lot of people that fought hard for us, particularly the kurds. >> this is a tough one. this is one where the base is divided over this. the populist base that doesn't want us anywhere besides america. there's a conservative base that thinks we should be more muscular in helping some of our allies. david: what do you think? >> i think some people raised the israel issue, will it be bad for israel. i think israel will be fine. i really believe that. i think israel needs to know it needs to confront what's happening on its northern border with america backing it up. david: isn't the danger of this move that it will support the iranian position in syria and lebanon and that's a danger to israel? >> my concern is more for what it means to christians and yazidis and kurds in the region. here's the thing about this president. i believe he deserves 100 benefits of the doubt especially

in this region. we have -- americans have a long history, unfortunately, of engaging but only sort of and then pulling out. if that's what he's doing i'm a little concerned but i don't believe that's the case. i believe he will have a strategy that will roll out over time which will actually put us on better footing. as i say, i really believe he deserves the benefit of the doubt on foreign policy but nowhere more than the middle east. david: the united states is gaining a reputation, a very undesired one, of letting down people who have supported it, who have fought for it, who have died for a position like the kurds. this kind of continues with that conception of what the u.s. foreign policy does. >> i think if it's left here, i can't help but agree that this is not great for the kurds and not great for our reputation. but i believe that again, i think the president has a very clear sense of what's going on in the middle east. he's been better in the middle east than any president i can remember. for decades and decades. i believe he will ultimately come to the right conclusion here as well. i believe again he deserves the benefit of the doubt on what's happening. don't judge this by the first

day or week or by a tweet or by general mattis, either. i think we have to wait and see where the president is going with this. david: good idea. thank you very much. appreciate it. meanwhile, the biggest criticism of president trump's proposed border wall is that migrants will just build tunnels underneath it. later this hour, we will talk to the ceo of a company whose technology is meant to detect those tunnels. and president trump canceling his christmas trip to mar-a-lago. the senate coming back on thursday. how soon could this shutdown end? we will head to the white house for the latest, coming up. ♪

david: get this. president trump is not going to be spending the holiday in florida, where he had planned. he's going to remain in d.c. as the government enters its third day of a partial shutdown. blake burman joining us now. blake, what is the president doing today? reporter: we do have some sun here in washington, d.c., david, but this is not necessarily mar-a-lago, the president had to cancel his christmas visit. he's here at the white house because of this government shutdown, though the president will be here at least for the next few days, we believe, because the next time there's going to be any sort of at least potential, and i stress potential, legislative movement on this, will be thursday, the 27th, because that's when congress or at least a faction of it in some form, some way, will convene. the big question is what, if anything, can be done between now and thursday, and if nothing is the answer, what would happen after thursday because over the weekend the incoming white house chief of staff mick mulvaney

said it is very possible this government shutdown will go into the new year, and to the next congress. so for now, president trump here at the white house and as we have seen over the last hour or so, sending out tweets. twitter, one way to communicate, of course. another way is phone calls. we got some pretty big news over the weekend from the treasury secretary steve mnuchin in which the treasury department yesterday said that the treasury secretary made calls to ceos of the six largest banks to talk about what happened in the markets last week, which the treasury department said those six ceos assured the treasury secretary that they had enough ample liquidity available. here's what i can tell you, speaking to a senior treasury official just a little while ago. that senior official telling me the phone call was a quote, p proementive step, that the secretary thought it was prudent to do after last week's volatility. as this one senior treasury official told me, they thought it was viewed as reaffirming good news. of course, the market today has

taken a different route. david: only 30 seconds but i have to ask, what about the consensus that the president and -- in the administration, that the president was not going to fire jerome powell, head of the federal reserve? reporter: we know that the president is very frustrated with powell. we know that members of the white house have been -- have had that frustration voiced or at least some of the president's allies but also, over the weekend, administration officials saying that it's been made clear and the president realizes this now, that he cannot pretty much fire jay powell unless there was cause and for now, it doesn't appear there is cause. david: happy holidays, my friend. great to see you. thank you very much. market's down 320 points on the dow. we'll be right back.

david: i have not heard that. varney's not here, of course. i'm david asman filling in. he loves to have those beatles songs and this is one -- i never heard this. have you heard that before? >> no. i actually really like all the songs today. david: tell us what it is or we'll move on. christmas everywhere. let's look at the big board which is not doing well. this is surprising on christmas eve, shortened day of trading. we end the trading day at 1:00 p.m. eastern time. lot of people thought it would be a sleepy day. not so. volume is actually slightly above average, so the bears are running on wall street today. the market was down over 450 points at one point. it's now recovered a little bit but it's still looking sickly at 280 points. let's take a look at the -- there they are, big tech names.

alphabet has turned around. that was trading lower earlier today. it is now up about a little over half a percentage point. facebook has been up all day, bucking the trend. but amazon, still way down. it was down over 4% so even that has improved. who knows, there is still time to turn this market around, get a little santa claus rally. the uae announcing opec will be holding a meeting if output cuts are not, quote, enough. this coming as oil hits a 17-month low of $46 a barrel. come in, scott shellady, manager of tjm in europe, close to all that brexit stuff going o great to see you. merry christmas to you. production cuts are not enough for opec. they're not working anymore. >> neither are calls to the major banks in the u.s. that doesn't work anymore, either. at the end of the day, the market's not trading on that

news. we were rallying hope for the last two or three years. now we have decent things in the news but are looking for the one bad piece of sentiment. that's what's happening. there's no new surprises. we don't have a black swan. we're just all borrowing nervous energy from what we might think might happen in the future and that's what you get when this is kind of happening and at the same time, the algos, all kind of piling on and we are starting to look for technical numbers but not really looking for fundamental news. david: one of the polka dot swans, some people like to say they are polka dot swans, not black swans anymore because there's so many mixed messages, is what's happening with brexit. theresa may calling back some of her cabinet to come back on january 2nd. that, by the way, most americans do go back to work on january 2nd. that's cutting a vacation short in great britain. what do you make of this? what's going to happen with the

new brexit deal? >> i was at a dinner party in london last week. slowly but surely, she's gaining respect. i'm not going to say everybody likes her but she's gaining a lot of respect because she's doing a bad job at the -- she's doing a job nobody wants, sorry, at the worst job when nobody would want to do it and she's hanging in there. slowly but surely, the electorate is starting to think hey, these mps better pass her deal or we want a hard brexit. we're not afraid of that. so that's something -- mps have to keep it in mind because they will take power away from them if they don't have something of their own. she's slowly but surely garnering support, not as much like but they are honoring her a little here with saying look, your plan, we either pass it or we go right to hard brexit, no fooling around. i think the general electorate feels that way. david: she's got nothing to lose. she's got a year, she will be there for a year. nobody wants the job. maybe jeremy corbyn but he doesn't have the pull to get it, right? >> no, he doesn't, and he's a

communist. i voted for her. i happen to really like her. in order to get things passed she wanted recently, she told her little group that hey, i won't run again, right, i will just do this job at its hardest moment and once we get everything done and it's easy again, i will pass the patton to somebody else. how magnanimous can you be. she is getting support, the mps have to rally around her or they will lose their power. david: you said you voted for her? >> i voted for her. i'm a british citizen. i can vote. david: i did not know that. you don't look, you don't sound like a british citizen. forgive me. >> tell you what, when i say i'm a british citizen in london, they cower and get sick to their stomach. david: i love that. great stuff. have a very merry christmas. great to see you. back to the markets. dow and s&p hitting their lowest december in 87 years. where do we go from here? come in, david dietz from

pointview wealth management. what do you think? >> what are you going to do as an investor, really? historically, you buy low, sell high, as warren buffett says when others are panicking, you should get greedy. this is a time when a lot of people are panicking, retail investors are throwing it all out in the bath water. david: let's talk about that. earlier i mentioned a lot of money managers are on vacation. they made so much money the previous year and a half that they decided to go to vacation early, so that does leave a lot of retail investors like me and the average joe on the street making bad deals because we panic more easily. >> i think that's exacerbating the situation. for example, just last week we saw the close in denmark almost melt down. that's the playground of the retail investor because market caps are so thin. they are taxable investors so they are looking to lock in losses to put in a silver lining before the end of the year. we were looking at statistics from etfs and mutual funds, we are seeing record liquidations.

that's not coming from professional investors, but from retail investors. david: you have always been a contrarian on ge, at least in the past couple years since it's been going down. are you still in favor of ge? do you think it will turn around? >> we are actually doubling down on it and here's why. larry culp is my man here. for so many years, we had all talk and no action. they talked about in three years from now we will make umpteen dollars per share. here, mr. culp is not talking a lot but is taking great action. let me give you an example. for example, he just sold part of the cloud business to one of the saviest tech investors in the world. they are willing to invest in that. they have filed for an ipo of a portion of their health care business. they are poised to go. on top of that, of course, they dropped down a lot of their digital business into a unit, they will still be owned by ge but that gives more flexibility to be able to spin that off. from every metric i'm looking at, i like ge. david: it's a tough sell but you

are a great salesman. david, great stuff. thank you very much. christmas tree sales are up this year, thanks to millenials, of all people. lauren: we don't have official numbers but they are said to be up about 10%. millenials like things that are real, in general. they like experiences. you go out, look at that man, find your tree, bring it home and they are into farms and they support farms that plant christmas trees sustainably. david: sounds like a contradiction because it used to be people went to fake trees because they wanted to save the trees. in fact, for every tree they cut down they usually plant two so you could actually help the trees if you buy a real christmas tree. lauren: the artificial christmas trees use a lot of petroleum-based products and have plastic and they are not environmentally friendly even though you keep them for multiple years. that's the argument millenials are making. i do have a question. if millenials are buying real

christmas trees, where are they putting them? in their parents' basementbasem? where are the houses they're buying where you would put the christmas tree? david: they are renting a lot. one thing about a real tree, you can't get a fake tree to smell like that. the smell -- lauren: that's true. what is great, i'm sorry millenials, what's great about a fake tree, the prelit ones with multiple settings, you press the button and it goes on and flashes and the lights are perfect around the whole tree. david: thank you. now this, a drone grounding 1,000 flights at gatwick airport last week. we will talk to the author of "drone warrior" who says we need to be prepared because we're next. first, the biggest criticism of president trump's proposed border wall is migrants will just build tunnels beneath it. later this hour, we talk to the ceo of a company whose technology would detect that. ♪ i'm ken jacobus and i switched to the spark cash card

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visit redcross.org now to donate. in the last hour, brian wesburry says pressure from president trump is resulting in lower tariffs worldwide. >> everywhere i look, mexico reduced their tariffs, canada reduced tariffs on dairy, the eu is reducing tariffs on industrial goods and automobiles. china has cut tariffs on 1500 goods and none of this is recorded and so what's happening is that the pressure from president trump is actually resulting in lower tariffs around the world, which is like a tax cut for all consumers. so i actually look -- look, i don't like tariffs, i don't like trade wars, they scare the heck out of me.

however, the pressure that the president is putting on these other countries is working. a new way to save on travel. now when you book a flight you unlock discounts on select hotels that you can add on to your trip up until the day you leave. add on advantage. only when you book with expedia.

david: slight recovery coming on, folks. we were down 450 points about a half hour ago. we're now down. still nasty to see red arrows. you want to see the christmas green on a day before christmas, but again, there is a recovery going on. we're almost three days into a government shutdown over border wall funding. my next guest runs a company that could stop migrants from tunnelling under a border wall. come in, david brower, president of astro technology. how does it work? >> good morning, first of all. merry christmas to you. happy new year. we've got a technology that we have used over the last 20 years in deep water and with solid rock, deep water meaning oil and gas offshore, and the technology

that we've used is directly applicable to the border security efforts and it would detect tunnelling, as you mentioned, but also detect traffic of individuals that are topside and even low-flying aircraft. david: so this serves dual purposes. one, it could prevent people from tunnelling but it could also be a check on whatever kind of wall or fence happens to be protecting the border. >> that's right. it could work in conjunction with a border wall that the president really would like to have, and also it could work independent of the border wall. david: are you working with anybody in the federal government in order to develop this in conjunction with construction of a wall? >> we have been in conversation with homeland security over the last year and you know, they are in the evaluation stage right now, so hopefully this can get

kicked off here in short order. david: i would imagine there is competition for that. this is open bidding, i would imagine. do you have competitors that claim to be able to do the same thing? >> well, certainly there's competitors that are looking at various technologies. the difference between ours and all others is ours cannot be detected. there's nothing topside. you can't tell where it's located. and it's almost impossible to defeat it. david: what is your impression, i don't want you to -- i don't want to pull you into politics, necessarily, but what do you think? we now have a government shutdown as a result of debate over the wall. you have people like mr. schumer, the senator from new york, calling it a waste of money. what is your impression of whether a wall is itself the best form of security to protect our borders? >> well, i think what the wall does is it provides barrier, you

know. my political preference is i support the president in his efforts to secure the border. what our technology does that's different than the wall is it doesn't prevent people from coming in, but it detects their presence and it will give you an exact location, exact time, and the number of people that are penetrating the border. david: fascinating technology. david brower, thank you very much. merry christmas to you. now this. organizers of the migrant caravan under fire by caravan members for downplaying the risk involved in traveling to the united states. lauren, it kills me when i saw these children being used as tools, as political tools by people, not necessarily their parents, even. some of the adults that were carrying them and using them as props in this debate were not even family members. lauren: now the fingers are being pointed at the organizers of the caravan, thousands of

migrants basically stalled at the u.s. border. people without borders, a group of activists that organized all this. they told these migrants who were seeking asylum in the u.s., they say they told them the risks along the way and now they are saying no, you didn't. they have these votes do you want to stay in mexico, do you want to keep going, you better keep going, advising this is the best chance, and they did a voice vote and they kept saying let's keep going, let's keep going. now it's not working as they expected and they are blaming the activists. let me tell you what the activists say, to be fair. they say look, they were told by attorneys along the way that the detention centers had long wait times, there could be family separations, but not only is this terrible for those migrants, for mexico having to deal with this influx of people, it strains the resources. david: and as we saw, a lot of the mexicans themselves were the first ones to condemn not

necessarily immigrants themselves, but the people who were driving them to the border, because they were overflowing. we're overflowing on our side of the border but people in tijuana, officials in tijuana staying you guys have to stay home. whoever is giving these people the incentives to pick up their bags and go to mexico are telling them fairy tales about what it's like at the border. lauren: it's being described as a house without parents, little hope, little leadership, lots of finger pointing and in the meantime, a bad situation on both sides of the border. david: a tragedy. let's take a look at the board. not so much of a tragedy as earlier but still, not a good day for the markets. the dow is down about 215 points right now. again, negative trading day. the volume is actually slightly above average, surprising on the day before christmas. also not a good sign for the movement of the markets. again, last week was a really awful week for the markets in general. we were hoping for a little

boost this week. some people coming in and buying, not happening today. wrapping up this holiday retail season, we just had the last hours to get gifts before christmas. there is a big rush on. we decided to put jeff flock in the middle of all that chaos at the mall. if anybody can wade his way through it, it is jeff flock. we will check in with him coming next. ♪

david: a check of the big board, and we have done a lot worse today. of course, we have done a lot better in the markets in general, but it was looking really nasty when it was down

450 points. now it's looking a lot better. as a matter of fact, the nasdaq, which had been down even more percentage-wise than the dow, is now doing a little bit better. in fact, it came close to the flat line level. the dow can't seem to get off its lows or at least, i shouldn't say lows, 450 was the low so it's doing better than that, but nasdaq is close to flat right now. many americans doing some last minute shopping for christmas. correspondent and all-around good guy jeff flock at chicago's magnificent mile. he will take us outside but first, inside. i understand for those who don't have a weather check nearby, it's sunny but extremely cold. no surprise for chicago. so we appreciate you going outside. first, inside, jeff. reporter: you got the right weather report, david. absolutely. this is the 900 north michigan avenue shops. this is where if you want to stay warm, you can go into one of the big vertical malls in chicago, that's bloomingdale's back there. but yeah, outside is the

magnificent mile. i tell you, it is going to be a magnificent christmas, i think, by all indications. want to take a look at the numbers as we hopefully make it through the revolving door out there. this what is they call the magnificent mile. as you see, we're not teeming with people but it's a little early in chicago. good morning. there's a young lady from the salvation army. you staying warm? >> yes, i am. reporter: okay. good. you can ring the bell. go for it. there you go. that is the famed -- whoops. you see the famed water tower place. as we look at this, i want to put up the numbers for you, david. super saturday was a big one. according to national retail federation, 134 million people shopped on super saturday over the weekend. that's 56% of all holiday shoppers. what are they buying? well, no surprise, 53% buying clothing, gift cards were big as well as toys and games, books

and movies. they were the top four on the holiday gift list. you're right, it is cold out here but you know what, it would be worse. could be snowing. david: it could be snowing. jeff, i really don't see a lot of people out. the shoppers -- reporter: i'm a little surprised. david: yeah. chicago, people are used to the cold weather. as long as it's sunny, which it is in chicago right now, i would think there are more people out. but there is still that -- reporter: i would have thought so, too. of course, today is the day for bricks and mortar to be king because pretty much if you haven't bought it online before now, you are probably not going to get it. what can i tell you? the magnificent mile lined with stores, but lest we forget what christmas is all about, over here to the right, i leave you with the fourth presbyterian church which today, they are holding out on the magnificent mile. david: let's hope they hold out forever. that's a beautiful church. i know it well. it is a lovely area. if you ever get a chance to go

to chicago, you got to go there. jeff flock, i know you're moving part-time to philadelphia, by the way, so you will be on the east coast for awhile. look forward to that, jeff. reporter: yeah. little bit. i get around in my old age. there you go. david: god bless you. have a wonderful, wonderful christmas. jeff flock. reporter: you, too, david. david: last-minute shoppers pushing retailers to one of the strongest holiday seasons in years. we just heard that 134 million number. that's incredible. lauren: 134 million shoppers. last minute gifts but let me show you the numbers of people who said i don't want to go to the store, i want to do it all online. we are expecting to see a record online season this holiday season, up 18.3%. the record would be 13% total retail sales are coming from the computer and the phone. folks shopping with their fingertips because the shippers do an excellent job of getting it to you on time and then letting you ship it back for free as well. look at this. look at these numbers. these are the stocks that are holding up today. lot of green arrows.

david: on a very bad day, these stocks are good. lauren: so far, so good for brick and mortar and online retailers. the market, you know, wall street's very nervous right now and a lot of people are saying why, and they are pointing to the strength of this holiday shopping season as evidence that the consumer is relatively strong. david: look at overstock. over 6.5%. of course, that's one of those stocks that trades in big volume, so little bit of movement can mean a big percentage move in the stock. still, we don't want to downplay what's good on a day when the market is so far bad. let's take a look at the overall markets. the dow is down 250 points right now. nasdaq had been down worse percentage-wise. now it's doing a little better. it is still down significantly, about half a percentage point, but as you can see, it's the dow that's doing worse today. overall volume is slightly above average, which you would not expect on christmas eve. so that is not a good sign, as the bears are moving stronger

than the bulls. now this. the headline caught our attention. china wants to spy on you. friend of the program brad blakeman wrote it. he will make his case next hour. you don't want to miss that. more "varney" coming up. diet and exercise deserves the hard work that went into the science behind vascepa. prescription vascepa. vascepa, along with diet and exercise, has proven results in multiple clinical trials. vascepa looks different because it is different. over a decade of extensive research and development achieved proven results. that's the prescription power of vascepa. vascepa is not right for everyone. do not take vascepa if you are allergic .. tell your doctor if you are allergic to fish, have liver problems or other medical conditions and about any medications you take, especially those that may affect blood clotting. 2.3% of patients reported joint pain.

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>> good morning, everyone. merry christmas eve to you. stuart is on vacation to 11:00 a.m. on the east coast. idiom in california. you're right to the money. the market closes in two hours for christmas and stocks are down. we are well off the lows of the morning even though you're looking at a two under playa boss. we were down 450-point a while back. let's bring in which bring in joe shoulderwidth entrepreneur shares pared for his talk about what's driving the market lower today? >> while aiming, we have light trading during this holiday week. we still have political risk people are responding to and we still have some negative sentiment in the market spirit generally speaking we've got a

lot of good opportunities for investors for next year's positioning. david: before with the today's action i just want to mention volume, which is a little above average. above average does not concern you on christmas eve? >> now, not at all. still relatively light compared to a typical day. between christmas and new year's as many of your listeners probably know, marketscope about 1.5, 126% between today in the end of the year. maybe we'll see that power. if you look at where things were a few minutes ago we were dangerously close to not only the worst december since 1931, were only a few%, 2% away from the worst december ever. 14-point type three was the negative 14-point i threw was about 12135 before today. we are getting dangerously close and i just don't see the market

position today to reflect that appeared it's a good situation for investors right now. david: warren buffett is the first one to say he's happy whenever knossos panicking. you see guys in the tech sector. nasdaq i don't have the figures here, but it was down over 80% i believe last week alone so you'll see some good bargains in there. where would you look? >> facebook is down around 29% year-to-date. amazon is down around 30% from their highs. google is down around 21%. year-to-date, both facebook and google are negative and it got very strong growth. facebook is correct about 42% and profits. i just don't see the valuations today being justified. the prices being justified in terms of what growth they have appeared even in a market where we have decelerated growth we still have growth and people need to look at that appeared

turn into of course the big fear about facebook is there's a lot of problems now going into the future we didn't see a year ago concerning regulation and all kinds of stuff with social media. is that a concern to you? >> certainly it is a concern reflected in the price dropped 42% drop. the question is whether it's an overreaction. whenever investors look at something they have to look at the situation is that a good stock or value for a good company. facebook is dealing with all of these things. negative sentiment regarding the company. when everything is said and done in terms of revenue growth probably will be next year despite all the continued issues. david: very quickly do you own any of these big tech stocks? >> i own them all. i'm into entrepreneurial companies so i'm speaking from a position of ownership. david: the man who puts his money where his mouth is.

appreciate it. next up, jerome powell thrown out of office for economic south park does and get this, just getting word the president throughout another treat concerning the fed. the only problem our economy has is the fed. they don't have a field for the market. they don't understand necessary trade wars are strong dollars or democratic shut downs over borders. the fed is like a powerful goal for who can't score because he doesn't have a touch. he can't putt. come in, steve moore, author of trumponomics. first about what you make of the president street? on all five days the only thing holding down the markets, david, but it's clearly the trigger. either way, this didn't start last week. this started back in september. if you look at where the bear market started it was with the huge mistake that the fed made in september when they raise

rates. of course every sane person was saying don't raise rates again this year given the negative reaction to the first move and also the fact we have deflation. over the last year commodity prices are down 10%. that's a signal as you know, david, have deflation. david: there is no inflation. >> david, let me correct you. it's not that there is no inflation. it's deflation can be as bad as inflation. david: they believe the fed still believes that you have strong growth you have to have inflation. they don't get it. >> they think growth causes inflation. the keynesian model would be thrown out on the street. i was being a little bit provocative day in my piece, but i do think jerome powell should really think about whether he's up to this job. since he's been in the last two rate moves we've lost 3500

points on the dow. it's just zapping the economy. trump is right. if you look at the real economy, let's think about this. one week left in 2018. this has been a blockbuster for the economy. the strongest growth at least in 20 years. this has been a good year for the economy and i've never seen such a divergence in one of the real economy or the stock market is. david: then you have a horrendous press conference where jerome powell was talking about how important it was for marcus to you at the fed thinks. as he was talking the market went down 400 points. everybody in my office was saying stop talking. >> exactly. you think you would've thought of foul and say maybe this is a working. i agree with your previous guest that you look at earnings of companies they're still pretty darn good.

stocks are as cheap today as they seen them in 20 years. i love buying the blue chips right now at these low prices. i'm not saying by the way the selloff is done. if you're in a three-year, five year, 10 horizon from your going to love it five years from now. >> one thing i think the president is saying the u.n. i would think to be a problem is the whole thing still going on. but china has cut tariffs on more than 700 good and use a trade deal with china would actually overcome all of the state that the fed has made, right? >> i really believe so. when i said there's two factors, it's basically the fed taking down liquidity out of the economy when we need more of it and the other thing is the uncertainty about the trade deal. you're right, nobody seems to be paying proper attention. number one it's gotten hammered. you think it's bad here, look at what's happening in china.

their warehouses are full of merchandise they can't sell. i think there's a pretty good likelihood in the next 60, 70 days. david: 60 left coming out. >> is a pretty good likelihood. president trump is getting a call from president saddam hussein let's make a deal. let's get this done. if that happens i think the stop order goes through the roof. david: steve, i hope you can have a restful christmas. there's nothing of her life about the last two years that a restful. however, take 20 to 24 hours. have a wonderful christmas eve. merry christmas to you and your family. a couple of corporate stories for you. test flatbed model three prices at more than 7%. starting price for model three in china is now $72,000. sounds like a lot of money. this is the third time tesla has slashed prices in china.

take a look at amazon. the company says it's going to be spent more cargo jets to help it deliver more of its own packages. amazon already has 40 jab. and check oil down again, ladies and gentlemen. of course that means gas is down as well. oil is down about 2.5% right now. gas a cost of a gallon of regular gas is now $2.32. that is cheap. missouri has the cheapest gas in the nation. it is under $2 coming in that $1.99. i wish i lived there. president trump spending christmas at the white house that he canceled his trip to mar-a-lago because of the government shutdown. the president tweeting about it. virtually every democrat we are dealing with today's family supported a border wall or fence. it was only when i made it an important part of my campaign because people and drugs are pouring into the country unchecked that they turned against it.

desperately needed. the president still getting flak to withdraw troops from syria. he says we've decimated isis in that country but will talk to retired u.s. army colonel with 30 years of military experience who says now is not the time to be pulling out. the investigation of those drones at london's airport is still going on. the incident causing mass chaos at the airport. coming up, drug warrior brett malkovich, he says that could have been here in the u.s. if we're not careful. the third hour of bernie & co. is just getting started on this beautiful crisp disease. ♪ chris smith either air velocity is reading at fifteen fpm. why would you need to learn every detail about a company?

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train to check in the big board. the dow was down three and a points right now. 311 points as we speak. nasdaq has recovered a little bit dull down significantly, but all this is happening at a time when many people thought the market would take a break from the downswing's last week of 6%, 7% from a percent on the dow, s&p and nasdaq did that was the worst showing in some of those cases since the big recession to designate, 2009.

again, december has been the worst for some talks since the great depression. were hoping for a turnaround. so far hasn't happened yet about another hour and a half of trading on christmas eve. ceo carlos gohsn will be spending christmas in jail. the ruling came after prosecutors said they suspect did they foresee nissan to temporarily shoulder his personal financial losses in october 2008 after january 1st prosecutors can seek court approval for another 10 days of detention. now take a look at this headline. from fox news.com, trumps syria decision looks frivolous in the region where every move is deadly serious. the author of the headline joins us now. come in retired colonel david hunt, fox news contributor. colonel, what's wrong with this decision? >> yeah, the instincts are good. we've been there too long.

by the way it hasn't worked in afghanistan. serious has done okay killing isis. the problem with it is taking everybody out. we need to take both places, but leave a force to fight. the terrorism fight started 18 years ago. so what is the manner in which we been doing this has not been going well. isis has never been defeated. al qaeda was never defeated. when you stay in syria with the 500 plus men were sweet air and help this year he and kurds to keep attacking and killing terrorists and those that support them. not pull everybody back. david: you know, the kurds, that what kills me most about this decision. i understand the president telegraphed it during his campaign said during his campaigns have begun to pull back from her positions all over. he mention it by name. the kurds are brothers in arms and fighting isis in syria.

i don't think anybody has stood up to that murderous group as the kurds have. instead, we're leaving at the mercy of turkey and you know erdogan wants to wipe them out. >> we have a very, very short memory. less than four years ago the border was closed by isis. neither turkey nor the u.s. would touch it. this year he and kurds went in and killed the border. as the birdie said so eloquently, and they have been our best friends and they are great fighters. this opens them up to slaughter. pull back, but don't pull everybody out of syria or afghanistan. a small force to do only one thing. fight, fight and kill terrorists and those that support them. nationbuilding is a real problem. we don't do well. if we pull everything out of syria, how about a reagan will

be a third large to the server power they already are. stay with a small powerful force to stay influencing and gathering intel. not everybody should come out. david: we remember december 2001 a going over into january 2002 when a small force in afghanistan. does a small force of special ops guys. >> thank you. five special forces, a lot of guys with a ton of money to their country back less than 30 days. but what you get the nod as they were to make them jeffersonian, were going and nation build, we don't do that well. we have not done that well and that is one of the 17 years in afghanistan and seven in syria. we pulled back the stay to fight terrorists and of course apply the kurds with real money and real weapons so that we can keep

influence on this area. otherwise, isis gets reconstituted in syria becomes a launching pad. david: i couldn't agree with you more and all those points. secretary jim mattis of course leaving his post primarily because of this decision to pull out so dramatically. i am just wondering if the next defense secretary, his acting or placemat comments aren't even mentioned, the former deputy. do you think that the next defense secretary will be from the military or will the president has to go outside the military because so few military people agree with this decision? >> yeah, my bet is no. by the way, except for the e. ring, the pentagon and the white house, the secretary of defense and he was a great guy i know. by the way, i think he was told to but a letter brand. these kind of guys do not quit. same with mcmaster. i think it helps if they have their prior service, but they've

got it really as much an executive place to work as it is an absolute military background is not necessary. i like it and mattis by the way was a very, very good and it's a shame to lose him and mcmasters at a time when we need all the help we can get. the president needs all the help we can get. the country will do fine. it's already dangerous. i think it helps the government work better. david: great to see you again, colonel. have a very merry christmas. we appreciate you coming on. >> merry christmas, thank you. david: let's check out bitcoin, coming down a little bit. it was higher than that earlier in the day. not just for the gold, but it is indicative of other things in the economy. when gold is that the dollar is down. sometimes the market reacts well to that. not today, the gold is up 11 bucks right now.

almost a full percentage point up to $1269.30 per one ounce. we just got the news the president will meet with secretary kirstjen nielsen and other officials at 2:00 p.m. to discuss border security on christmas eve. more on that coming up. norad is going to be tracking santa this christmas eve as laura just told us that he delivers presidents across the world. 1500 volunteers are keeping the 63-year-old tradition alive despite the government shut down that is going on. first lady melania trump is also getting in the christmas fun. she will continue her annual tradition of calling in of calling into norad tonight to spread holiday cheer. she will be taking calls from children. want to know exactly where santa is? shall keep track of that. stay with us. ♪

david: and now this. this year christmas tree sales are up 10% compared to last year and it's all thanks to millennial speared millennialist tended to purchase real trees versus artificial ones because this generation believes buying a real tree is more environmentally conscious. this according to national chris mistry association know which of course has skinner park in the game. from christmas to new year's, a time for parents looking for a babysitter on new year's eve is even more cost way. urban center combat the most expensive cities to find a babysitter. san francisco not surprising

that the top spot. parents have to shell out $19.70 an hour. >> that's cheap. >> cheap? not compared to announce a babysitter. salinas, california $18.90 an hour. boston, massachusetts at $18.95 an hour. new york city $18.44. kansas city commiserate come i thought it would be cheap there. $17.73 per hour. if you're looking for a cheap place to celebrate new year's eve, molotov says gilbert, arizona is the least expensive city to ring in 2019. possibly one of the worm is. gilbert is a suburb of phoenix. number two is also, oklahoma. the justice department charging two chinese nationals to the scheme. up next to someone who says we need to be vigilant because china wants to spy on everyone of us. and check a big word.

it is looking worse and the ladies and gentlemen. stocks are down 400 points on the dow. hasn't been much to cheer about with the market this month, but could stocks regain their mojo next year. coming up a market watcher who says opportunities in this market are bound. he'll tell us where to look coming up. ♪

david: big board going in the wrong direction, folks. the dow jones industrial average down 14 points. come in, alan reck shot, ups financial services.

allen, we are talking of break about the fed and how much of this down market today and over the past week and a half two weeks is because of the fed? >> i think a big component of the fed, we need the federal reserve to show they're listening. they can just give us economic data in we understand they want to be data dependent. go into the economics and things that ubs looked at a year ago could be impactful long into the curve. we need a federal reserve chairman who can david everything is going to be okay. that's not the message that came out. david: seems to be stuck in an ivory tower. he saw his press conference where he was explaining things so the market would recover as he was explaining the markets are tanking. he seems totally oblivious to the market reaction. >> which is exchange because he has the market background. if you look at chairman bernanke, he went out there and

said everything is going to be okay. things are going to get better and explain what was going on and showed us the sensitive to what's going on in the market. being an adherent to the dual mandate is good. that's what the federal reserve is supposed to do. if you're not aware of what's going on with the president, you can wind up being self-fulfilling in terms of hurting the market. david: dual mandate meaning keeping the dollar study and keeping on employment check your unemployment is not a problem at all right now and what dangerous they are for the dollar? we do not see inflation, do we? >> are a little inflation coming in for the market. those transient inflation numbers when it was low for so long, i think you'll see that again. i think chairman powell would behoove the country to say i'm aware what's going on. they understand the needs of the president and the needs of the economy and not just

transparent, but be clear. david: very quickly 2019. >> huge opportunities out there but waiting to see that leadership for the federal reserve. they can work and understand what's going on. david: if we get a deal at china, even with all of the states the fed has made, we can deal with those mistakes if we get a deal with china in the market would take off. >> i would certainly be a positive. everyone's looking for the deal with china. you need all these things to work together. the president has done a lot in the past two years. we have a lot of good in the economy, the job says you said. we need people to work together. we can be divided. we can't live in a society that has such division even in the government. even in the federal reserve versus the fiscal side. we need to work together to make america the best it can be. david: great to see you in thank you for coming and let's hope

2019 is better than december was. it is now day three of the governmental shut down. blake bergen joining us from the white house. the president is going to hold a meeting at the white house today. he hasn't slowed down one bit for christmas eve. reporter: in addition to the scheduled the white house, that will take place that the president will meet with the secretary of the department of homeland security, kirstjen nielsen and other dhs officials. dhs is squarely in the center of the shut down for a couple reasons. first off the president won border wall money at the heart of all of this. the president has said he wants $5 billion for the wall. democrats have been willing to give the body for the that as it relates to border security. the white house over the weekend, the incoming mick mulvaney revealed that president trump would lower his number as democrats raise fares.

the white house reiterating that was the director of strategic communications. >> at this point as mick mulvaney has mentioned, it's really up to the democrat in the sense that we've offered them a deal. we'll see what they come back with. our goal is to get somewhere between 126,000,000,005,000,000,000. reporter: dhs, one of the reasons are involved, but the other is this one of the department that is a fact that by the shut down did not have essential government employees involved with dhs. not on the job during this partial government shutdown. david: blake, thank you for a match. on the shut down, brad blakeman, assistant to george w. bush. brad, you say trump should call the democrats blast. how should all this end? >> as mercedes schlatter said, this will end when democrats come to the table in good faith. this is part of their resistance

here this has everything to do with politics and very little to do with border security. mercedes says the president open to negotiation. he's the most transactional president we've had. he's not an ideologue. here's the deal is made democrats need to come to the table. having said that this is a read my lips moment for president trump. made a promise to secure borders and build a wall and other things to make it secure. he can't retreat on that promise. his slogan has been promises made promises kept. while this is a big one. david: you go a step further. you say the president means reading from her piece on fox news, the president needs to set a new painful record for a government shutdown that will teach democrats a lesson they will not soon forget. but not backfire on republicans? >> a good but not as much as reneging on a promise in delivering for the people. if necessary the president has to be able to take the position the government will remain shut

down until such time as democrats come to their senses. again, all about politics, nothing with border security. it's denying the president a fundamental campaign promise and quite frankly campaigns and elections have consequences. david: you been writing up a storm by the way. you have a headline on fox news.com reading china wants to spy on you. we must be vigilant about keeping americans safe from hostile foreign actors. he seems to me, brad, that finally after years and years and years, decades really the message is getting through to the american people about what the chinese are up to, no? >> china is probably our most dangerous threat. today, tomorrow and in her future. if were not smart enough to realize they don't want to take us out with guns or bombs or they think they can outsmart us economically and otherwise

politically. dte, huawei, two of the most voracious communication giants, they don't need the stylus chinese phones, but they embed chinese sons with their technology and what happens is they become component part that are necessary to the kind of cell phones we do want. and they use it for spying. david: not only the fonts by the way. we are coming up to 5g. you hear that a lot, but to put it in perspective we now use their phones mostly operating on 4g. 5g is 100 times faster in kerry's one times more information. 5g is going to be a huge jump in technology and whoever controls 5g controls the world. it's not too exaggerated to say that. they want to control the world. >> no question about it. let's face it china is a country of makers, takers and takers. and now they spy on us using

those products. if were not smart enough to realize what is happening to us, perhaps we deserve what we get. they're doing it in africa, venezuela, america. we cannot permit it. david: in venezuela they are like locusts. they come him up for is left of their families. finally it's going to be a painful transition to do what we have to do to get the chinese to play by the rules, but it's now or never. good to see you, my friend. have a very merry chris is. check the big horde and check out apple by the way. an 18 month low today. i should mention that in addition to being the 18 month low the dow was down 400 points. apple is down remember when it was a trillion dollars company paid the market cap of apple is $707 billion. that's still a lot of money but is $300 billion or near $300 billion away from the trillion dollars mark which it

was six months, seven months ago. it has come way, way down. reuters reporting that campbell is moving closer to divesting its international business. that just passing the wires. aquaman is now number one at the box office. it made nearly $70 million over the weekend. lauren, 2010 has been a record year for hollywood. reporter: worldwide that's almost 500 million. i'm going to make a prediction. 2018 is going to be a record box office year. right now before this weekend's movies, before everyone goes to movies for the end of the year we are targeting $11.4 billion. the expectation is we had 11.8 billion by january 1st, 2019. we do not have a "star wars" for the holiday this year, but we did have a star is born and that is getting a lot of buzz. david: good stuff. one airline encouraging people to miss chris is.

offering an extra reward bonus for people who fly today on nonstop routes across the international dateline. that means you have to depart on chris deceived and land on the 26th. you'd miss christmas. examples include service as good as singapore and l.a. to sydney, australia. there is still lots of confusion about what exactly happened with the drone, the industrial drone. at gatwick airport. brett velicovich joining us and joining us next says airports in this country could soon fall victim to the same kind of chaos. he is next. ♪ i am not for colds. i am not for just treating my symptoms... (ah-choo) i am for shortening colds when i'm sick. with zicam. zicam is completely different. unlike most other cold medicines...

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♪ ♪ this holiday season, families near you need your help. visit redcross.org now to donate. >> this weekend marks the one-year anniversary of president trump tax-cut. last hour we talked to economists brian sintra wreck about whether the cuts are leading to an increasing deficit. this integrity said. roll tape. >> i know donald trump has come closely with larry and i spoke on jfk and the reagan revolution. every time there's been a significant rate reduction in income tax on the corporate rate in the 1960s under jfk, ronald

reagan and now donald trump, there has been a tremendous boom. trump knows that. we are economic growth in the 20th century another 21st century to the air of nature tax rate cuts. if you are not tax rate cuts are not going to have a growth. but when i started seeing things, i didn't know what was happening... so i kept it in. he started believing things that weren't true. i knew something was wrong... but i didn't say a word. during the course of their disease around 50% of people with parkinson's may experience hallucinations or delusions. but now, doctors are prescribing nuplazid. the only fda approved medicine... proven to significantly reduce hallucinations and delusions related to parkinson's. don't take nuplazid if you are allergic to its ingredients. nuplazid can increase the risk of death in elderly people with dementia-related psychosis and is not for treating symptoms unrelated to parkinson's disease.

nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. tell your doctor about any changes in medicines you're taking. the most common side effects are swelling of the arms and legs and confusion. we spoke up and it made all the difference. ask your parkinson's specialist about nuplazid. david: over the weekend two people were arrested and

released in the u.k. after reported drone sightings caused chaos at london's gatwick airport. lauren, one of confusion about that. reporter: a couple arrested was angry because they were accused by everyone at christmas because starting wednesday night 1000 flights were canceled or diverted over three days 140,000 people effect did. where the drums? police are doing a forensic examination of one of the drugs found at the perimeter of gatwick airport, but also some report that maybe there was no drone at all. there is now a 63,000 u.s. dollars reward out to see by the gatwick airport to see if anybody knows anything. very confusing story. but of course drugs can be dangerous. david: one video seems to show a drone. it does appear that there is at least one video of a drone over gatwick. whether that was done purposely

to interfere with airline traffic is another question. >> there were reports of 67 drums in and around the airport, which is the second busiest in great britain. david: a runway airport. we want to stay on this because a note that the headline from fox news.com. a drone in london's gatwick airport just all people hostage. soon will be next. brett velicovich is the author of drone warrior. are we going to see attacks here? >> good morning, david. reports of the last few hours indicate aviation officials have no idea whether a drone was present. this speaks to the seriousness for the airport to be better prepared. have there been measures put in place at the airport, they would've been able to definitively answer whether or not there was a drone the first

place and whether or not it was a serious threat. david: let me just ask what kind of countermeasures can be implemented? >> absolutely. but talk about that. technology to actually counter drones is not new. in silicon valley they've -- most people not realize there's actually over 200 counter drone technology solutions on record as being available to use for this stuff. we've got things and worked on primarily focused on detecting, identifying and defeating now. one of the systems in place is called aero scope created by one of the largest manufacturers in the world come at you ji. it has the ability to geo-locate a drone flying in the air or has even been turned down. that exists in d.c. if somebody even turns a drone on, there's a good chance law enforcement authorities know what is because of the system. it needs to be used at airports all around the world.

that's not enough to defeat the threat. that lets you know there is a drone in the air. we also have systems that could jam signals from the drone. you've got systems in the form of guns. you have systems in the form of other types that will block the signal between the drone and the operator and make that drone think it is to return home or knocked out of the sky. david: why don't the birds have access to this if it is available as you say? >> david that's a problem they do. they chose to whistle past the threat in that the issue. think about the economic loss. millions of dollars were lost and it doesn't cost anywhere near that to put the systems in place. i know for fact the airport was told about the systems that they told not to use them. the truth is there is one no -- no one-size-fits-all and that's why you have to layer it. you have to layer with systems that can block it. there's even now systems that

can spoof the drone coming takeover controls and send it over new location. this technology is becoming more known, but at this point is just not as widespread as it needs to be. on top of that we've got to talk to manufacturers. the faa did wake up and realize this is a bigger problem. they been talking about remote identification for every single drone that flies has a system built in it with the manufacturer allowing officials to determine who owns the drone. serial number, trajectory. david: this is terrific news. i wasn't aware that the technology had to that extent. clearly the birds have to get up to date because they certainly need of repair for this. thank you very much. the book is drone warrior. we appreciate you coming on. nothing happening about this. certainly not in the christmas spirit. this is near, if not the all-day

low so far. we only have an hour left in trading and today it's a shortened trading on this christmas eve. not a bad day. it is a bad day, a terrible day. the volume i should mention is also above average and not not good. that means there's more juice among the bears than among the bulls. 18% above the 30 day average for all stocks. that's how much volume is today. the bears have the energy and the market is way down. if you haven't finished by and all the items on your christmas list, there's so little time left. jeff flock is checking with all the last-minute shoppers in chicago. he's on the million-dollar mile. we will check back with him next. ♪

david: these are really near session lows right now. the dow trading down 466 points, 468, keeps going down. over 2% to the downside. i just got an e-mail from gary kaltbaum, a stock analyst extraordinaire, who says we're still looking for that one strong reversal day where the market is down huge and finishes close to flat or even up. clearly it looks like today is not going to be that day. even though we should mention, christmas eve, to have a volume of 18% above the 30-day average is very, very unusual. there's a lot of conviction among the bears. bears, bears, everywhere. some see that as a good sign. maybe time for a bull to get in. it is christmas eve but some shoppers are still doing last minute christmas shopping. jeff flock is at bloomingdale's in chicago.

jeff, what's going on now? reporter: what timing, david. santa has just arrived here as we speak. look at that. he is right there. you should see the line here. there's santa claus. good to see you, santa. very nice. i tell you, santa typically is attired a little more formally here than a lot of places. this is the line for santa. this is i guess the go-to santa in chicago, one of the most popular. they wait for hours here for santa claus. there are a lot of people out shopping today. take a look at these numbers. i was surprised at this. who's finished? well, national retail federation survey says 44% of shoppers, almost half, were done before this past weekend. a full 24%, this young lady waiting for santa claus, it appears, with her mouth agape. lovely to see. i like that. at any rate, back to the

numbers, 24% shopped over this weekend, super saturday and sunday, then 7% said they will finish their shopping today and some will even finish tomorrow. not tomorrow, but after christmas, with those sales. this is the beautiful tree. david: that's lovely. reporter: 15 feet tall tree. that's a great one. david: very nice. reporter: check this out. you mentioned the market. i was going to say, retail stocks, if you look at those today, retail stocks are up. i think they really believe this is going to be a great christmas. david: christmas story, i think of gene shepard when i see santa in chicago. remember that? reporter: that's right. chicago guy. david: thank you, jeff. merry christmas. the dow is down 422 points right now. it ain't good. the dow is down just under 2%. it was over 2% to the negative side moments ago. someone could win a whopper of a christmas present. the megamillions jackpot keeps climbing ahead of tomorrow night's big drawing.

we will tell you how much the winner could take home, coming up. ♪

david: someone could have a very merry christmas. the megamillions jackpot reaching $321 million for tomorrow night's drawing. this is the biggest jackpot ever offered on a christmas day. if you're the lucky winner, you will have a cash option, $194 million. that's tax-free, ladies and gentlemen. let's get a final check on the big board. it is not a pretty day, ladies and gentlemen. the low of the day was 475. we're pretty close to that right now, just about 2% down on the dow. again, volume is 18% over what is normal for a 30-day average. lauren, it doesn't look good. lauren: it really doesn't. it looks like we might close near the lows of the session, too, which has been a common

theme, right? investors nervous going into the close and ho, ho, no for this santa claus rally. david: have a wonderful christmas, everybody. you have a great christmas, lauren. connell mcshane is in for neil cavuto. have a wonderful christmas. connell: you, too, merry christmas. thank you for this market you have given us today. what a mess. thank you very much. welcome you to "coast to coast." i'm connell mcshane filling in for neil with an hour left in the trading day. this brutal december continues for stocks. treasury secretary steve mnuchin appears to maybe spark some new fears in his attempt to calm investors over the weekend with calls that he made to bank ceos. the dow down 400 points. you also have the president going after the fed again. that brings us to blake burman to start off our two hours here from the white house with what ordinarily would be a nice calm day, the day before christmas,