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,

blake, but that never seems to be the case anymore. take us through first of all the treasury secretary's call with these ceos. reporter: christmas eve should be a nice day where you roll up the computer, kind of see where the day takes us. not today, though. the president once again going after the federal reserve. he sent out this tweet just a little while ago in which he said the following. quote, the only problem our economy has is the fed. they don't have a feel for the market, they don't understand necessary trade wars or strong dollars or even democrat shutdowns over borders. the fed likes a powerful golfer who can't score because he has no touch. he can't putt. this of course comes after the report over the weekend in which there were reports out there that the president had been discussing potentially the job status of jay powell, treasury secretary steve mnuchin had to take to twitter over the weekend and sort of tamp that back, at least brush it back. here's what mnuchin said. quote, i have spoken with the

president and he said quote i totally disagree with fed policy. i think the increasing of interest rates and the shrinking of the fed portfolio is an absolute terrible thing to do at this time, especially in light of my major trade negotiations which are ongoing, but i never suggested firing chairman jay powell, nor do i believe i have the right to do so. so that's from the treasury secretary, words quoting there the president. speaking of the treasury secretary, he made some news yesterday in which he called and had a phone conversation with the heads of the six largest banks in this country, in which the treasury department gave somewhat of a readout there. the treasury secretary said those ceos confirm that they have ample liquidity available for lending to consumer, business markets and all other market operations, which led to the question, well, why did the treasury secretary feel that he needed to make this call and why did the treasury department feel as if they needed to put that

out there. connell, a senior treasury official tells me the call was a preemptive step as it was described to me. the secretary, i'm told, thought it was the prudent thing to do after last week's volatility but as you have seen with the market today, this call raising a lot of eyebrows. lot of questions as to why it was needed in the first place, especially when you've got this administration saying that we're on solid footing here and growth is good and going to continue that way. connell: that's how investors took it, anyway. i didn't know we had that problem. that's the reaction, down 420. blake, thanks. blake burman at the white house. the dow, s&p 500 on pace for the worst december since 1931, as we have been telling you. so to talk a little more about this, especially in light of the mnuchin calls and presidential tweets about the fed, let's bring in kristina partsinevelos from the new york stock exchange.

david made an interesting point before wrapping up "varney & company." you usually get a light day on christmas eve but instead, there's fairly aggressive conviction to the downside, volume wise, down 430 points. >> that's because normally right before christmas you don't have headlines like this. any type of major headline, you will cause massive swings due to lower volume. that's part of the reason, even just now, we are talking about the fact mnuchin called on sunday these banks. where was the problem in the first place? people weren't talking about bank liquidity. that's a major issue. literally before going live, one trader handed me this article from "forbes" stating that adding insult to injury, investors dump u.s. stocks and buy china. so clearly, there's a lot going on in this market, lot of headlines and that's adding to the volatility that we are seeing even today. connell: we only have an hour to go, less than that, john. what did you make, first of all, of the phone calls with these top bank ceos, you know, at the big wall street banks that

treasury secretary mnuchin thought was necessary, to blake's point, treasury department telling us they thought they were getting out ahead of something after the volatility last week to be preempti preemptive. lot of investors took it a different way. how did you take it? >> as worrisome. you don't warn about a fire unless there's some type of flame somewhere. that's the logical reason to think about this. i'm not sure what they saw out there. maybe that's what investors are concerned about right now and it adds to the uncertainty. look, you can't choose one data point like the fed unless you have an idealogical bid that you want to validate, speaking on one certain data point. the truth is, it's a confluence of factors. we have a slowdown coming, we will have a great christmas retail season but we have uncertainty. this market has no way of predicting, that's brexit, the trade war, the capriciousness of this administration as far as the government shutdown with mattis and how that methodology may go into this trade war with china. connell: if you think about it, the administration, whether it's the president through twitter going after the fed chairman or

mnuchin making public this phone call, were to have instead kind of stayed out of it over the weekend, not said anything about those factors, to me, the headlines today were probably, would probably be very strong retail sales, we would all be talking about holiday shopping, we might even be mentioning the fact that china had said over the weekend through state media that maybe progress was being made on trade. instead, we're not, because the administration thought, again, with the president and with mnuchin, to get involved on these issues. what's your take? >> well, this isn't the first time headline risk and actions out of the white house are upsetting an otherwise possibly good economic news cycle. look, ever since the focus got away from corporate earnings and relatively strong gdp and a strong consumer with wage growth, the negative headlines came in. and the fed added to that. the fed is really throwing fuel on this fire for no reason. the worry about inflation -- connell: no inflation, right? >> oil is plunging right now

globally. you have slowdowns overseas and the trade skirmish is going to slow down economic growth if we don't get a handle on it. so the fed is creating a problem where none existed. they are getting dry powder, it's like breaking up with somebody just because you want to make up with them later. there's no problem. they don't need to do what they're doing. i wish they would take their foot off the pedal. connell: lot of people feel that way, including obviously the president. just wonder about him talking about it so much, if it essentially makes the problem worse because the fed is more likely to act and keep raising interest rates than if he were to take a back seat and say they are probably done for now because of the economy. >> well, that's a good point. we don't want -- wish he would keep off the twitter for awhile. let jerome powell take a good look. i think mr. powell is smart enough to see that what he's done has caused a lot of economic uncertainty, that he's caused these financial markets to pull back. right now, he's jerome powerful, the number one factor influencing these markets, and

if he would just change his tone, if the president would give him some room, he might deliver a message that could put us back on a course that focuses on relatively positive fundamentals, strong economic value, strong stock market valuation, and let this economy play out. connell: go back to you, john. what's really happening in the economy, in your view? are you really worried about a slowdown or is it more the talk of that and the fed's involvement, the president's involvement rather than the economic fundamentals? what's really happening in the economy, john? >> i think the economy's going to slow down, yeah, i do. you look at what's going on in retail sales. retail sales up 5.2% from last year. e-commerce sales are up 26%. we're at basically full enmroiment. we have wages that have increased. we have consumer confidence, albeit backward-looking indicator at an 18-year high. great things are going on in the economy. the question is what happens next. earnings will come in around 23% last quarter. they will come around 5% to 7% next year. that is still not awful.

that is not falling off a cliff. it is a slowdown. add to that the fed raising rates, there should be a pullback. i think what's making it much worse is all of this uncertainty that the market has no way to control and not really a way to price in. connell: many of these individual stocks, you have been watching along with the rest of us, flash up as john was talking, are already in quote, unquote, bear markets, way off their highs, far more than 20% in individual cases, general electric's a bit of a story in and of itself. the point is the nasdaq is already in a bear market, the s&p is getting close. it looked a little bit today like investors are starting to hop in there and find some bargains and now we have turned back towards the lows again. kind of interesting. >> it is kind of interesting, especially because we talked about the fact that buying the dip hasn't worked over the last month or so. back to john's point, he brought up economic slowdown. why aren't we talking about the fact the lack of liquidity in the market, you have the fed not just raising interest rates but tightening. that's a big concern when people

aren't buying this debt, who will buy the treasury bills. the other concern is we are seeing negative externalities of the tax cuts. i remember standing on this box at the beginning of this year talking about why the markets are rallying because all this money coming back into the united states and now it's a negative. on top of it, going into 2019 with these earnings calls coming forward, you will see cap x increase because of buy-backs. what makes for a little bit of an uptick but to me, that's not strong fundamental growth when you are just buying back your own company. connell: raise your hand, anybody have anything positive they want to share before -- it is christmas eve, after all. >> this draw-down has brought more favorable valuation of forward pe -- connell: you would buy? >> i think a long-term investor might have opportunity here. connell: john, see any opportunities? >> the cowboys won the nfc east. as a long-time cowboy fan, we suffered for about 20 years.

connell: as a jet fan i was happy they lost, their draft position got better for next year. which is always the case as a jets fan. merry christmas, everybody. happy new year and all the rest. thanks for coming on. we are down almost 450 on the dow. meantime, the government is shut down. the partial shutdown continues, no end in sight. we will talk about what happens from here and whether republicans could lose any advantage they have or any leverage they might have if the fight drags on. that's next. shield℠ annuities from brighthouse financial allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

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connell: we're on this market sell-off with the dow down 498 and the government at least partially shut down. before we talk more about that, let me bring you a tweet that just came in while we were in commercial break from president trump, saying that the wall is different than the $25 billion in border security. the complete wall will be built with a shutdown money plus funds already in hand. the reporting has been inaccurate on the point. the problem is without the wall, much of the rest of the dollars are wasted. republican congressman roger williams joins us. that is the president just, you know, two or three minutes ago, so what does that say to you? >> well, i think i have been supportive of the president in this all the time. being in texas, you understand the problem we have at the border. former secretary of state, i get it very personally, but i support him in whatever deal we

come up with, i'm going to be supportive of. but the resistance he gets from the other side is amazing. we know in the past they have supported border security and the wall, et cetera. i have always never been a total wall guy. i think technology and boots on the ground is a large component of it, but we need to find a solution. we need to find a common number and we need to get approved so we can do what the voters said in 2016, what frankly the house of representatives said last week when we passed our bill to support him. connell: all politics now, right, rather than dollars and cents. $25 billion or $5 billion or $2.5 billion, trying to find something in between from the $5.7 billion the house had. so what is that number that would be -- would kind of go over okay with the president's base? he really took some hits from his own political base. you think it's acceptable to kind of split the difference and get instead of five billion, two and a half billion, something like that? >> i think so. the president is doing everything he can. he's negotiating.

i'm a business person myself. in my business, the automobile business, you start out high in many cases, lot of people don't want to pay your price but you find a common number and i think that's what he's doing. as far as the base is concerned, i think the base sees that he's fighting. it's a promise he made, it's how he got elected. we need to come up with a number that he's satisfied with that we can begin construction and begin to protect our sovereignty on this border. connell: speaking of politics, it's obviously december 24th, christmas eve, as we are speaking. what if we get to january 3rd and there's still no deal and nancy pelosi's the speaker of the house again? then what? >> well, i think the chance of getting true border security will lessen, although it will be her responsibility and we know that they already agree that we've got a problem down there. they talked about it as early as 2005 with schumer and clinton talking about it. so it's politics. i think she is trying to protect her base from the far left so she can become speaker and hopefully, if that happens, she'll wake up and see that we need to do something down there.

talk to your border patrol. they will tell you they need assistance, they need help. connell: now, if she is speaker, from what i read and understand, she can just pass a bill similar to what the senate already did with no border wall funding in it, and the senate presumably since they have done it already might pass a similar bill. then what happens, the president vetoes it and he's stuck with -- how do we get out of this, in other words, do you think? >> i mean, that is a good question, when you have another side that's not willing to negotiate or cooperate. he would have to veto anything if he wanted to that would -- that didn't have border security on it. look, he ran on it and he's a business guy and he understands it's a promise he made. that's how he got elected. i'm sure if they come with something with no border security, he probably would veto it and we'll just have to see what happens. but right now, i think i support him in what he's doing, whatever number it is, i'll be supportive of. i think his base is, too. connell: that's the question. you may be right about that. see if he can cut a deal the

next few days. be tough obviously with christmas but maybe after christmas. congressman, thank you. merry christmas to you. thanks for coming on. >> merry christmas to you. connell: the jitters on wall street, we are down 475 points on the dow jones industrial average as we speak, in a shortened trading session, we close at the top of the next hour on christmas eve. lot of uncertainty whether it's the fed chairman jerome powell providing some of that uncertainty, or maybe the president adding to that with his criticism of powell. there's some blowback certainly from the departure of james mattis at the pentagon and how that kind of plays into decision-making in the white house. let's bring in former assistant press secretary to president reagan, movie nights with reagan author mark wineberg, who is here in studio. good to see you. thank you for coming in today. we appreciate it. kind of the big picture i think for wall street investors as they try to look at politics isn't necessarily well, the president gets rid of mattis, let's sell stocks. it's wait, what happened here in decision making? why wasn't mattis consulted on

syria. now, will the president not consult so and so on trade. it's just worrying to people, the unpredictability. you buy into that? what's going on? >> yes, i do. predictability is a very valuable commodity for presidents. you don't want, if you are in a war obviously you want to be a little unpredictable but people need to believe the president will say the same thing on tuesday that he said on monday. if he doesn't, then how do you know what to invest in? it's a difference between being a little unpredictable and being erratic. that's what scares investors. connell: so this president right now would be fair to say, is being erratic or has been his entire term? you think something's changed in the last few weeks? >> well, it's easy to play armchair psychologist. clearly there are a lot of problems mounting for him. he's always been a little bit erratic of sorts. some people are attracted to that. i think from an economic standpoint, if you ask a ceo what they want, it's consistent, sustainable earnings growth. and the trump policies are

neither consistent nor sustainable. so that would give pause to investors. connell: especially the policies, what we have been hearing from investors and to your point, ceos on trade. early in the administration, the trump administration generally speaking and the president in particular were seen as quote unquote, business friendly, cut taxes, cut regulations, but with the shift to trade, that's really hanging over everything now. i know the president wants to blame the fed for everything, but i know the ceos would love to see some sort of deal cut with china. think we'll get one? >> i hope so. i don't know. normally, you would see a path there, but in this case, anything can happen. even if it's agreed to, doesn't mean it will hold. they want to know what they can count on. they want some predictability and reliability and stability, and by the way, i know his style of governing is chaotic but calm has a place in government, too. connell: it would be nice, right? we have all been joking sometimes, by the way, the dow now down 500 points, we have all been joking throughout this

period, sometimes in the summer, other times in holidays where you would come in and work in news and you say today will be a quiet day. that literally never happens anymore. some people say it must be fun. obviously, it is interesting, but at the same time, maybe to your point, investors and others would say let's just take a day and take a deep breath here. it almost seems to never happen. i don't know if that's the president's fault but he definitely plays a part in it. >> he certainly has a major responsibility. if everything were going great he would get credit so it's only fair to lay the blame. i think him attacking the fed as he's done, which is really unprecedented, adds only to the instability -- connell: people will say other presidents have had disagreements with fed chairmen in the past, nixon had issues and other presidents have attacked the fed, some have done it behind closed doors, others have done it publicly. you think there's something different this time, like for example this morning saying the only problem our economy has is the fed? >> it's not the only problem our economy has. and the threat to fire the head of the fed even though he realizes now he can't, certainly does not add to an atmosphere of

stability here or globally. connell: probably adds to uncertainty as we just hit session lows in the market, because i was trying to make this point earlier, if you are aat the federal reserve and you kind of recognize the economy is slowing down and the new york fed president last week started to say you know, we are flexible on this, so yeah, we have two rate hikes planned for next year but might not do it. you see the president hammering the fed and it almost seems to me puts pressure on the fed to stay aggressive even if they shouldn't be. i know they are supposed to be apolitical but it's tough, right? >> it's a human reaction as a normal human being. the reason the fed is independent is a good one. the president can jawbone if he wants but at some point, he has to understand his messaging has a very negative effect on the market. connell: now, the treasury secretary also made these calls to the bank ceos over the weekend, convening the president's working group on the markets today to talk about market instability. we just had a head line off the wires from i believe reuters saying financial regulators have told the treasury department they see nothing out of the

ordinary in markets. which in a normal environment would be good news. but what's interesting about all of this is that not necessarily maybe that headline, but calls over the weekend as well, we are seeing things we may have seen say in 2008 when things were disastrous and there was a lot of instability out there and credit markets and elsewhere, and you're saying boy, are there problems here we didn't know about, do they know something we don't know. they keep assuring us they don't, but do you think that adds to the volatility just saying it or making these things public? >> i don't know if it's good or bad that they say they know things we don't or don't know things we do, but the phone calls are interesting. clearly they have added to an atmosphere of nervousness. the market is not down 500 points today because people have confidence. the market is down 500 points today because people are nervous. connell: they don't have a reason to buy stocks. why would you buy an equity, a share in a company today, when you have no idea what's going to happen say a few days from now and you are heading in a holiday week. >> if the president attacks that particular industry in two or three days, that could turn out

to be a very unwise investment. connell: right. so the other headline coming from reuters is the call between the regulators and the treasury was about agency plans during the partial government shutdown. that's what reuters is reporting through a source. so this all works into it but when you start to see headlines that hey, everything's okay, you start to ask yourself, you know, did we have a reason to think they weren't okay and the fed's playing into it, right? >> exactly right. connell: mark, good to see you. thank you. let's keep an eye on these markets. little off the lows but still down 485. good to see you. the nasdaq, as i said a few minutes ago, as you look at the dow, is in bear market territory. the s&p is getting there. lawmakers looking to hammer some of the tech companies with new rules on top of everything else. so you start to wonder whether there's even more trouble for technology ahead in the new year. that's next. we'll be right back with the dow down 451. from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees.

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connell: to foreign policy as we look at the market selloff, down

472 on the dow and the president facing blowback for pulling troops from syria. another new tweet is just in, like every commercial break we get a presidential tweet now. saudi arabia tweets the president has now agreed to spend the necessary money needed to help rebuild syria, instead of the united states. see? isn't it nice when immensely wealthy countries help rebuild their neighbors rather than a great country, the u.s., that is 5,000 miles away. thanks to saudi a tweets the president. former national security adviser to vice president dick cheney is our next guest. all right. i will start there, john. why not. it's the latest from tpt he president on the topic we were going to talk about anyway. he's making the case better than us. what do you make of it? >> well, this is a kind of old commitment, the saudis had said they were going to devote $100 million to help rebuild those parts of syria liberated by u.s.

and kurdish forces. now when you take -- if you take the u.s. out of that equation and syria is left to russia, iran, the assad regime and isis, or to some version of chaos, it's not quite clear that any amount of money is going to help rebuild syria. connell: okay. to be clear, you know these matters far better than i would, you're saying this was already on the table, this was already a known to people who follow this kind of thing, and if anything, the u.s. move might put it in jeopardy? >> absolutely. i think saudi money was committed months ago, something the president had gotten, but it was in the context of an american commitment to remain in eastern syria and rebuild that part of syria as a counterweight to russia and the assad regime in the east. connell: okay. that's good context and puts the president's comments which we just received in some better context from john. all right. let's talk big picture about what we're doing here. with the united states pulling

out of syria, you know the criticisms have come from the left and the right of this president, essentially saying that, as lindsey graham said, it's an obama-like mistake, similar to when we pulled out of iraq, and isis even, if it has been beaten down if not defeated, could come back stronger than ever, that kind of thing. what's your view on the risks here? >> i think any time virtually all of your enemies in theater are celebrating this decision and all of our allies in the region, including those who have put their lives on the line to fight alongside american forces, when they're demoralized by what's happened and completely blindsided, i think you're having a bad day for american national security policy, and i think the very strong resignation letter by secretary mattis just underscores that, that we are walking into really dangerous territory here

potentially. connell: what do you say to the president, though, and his supporters who push back on that and say, you know, it's people like you, john hannah, you worked in a previous republican administration that's kind of this old guard or old way of thinking, establishment way of thinking that got us into wars we shouldn't have been in in the past, that's why we're here and i have to kind of course correct and i promised my voters i would do so, what do you say to that argument? >> well, i'd say that listen, fair-minded people can disagree over this question of whether or not we ought to begin really winding down these open-ended conflicts but to do it in the way that the president has proceeded here, without any kind of consultation with his advisers, blindsiding allies, ignoring the congress and not really having a plan in place to execute this in the best way possible and minimize the risks, i just think is irresponsible and dangerous. even if you agree with the president. connell: fair enough.

john, thank you. thank you for the context on saudi arabia. good analysis, as always. appreciate you coming on with us. >> thanks, connell. happy holidays. connell: you, too, john hannah. oil, we have been talking about all these markets, in particular stocks and how much they have fallen but this decline in oil is really something else, like 40% plus from where it was at the highs. almost 42% off of its high on october 3rd. wow. oil price at $44.38. we will talk about it, the ups and downs, obviously good news for drivers, maybe not so good news for the economy. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business.

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connell: on the issue of the shutdown, are democrats just trying to run out the clock until january 3rd, something we were talking about a little bit earlier in the show, with the dow down 483 right now, about 25 minutes left to go in a shortened trading session. let's bring in california democratic congressman john garimendi. is that the strategy, nancy pelosi becomes speaker on the 3rd of january and gets more

leverage? >> no, actually the problem arose in the senate, where the senate refused to accept the legislation that the house of representatives put out, which did not deal with many of the issues the democrats want. the reality is that there is a compromise available. in fact, there was one in 2013 that came out of the senate, the house refused to take that up. that adds $40 billion for border security, visa work in the central american countries, but that wasn't even up for a vote or even a hearing in the house of representatives. bottom line of this is we need to work this out, we need to work it out right away because this is a problem for america when a major part of the government doesn't function. connell: let me talk to you a little bit in a moment about what a deal might look like, but we are getting tweets from the white house it seems like one per segment, the way the show's working out. they all seem to be on topic. this one, i will have you react. it just came in a couple minutes ago from president trump, who

tweets the following. i'm all alone, poor me, he writes, in the white house, waiting for the democrats to come back and make a deal on desperately needed border security. at some point, the democrats not wanting to make a deal will cost our country more money than the border wall that we're all talking about. it's crazy. i guess he's basically saying it's all politics. what do you say? >> as you read that, my mind went back to a horrible vision that i saw at a detention center on the -- in texas at the border, a young girl just barely able to look over the rim of her sill, all alone. she was crying because she had been separated from her parents. mr. president, i am sorry that you're alone. i'm sorry that you're feeling left out. but i know that there are

thousands of children that you have separated from their parents out there that feel a real pain. a real pain. bottom line of this is, the president caused this problem. there was a compromise, the senate voted it out just a week ago, and then it came over to the house of representatives and the president, the president changed his mind. the result of which was he demanded the $5 billion for a wall, without any, any understanding of what that wall would be and what it actually would cost to build it. the senate rejected that, even though the house passed it on a republican only vote. mr. president, i'm sorry you're alone. i'm sorry you're feeling sorry for yourself. but this is a problem that you created, mr. president. connell: all right, congressman, thank you. that's the democratic side of it. we will see if this thing gets wrapped up before the new year.

we have to wrap, get back to these crazy markets. merry christmas to you. happy new year. thank you for coming on today. we appreciate it. >> thank you. connell: another topic the president has been tweeting about is essentially the market selloff. he said earlier the only problem the economy has these days is the federal reserve. let's bring jonathan hoenig in on that and more. >> i think it's -- frankly, connell, it's adding fuel to the fire of what is one of the ugliest tapes, stock market tapes, havei have seen in years. this is a bear market. we have been talking about it for months. more than half the stocks, and so -- connell: by the way, when you say ugly tape, you just mean the price action moving lower. tell us what ugly tape -- >> exactly. today is a perfect example. about 1500 stocks at new 52-week lows. five, literally five stocks at new 52-week highs. this simply means the trend for many, many stocks continues to be down. even today, ford, apple,

international paper, jetblue, wynn casinos. stock markets tend to move in trends. you talked about this massive move down in oil. that's occurred over basically a number of months since october. so we have just seen all asset classes getting pummeled in the last couple of months and the president's tweets, in my opinion, are not helping that one bit. connell: adding to the uncertainty, right? so where is there a point, look, i thought earlier today, it looked like maybe we were getting close to a point where people say all right, this is ridiculous, price-wise there's some huge barbargains, great american companies that are essentially on sale, but it never seems to kind of catch on. why is that the case? >> the dips have not been bought. one of the good, you should say bullish indicators, is that vix index. we talk about it all the time. this is the index that tracks basically how much investors are paying for protection against the stock market dropping. the fact that that is a five-year high, you say well, is that good, that people are very

scared. ironically, it's good because that tends to not always, but tends to mark more the end of a move. once people start to get very scared, the move has already been made. i have to say, there are so many extraneous factors even beyond the markets. we mentioned the tweets are one of them. the shutdown is another. i think oftentimes, it hasn't had a major impact. generally the market doesn't tend to react too much but the old republicans would shut down the government to stop spending. we have republicans now who want to shut down the government so that we keep spending and debt really is at the center of a lot of what i'm seeing here. junk bonds, corporate bonds, getting absolutely annihilated here. connell: maybe it is the tweets and the other, you know, or the treasury call or whatever it may be, but the good news i guess this is sort of the point you're making, if it was up, it's essentially getting ignored, right? you could come in today, i tried

to make this point earlier today, the big story, retail sales look pretty good and you know what, maybe we're making some progress with china. they say they will cut some tariffs next year and they said there's progress being made on the chinese side in the talks, but nobody's talking about that. >> connell, your boss doesn't call you on sunday just because everything's okay. connell: that's what people are freaked out about. >> yeah. yeah. without question. for me, it brings me back basically to the midst of the crisis in 2008. you didn't see really terribly erratic markets until government started getting involved. remember the no short sale list for awhile, government had a list of stocks that you were not permitted to sell short. the more we see steve mnuchin, the plunge protection team, getting involved to kind of fix the markets, i think the more you will see people unwilling to step in and buy, especially now -- connell: we were trying to figure out what's going on with that. we have been told, treasury told us over and over it was quote,

unquote, preemptive, lot of volatility last week, he wanted to get ahead of it. it is puzzling why you would go public with a call like that, right? >> the banks really, this started based on something in october, the selloff. we were talking extensively about the fang stocks. oh, is it going to be -- and it has spread. it spread from technology to health care, energy in particular, and the banks have just been decimated. one of the weakest areas this year dick chen year. connell: do we have structural problems, they told mnuchin there's plenty of money to lend, everything is okay, was that something you were worried about before this call? >> i have seen it manifest in price action. take a look at jnk, the etf, exchange traded fund that gets a sense of what are junk bonds doing. they are throwing out, leveraged loans have been thrown out. i do fear, i'm not a cassandra and the market could certainly bounce but i fear the news of

what's behind this massive selloff particularly in banks and perhaps mr. mnuchin's call as well hasn't yet hit the tape. i don't know if it's a crisis or liquidity shock but something is very wrong when it comes to the banking sector. connell: we are all thinking about it now, for better or worse, aof the weekefter the we. thank you, jonathan. last-minute shopping, speaking of christmas, at this point, that better be under way, right? you're running out of time. jeff flock with a preview. jeff? reporter: permit me to inject some blue sky into the dark clouds in the stock market. you're looking at a 50 foot high christmas tree and there is one sector in the market that is actually up today. the answer is at the bottom of the christmas tree. stay tuned. you've had quite the career.

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and a beverage distribution supervisor. now i'm a director at a security software firm. wow, you've been at it a long time. thing is, i like working. what if my retirement plan is i don't want to retire? then let's not create a retirement plan. let's create a plan for what's next. i like that. get a plan that's right for you. td ameritrade. ♪ connell: we're in the midst of a market selloff. we just hit another session low a few minutes ago, down 508 points on the dow jones industrial average. good news, if there is good news out there, the closing bell is just a few minutes away because it's a holiday, shortened trading day here on christmas eve. that means last-minute shopping is well under way. jeff flock, live at bleemi i bloomingdale's in chicago with the latest. reporter: in the mall where bloomingdale's is located, lot of sales already here. you talk a lot about this down market, i'm going to show you

where the real action is here at the mall in just a moment. talk about the down market, take a look at one sector that is not down today. that would be the retail sector which really bodes well for this christmas. i don't know what boards you've got up there but everything from best buy, t.j. maxx, american eagle was up 4% earlier in trading. it's huge. i think that bodes well for christmas, for the retailers. of course, they have had mixed results. you see the lines here, oh, my gosh, look at that. i think it's the first time she's going to get to see santa, aren't you? >> it's her first time. reporter: what is her name? >> this is cossette. reporter: beautiful name for a beautiful girl. hope you don't get scared by santa which sometimes happens, doesn't isn't it th doesn't it? this is the line for the most popular sight in chicago. he really does look the part. not that he's not the real santa, of course. we got in the midst of the picture there.

grandma, grandson, or maybe mrs. claus. i'm not quite sure. happy christmas here. that guy is like a bowlful of jelly. there you go. connell? connell: you are too much. that is actually santa. no doubt about it now that we got the close-up. that is him. i didn't know he would be in chicago. i thought he was overseas. we were tracking him earlier. he better get a move on. thank you, jeff. we have retail analysts with us to talk about all this. you know, it's interesting, jeff's right, retail stocks are up today, bert, but saturday is supposed to be the big day and they haven't been up all the days. how did this super saturday go at the stores and what are people thinking about? >> connell, super saturday salad, so bath & body works, taking care of the customers, great sales surge. yesterday, super sunday saw a

big dropoff. more people were praying at st. patrick's than shopping at saks fifth avenue across the street. connell: they heard steve mnuchin. >> that's it. with the stock market getting crushed and the gridlock in washington, people aren't spending on luxury. it's rolling over the midtier and people are buying gifts for family and friends so retail set a record this year, but jerome powell is going to crush chain retail as well as the economy going into 2019-2020. >> i don't think luxury, i mean, luxury getting crushed doesn't necessarily have to do with jerome powell necessarily but it has to do with the fact that chinese economy is slowing down and there is a very real fear that there might be a trade war, and the chinese tourists aren't coming in, buying a lot of what they used to at stores like tiffany. you saw that stock get crushed. part of the reason is because of that nugget of information. but when you look at who was shopping over the season or especially over the weekend, 12

out of the 15 big box retailers saw the most amount of turnover online, especially, according to this study i was looking at. so really, a lot of people were going online. people weren't out at the stores, they were online shopping. connell: i want to put it in perspective here, because i know every -- good news is bad news today, the way things are being taken in the stock market at least and everything seems like it's falling apart, we are down 550 points and the rest of it, but big picture this retail season, super good, right? the economy is fairly strong, the outlook about the future you see creeping in towards the end of the season, is that a good way of putting it? >> yeah. the chinese aren't there but the french aren't there, the english aren't there, tourists aren't there, now the american consumer's cutting back and where the stock market and jerome powell come in is the retailers for the hourly workers from the warehouses to the stores, fully fund the underfunded pension plans. with trillions of dollars in

debt, that's not modeled so -- and the retailers whose bonds mature have to refinance at a much higher rate so retail costs will accelerate, hours will be cut, less o.t., less earning power, less purchasing power going forward. connell: trouble for the retail sector. >> they definitely model in the seasonal workers there. >> i'm not talking seasonal. connell: talking about next year? >> this is retail reality of the fundamentals of retail are the permanent full-time/part-time workers. they are underfunded, their pension plans are going from the green zone to -- connell: which companies are you talking about? >> you look at everybody from food drug discount to department stores. that's all going to happen and then hourly workers are going to be cut. our family founded everything from woolworth to rexall drug to red & white and worked with the ceos of all retailers. underreported problem. fox business exclusive, huge concern going forward.

we were together at another network ten years ago and correctly forecast the retail recession and shopping center recession well in advance. connell: you are right about the numbers. it has to be more than ten years ago because i was here 11 years. got to run. boy, the closing bell's going to ring. merry christmas. happy new year. thanks for coming in. quick break. then we close up this market. the dow down 565. we'll be right back.

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connell: all right, recommended to the market allows on "cavuto: coast-to-coast." i'm connell mcshane filling in for neil peered at the market will close in about a minute and not a minute too soon with the dow and the s&p 500 moving closer to what we would describe as bear market territory. the dow is down by 610-point spirit a lot going on. recall that the treasury secretary appeared to be adding to some investor anxiety appeared possibly the president streets about the federal reserve is all out there this market. kristina partisnevelos is covering the new york stock exchange as they get set to ring the bell and close it out for christmas on a big time downhill. reporter: you literally just hit the nail on the head. i was talking to a traitor before going live in each other's know incentive to buy right now. why would the president to weed out about the site at the small and and and steve mnuchin

created more havoc about financial peered the dow down 600 points. smp so close to bear market territory. then you have been asked back 120 points down in bear market territory. that is 20% off the highs. if we look bears three major turning downwards. this is coming off of the nike boost on friday when the earnings came out they did quite well so that's a typical sell off your scene over there. procter & gamble, johnson & johnson. no major news. let's move on. but we see first financial because steve mnuchin called all these bank ceos to check and see if they have liquidity. to see goldman sachs down, morgan stanley down 2% and bank of america down to .5% bear. still not reassuring.

mnuchin is not reassuring investors now that things are looking positive going into 29 team. as we look at the entire month, all 11 sacked errors are down for the month of december. you can see the not back down 50%. the s&p 500 down almost 20%. so really some negative trending normally when we have this rally. another major fact we talked about before. slow down in the fed tightening, but oil is the last thing i want to mention right now. smp did hit the market territory. oil, crude adding to weakness across and two the russell 2000. also in bear market territory this is christmas eve. normally expect in low-volume traitors, but that's not the case right now. you are seeing constant downward trends across the board,

connell. back to you. connell: yeah, what a mess. settle in down by 650 points on the dow jones industrial average. the s&p 500 to kristina's point right on the edge of what would be considered a bear market down just about 20% from its high. 19 and three quarters% now from its high. the s&p 2351. the nasdaq already in bear market territory. let's bring in jerry called om to talk about what happened today piece by piece. let's start with mnuchin. making these calls to the ceos and big rings, jpmorgan and goldman sachs of the world on the world on the weekend apparently from vacation in cabo and essentially according to a news release which we have from the treasury department asking him if everything was all right. do they have enough cash to land and i said yeah were okay. we been told that the secretary was going to be preemptive after all the volatility resolve last week. how did you take it? >> i have absolutely no problem with the calls.

i had every problem with the advertising of the calls. last weekmnuchin without saying everything is wonderful. here is my real problem right now. mnuchin and powell sound like 79 -- housing is by them will never go down and the economy is sound. the market is telling a different story and look what happened. not saying we'll be getting another way, but i'm 100% sure the market is telegraphing not only slowdowns around the globe, but recessions in many areas around the globe. connell: including the u.s.? >> is a pretty darn good chance also. remember the wealth effect is now trillions and trillions of dollars being lost and if you're a believer like meme that a decent amount of the economy throughout the years were central bank induced and now that's in reverse is also a problem at this point in time.

i can date here and talk an hour about the president and his inconsistencies and tweet which caused them a little bit today also. connell: to treat your referring to is about the fed, about jay powell and he had a number of tweets over the past hour. what he said about the federal reserve is the only problem our economy house at the fed. they don't understand a necessary trade wars are strong dollars or even democrat shutdowns over borders. this sounds like a powerful golfer who can't score because he has no touch in a campaign. on this idea they don't have a feel for the market. >> well, the president is wrong unto friends. this is the head honcho top dog they choose. everything he says is looked at by every bacon petition that manages trillions of dollars around the globe. when you say basically the

central bank head is a dummy, that is not going to instill confidence in markets. he can't. it's a gargantuan mistake to do that. the markets were trying to rally today and you can time it to the second when they started really coming down viciously to the treat at that point in time. connell: that's when you step back a minor point about about the markets trying to rally, and there were some stocks and still are on sale of people looking for bargains. let me hop it here a little bit. you know what, they were wanting the conviction to do that. maybe the treasury secretary call is already in the news over the weekend and quite possibly maybe it's the president reading about all of this because if you just stayed out of it, there is other news out there. trying to make this point last hour talking about china being made on the trade war with cuts

in tariffs next year. retail sales numbers came out there were positive. if that was the case i would've said things aren't that bad a muggle for little bit but instead were focused on all the things. when this all the sand? >> you got it. i don't know. i've been in bear market for a while. it's gaining some teeth. the one thing i don't know is how long it lasts or how far it goes, but i have to tell you and you know i measure my words carefully. this reminds me of an outlier event. the fact that it's down so much in such a short period of time and even if this percentage points are down on countries institutional crowd is still not satisfied. that's something you can't get in front of. >> you think there's some problem in the banking sector we didn't think was they are and now mnuchin is talking about it. is that what you're saying or no? i think leverages a problem. the easy money created a massive

amount of leverage and margin in the system and nobody knew about it. i think it's probably out there also is nuts probably why of the conversation was with mnuchin and the head honcho top dog from the financial companies. he would speak to a citigroup that is still done 90% from 2008 and a bunch of our taxpayer dollars does not thrill me too much. connell: your rancor about everything. we'll let you go. merry christmas, happy new year. thanks a lot for coming on. always good to talk to you, gary kaltbaum. doug katz joins us. he has some stock picks peter said to her producer this is silly. you should've had the mom last hour. maybe someone could have bought them before the market closed early. the idea people are getting in. i thought earlier in the day and for whatever reason the conviction wasn't there, but people got the sense that some of these stocks were cheap. what are you looking at now?

>> i'm in agreement and disagreement with my old eddie gary joya worked with 25 or 30 years ago and it's good to be on connell: were taking calls. >> i would say it's obvious that the illusion of positive possibles is quickly fading in the market that's hampered by political turmoil. and the growing belief that the administration is dysfunctional. in some ways, the president is the economic air out of the capital market and by undermining the chairman of the fed reserve, he's doing just what he should not be doing. there are some positives. the positive is a sentiment is not a good market timing tool. sentiment is now an extreme

negative rating. cnn has a reading index which is a low of zero and a high of 100. 100 being the maximum rating. today is to so it can't get much lower. connell: is not good news in some ways? >> it is good news. i've been a fair market value of the s&p for two years at 2400 i have announced docs until recently. i've been wordlessly buying stocks especially in the last two or three days. i don't blame the federal reserve, carmel adult. relying on artificial stimulants like monetary largess is the acne for fragility and vulnerability. taking the punch bowl away as short-term pain, but probably a long-term gain and making recovery more durable.

>> mnuchin is common of all the banks and i think he liked the bank of america city. connell: in terms of your question, the banking industry is in a very strong excess capital position. they've been mandated to reduce their leverage from 40 times two probably between 10 and five times. >> said they really are okay in your view. >> yes, but he should not be advertising as gary said. the last person i remember who advertiser liquidity was greenspan the day before the market fell by 21%. i buy bank of america, citibank, jpmorgan, wells fargo and even goldman sachs trading on the larger discount to book value than it did during the great recession in 2008. connell: gc value there. what about the market overall? it's pulled back so much. people watching depending on their age say this is the time

you've got a buy low, sell high. this is the time to buy the market? >> as a devotee of the board but that he says you should be greedy with others and vice versa come it's time to be greedy when others are fearful. i don't recall appeared in the last two or three years that stocks have been as attractive as they are. there are two problems. the market structure from etf's who tend to buy high-end dell low. they're currently selling love their price momentum based in the etf passes industry tends to be panicky and so you're seeing redemptions for sales. the other thing i'm concerned about is the negative wealth effect. associates say we lost $2.5 trillion in the u.s. stock market last week. we've lost 6.5 trillion from the top and this is going to reduce an already fragile domestic economy. connell: that does make sense. thank you so much for coming on

are great to talk to you. congressman darrell isa coming up in the shutdown talks. and i were talking about the market being down 650. we also have the partial government shutdown. where do things stand now? got his facts. i'm ken jacobus and 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. which i used to offer health insurance to my employees. what's in your wallet?

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connell: market selloff to put it mildly down six of them are the points of the dow jones industrial average today and i'm told this is the biggest single day drop that we've had ahead of christmas. christmas eve selloff since 1918. no idea what that means. perhaps the red sox will win the world series aired i really don't know. too soon for jokester that i was down 650 points. republican congressman darrell issa joins us to talk may be about that, but first of all about what's happening or not happening in washington. we are in the midst of the partial government shutdown. from what we hear and read it looks like this one can go on a while. do you think this is the democrats take control of the house? >> i do. i don't believe nancy pelosi has any incentive not to simply allow this to continue, give her speakership established, how the critical vote and then probably stable, no compromise. i didn't want a wall.

my left-wing support doesn't want a wall and it could go well into a new congress, one that i will not be at for the first time in 18 years. >> you're moving into a new position and leaving the house of representatives. this lets you have an interesting perspective almost looking in on this as an outsider or an outsider to be. what do you make the way of the republican party handling at this time round politically. >> it's always a difficult strategy. the one thing that's done well is a big chunk of the government is open and fully funded so with a little more isolated. obviously the president as commander-in-chief will continue to deal with the essential areas homeland security and defense. i think the important thing is that which you saw on the market today is in fact part of that news when there is no bad news. in other words, the economy is strong. taking on china everyone around the world agreed needed to

happen. mnuchin making those calls to banks to doublecheck and having a real debate about security and immigration reform. all of these things have worried the market into overselling and everyone knows it, but in fact we are not done overselling before we get a rally that is probably going to be second to none in modern time. connell: you might be right. we are waiting for it when that turnaround will come. let me ask you about the mnuchin calls in terms of whether or not something like that should have made public. calling up ceos to make sure they're all rights have enough cash on hand. we are fine and this is a preemptive move after all the volatility we've seen. it seems like a lot of investors took it as wait a minute, do we have a problem that we didn't think was the problem and they started to overthink it a little bit. do you think the call should have been made public?

>> it probably would've been better not to have them in public. i don't have secretary mnuchin's perspective. i will tell you that had it been me at least as a private citizen, i would've called jamie dimon has been said where you think the banking industry is. give me her perspective and taken that to the bank about a second call. having said that, i'm it is a good idea. nobody wants the black swan event. in 2009 they called it a black swan when in fact everybody saw the overinvestment and speculative housing. we don't have that situation now. what we have is a corporate economy. a lot of things that need to be fixed are underway including regulatory reform. tree into a barren number of issues this administration will have to head into 2019 which is already talked about. china trade is kind of hanging over the markets and everyone is wondering what will happen next.

the federal reserve is an issue and how they handle interest rate. not necessarily because of the government shutdown because you would think at some point in the next two months later at the special counsel robert mueller has to say. how concerned should the public and the investment community be about that to you think? >> i don't think the public should be confirmed at all. anything that takes two years to come up with a case on something that was based on quite frankly the national committee and a false dossier has limited impact. on top of that has been well-established by scholars on both sides of the aisle. you cannot indict a sitting president. he can't do anything that would be an impeachable offense. the prosecutor may come out with additional indictments. he may come out with allegations, but at the end of the day he's going to go away

and finally allow a president to govern without looking at something from a campaign that is now two years behind us. connell: as you had to go to the u.s. trade and development agency. we are thank you for your time and all the best of that new position. merry christmas. president trump came out earlier today and said the fed's the only problem the economy has. we'll discuss that when we come back. don't go away.

connell: already in the thought that i was down 2% or more for the fifth time this month. five times this month alone we've had 2% drops in the dow. with your sake you seen this before, you have peered president trump making comments on the fed. added to investor concern out there the fox business network jennifer schomburg or has the details on that. she covers the fed for us in washington.

jennifer. reporter: hey, come up federal reserve's worst field were realized when president trump was contemplating firing fed chair jay powell over frustration over interest rate increases. the administration officials move too quickly squashed that. treasury secretary mnuchin's tweeted that he spoke with president trump and told mnuchin never suggested firing chairman powell nor do i believe i agreed to do so. connell, would have to be a high bar to remove the fed chair per the federal reserve access the governors can be removed for cause. that has to do with criminal activity, and ethical or violation and a difference on what policy should be. removal of powell, legal experts tell me know. the president meanwhile continues to blast the fed meeting and the only problem our economy has is the fed.

they don't have a feel for the market. he goes on to say the fed is a powerful golfer who can score because he has no touch. president trump is to stop raising rates at a meeting last week. the fed unanimously raises rates by a quarter of a percentage point. any chance would have a devastating impact on markets that are already under pressure. it could undermine investors confident concerning policy without political interference. the fed declined to comment on this. back to you. connell: fair enough. thank you. let's go to financial market strategist alan macmahon to talk about those. jennifer brings up one of the comments we heard from the president if the fed doesn't have a feel for the market. what do you think? >> i try to focus on price not politics. obviously we had a positive turn in the markets before the last couple of months.

it was driven by the fundamental fact of making record amounts of money and the ratios were doing while and we had growth in earnings per share on a quarterly basis. if you look at 2018 and maybe the best year for earnings growth we've seen since 2010. i think the market can do okay here. it's the season of giving and were giving back the gains of thought in the last year. connell: so much negative sentiment. how does that play into things and your point i guess it sounds like some of this is just overdone. >> yeah, the sentiment has shifted dramatically. let's remember two months ago or three months ago we were at an all-time forever high. nothing has changed except for the sentiment and you have to look at this as an opportunity. let's talk on the positives here.

interest rates is a conversation every single day down to 275. the yield is at its lowest level since april. yes the fed has raised rates but that hasn't spilled over to look at longer-term rates are not very much a positive as well is the fact oil was down here. connell: that's a positive. that is not some sort of a signal economies around the world are slowing down and it's about time sign for global growth next year some argue. >> right. but the global growth concern. between $40.60. yes we had a breakout in 2018. we've come back with the range and so it us or the market also on the positive. the dollar may be done.

as far as interest rates go, and it's a 2023, 2024 there's nothing. that can be taken off the table and so i don't see the dollar continuing to it and we did put in the high the last couple weeks. that could be very much a positive for the markets as well. connell: as a final pointers to things big picture that would turn things around if they work their way into the news cycle. one would be the federal reserve. they be more dovish inflexible. >> to trade deal could be one issue we set it aside. i'm almost putting interest rate issue to the site now because it's not a factor in 2019. it's more a psychological issue that they raise rates but we are still at very low levels. let's get back to the

fundamental fact that we look at the price to earnings ratio we are at about 14.5. stocks are cheap. right now they're a super discount. stuff your stocking. connell: you calm everybody down. you should put a call into all the top ranked ceos and tell them everything is going to be okay. thanks a lot. merry christmas. >> when you're in a hole, stop digging. connell: it didn't come across right whatever the intention was. a trade deal with china brings us to gordon chang. we did have the author of among other books the coming collapse of china. we did have some news i thought over the weekend that it wasn't for the mnuchin stuff in the market today would be getting more attention. the chinese say there's progress made in the talks on the lookout terrace next year. what's going on best you can read it?

>> i think what beijing is trying to do is make the environment as good as possible. they denounce reduction tariff starting january 1st or the standing committee of the national people's congress is going to consider a law which would then forced transfers of technology. that's of course a major issue for us. connell: okay, what does next year there could be a deal. that's not necessarily a good deal if it's not the right deal. what you see happening? >> you have a treasury secretary who certainly wants it. the president might want to. you look at the stock market declines and the president might decide he needs to have some sort of arrangement with the chinese. i think it would be a bad thing because we've had these deals so many times including a 100 day

action plan of last year announced by wilbur ross after the april mar-a-lago summit between xi jinping and president trump beard we've been down this road not only this administration but administrations in the past and it never works out because the chinese could not honor their obligations. connell: i still see the administration such as the own personal instincts handling the talks, peter navarro having a say in all of that in all the happiness anything aggressive on china and still wanting to go after having been on the other side. it's interesting you say your fear is the opposite and the cut of ideal. >> the one thing is the chinese can't help themselves. they will violate a deal if it does come to fruition. we will then get really angry. this is something where this is a dynamic that will continue. we will eventually see a more

resolute policy. and whatever follows suit. connell: what is the key to getting there? the tariffs they forced him to the table and i was the wrong way of going about it. >> the administration on that point is certainly right. the reason the chinese aren't making concessions right now is because those tariffs are biting into the chinese economy and also causing a lack of confidence in beijing at the time which was already flagyl or you have the economy according to one professor in beijing for we know more than 1.67%. so it is the tariffs in the right way of dealing with this is to say that chinese workers no deal until you stop stealing our intellectual property, until you stop these predatory trade actions. when you do that will take the terra take the terrace off. connell: how is xi jinping doing? >> is in a really difficult time right now. they weren't able to hold the fourth communist party meeting because there is no consensus.

there is no ability to get some sort of agreement from other factions in the communist party. that's a real indication of discord. it's hidden but nonetheless if they are. connell: all plays into it. we'll talk to you again soon, gordon. always good to see you. >> merry christmas, carmel. connell: u2, gordon chang. if you look at the nightclub and make your microsoft, johnson & johnson, those are some of the biggest losers of all over the board in the red down 653. we'll be right back.

connell: on the market selloff we are down 653 points in a shortened session on wall street today. so many concerns up there adding to the volatility and uncertainty. when you could argue his foreign policy with james mattis leaving as the secretary of defense for

the president expressing concern about other nations as well. former u.s. or to the e.u. under president obama anthony gardner as our guest who happens to be here in new york at last we spoke during the brexit breaking news you were in london at the time. that's one of the things out there and value added and the uncertainty here in the u.s. are you worried about the state of relations between the united states and the rest of the world or should we be in it so why? >> and terribly worried about the state of relations between the u.s. and the rest of the world. i've been worried for a year and a half that there's some geopolitical the market has been underestimating. connell: such as? >> trade. i've been saying the risk of an undermining of able space for some including the world trade organization coming in now, coming apart is being underestimated. connell: underestimated? i would think trade concerns are in the message.

>> when i used a gore run warning about what could happen, i basically got a yawn. now people are taking this seriously. connell: at the beginning everyone was assuming to their detriment and a lot of people got caught on the wrong side of the financial market that there would be more deals cut. >> at the absolute right to the markets have been trading on short-term as in not distinguishing between the signal in the noise. for example, in buenos aires, and the meeting was xi jinping announced a big dutiful deal in total disagreement about what actually had been agreed weird markets go down. there was a meeting between trump and yunker announced a big beautiful deal of the rose garden. and the markets went up. there was confusion about what they had agreed markets go down. they will pierce through the fog. connell: what about next year economically. we keep hearing about last year story in 2018 was about

synchronized global growth and now it is sort of the opposite. it hasn't quite gotten you in the u.s. her concerns about growth slowing down. europe in many ways is really in trouble. >> europe is in trouble with growth rate slowing down. one really has to like a country by country. some are performing white -- quite well. germany slows down but it still growing fairly robustly in scandinavia as well. u.k. has come down significantly. used to be the best performer. now it's one of the worst performers because of the uncertainties of brexit. one has to go on a country by country level. that's nothing new and fortunately uncertainty for a long time but arguably worse. connell: which area should we be up for most worried about some name that might calm not only affect us but global growth overall. which part of europe is the most? the u.k. because of brexit? >> i'm certainly concerned, and

what does a low probability of something that could happen. even if it's not a no deal hard brexit and i think there will be a deal, there'll be uncertainty uncertainty in the u.k. for a long time. i think there will be a deal. there could be about something that even a few months ago could be her deal. improve somewhat with some trimming flood say with regard to the new partnership that's been offered by the e.u. to the u.k. but you know, there's uncertainty in the market and are businesses that are used to work with quite a lot when i was unopposed in brussels have been making decisions and are slowly diversifying the risks were necessary. connell: with an example of that? lots of banks. those who didn't have subsidiaries in the continental europe or in ireland have is not pushed them so they can continue after brexit day. a lot of manufacturing businesses who are exposed to

the issue of tariffs for products brought into the u.k. and sold to the continent are completely reengineering their supply lines. connell: any optimism that the story gets better next year and another in steel starting to be cut whether it's u.s. and e.u., china or things get worse for they get better. >> i certainly hope they get better. i'm extremely pessimistic about this for a whole bunch of reasons. the e.u. has tabled a very detailed proposal about how to reform the world trade organization world trade organization. there's been no engagement for this administration on that paper. the 90% overlap in our interest in what we should do to make it more affect this. we should be working with the european union, and appointing a gun on that side to address the issues of technology transfer you've been talking about on the program and were not doing that. i'll give you two examples here of how this has real consequence for business. we're joining russia in a wto case right now with regard to

the measures they took against ukraine during the crimea crisis in which russia says we have a national security exemption and if we invoke that, judges cannot rule on the case. saudi arabia is the same thing and it suffered to embargo where we are taking the side of saudi arabia saying you have the right to invoke national security and there's no way for judges under trade rules to decide. if that happens, wherein the law of the jungle. connell: there are reasons to be. thank you him ambassador for coming in. merry christmas and happy new year. the s&p 500 closing just short as a bear market continues to cover the selloff in stocks a day just about 20% from its high. the dow fell 653 points today. we'll be back to talk about it all in just a moment. in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities

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connell: the mass of the market, do not back in bear market territory down well over 20% for the high. interesting we are looking at apple agrees to go all all in on this apple market cap of a trillion dollars. apple is now falling below 700 alien dollars in market caps. let's talk about tech a little bit from what they have in store for next year has been a turning

sentiment. market watchers are here to talk about it with us. dori, let me start with you and not only apple, but technology in general already facing a number of headwinds and caught up with everything going on in the market. is it just a lawyer maybe now the time is -- now is the time to buy because they fallen so much. >> classic case of baby in the backwater with the technologies talks. maybe stay away from those of facebook and google. apple were concerned about china and drop in sales. you're talking about a company below 10 on an enterprise value now. that's a great company. if you liked apple before you got a ticket now. microtechnologies is below two. about 127 with the p.e. forward ratio of 50% margin and a 50% return on equity number. even if it were to cut habits optics than half, those numbers

and fundamentals with soviet grade five. there's places to pick where he could do well. connell: if you look and he went through a whole list of statistics bear that lauren: valuations that the stock on amazon by the way 30% plus, obviously stocks can go down more. technically they can go to zero so they can keep falling and it's tough to tell when the bottom is fair. you must be thinking about buying some of these, no? >> there's certainly room to be optimistic. the tech companies are making some big investment with all the cash they have. look at amazon go and the airline to deliver packages. google making a big investment. way well for driverless cars. facebook is doubling down on his virtual reality for billions of dollars four years ago. i think there is room for these

companies that continue to grow and increase profits. connell: i was wondering whether you're just upset because i was inking as you are seeking that they are going to get hammered next year. some of that is going to be on the regulatory side of her of facebook, and maybe even if you're google. so what impacts will all of this have? at least a lot of talk about washington, maybe even some action. >> there's been talk of regulation but it has intensified lately. the likelihood that congress acts unfortunately in my view is higher than it then for a number of years with some republicans sounding alarms about the potential for regulation and the president has been waiting in against companies in several cases as well although whether that means the administration will support regulation is unclear. on the regulatory side notable tim cook from apple has been a big proponent of new regulation.

the device is in other working on user data to deliver ads, the risk is lower than other companies. connell: what is the risk for technology companies in terms of regulation. there is money of industries regulated. many more so than technology can still make money. is it a big-time risk in terms of investment you think? >> is a risk of air and it's hard to gauge. we've got two issues. time in the bottom and time in this regulatory issue. we can't time the bottom. if it's a good deal pick the stocks that are good and those that have less regulatory risk in the world got overtime. my guess is they're probably less regulatory risk than what the headlines are showing. these are big companies and a lot of these congressmen like to spout off and they do very little. connell: you're probably right about that. why have they fallen a lot in their stock price. dore, ryan tommy thank you to both of you. have a great christmas. thank you for coming on.

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connell: another alert on the markets for you. the 10 year treasury yield today, 274 following to the lowest level it's been not since april the second. so that is your whole idea of flight to safety. 274 on a tenure-track rotary --

treasury yield aired on the shopping front today obviously it's christmas eve it's christmas eve in the rush better be on otherwise it's going to be too late. 22% of americans that acted to take on more debt as a result of their holiday shopping this year. kitty heel is here. we talked to katie all the time about how much people are spending and forget about the consequences. that is the thing you see something that looks so good and you forget to look at the price tag in the next thing you know you've taken on too much debt. >> 25% of people are paying off the debt they got last christmas. people spend too much a special with last-minute shopping there like i get this done. don't care what it costs. and then here you go in this pile of trouble. connell: maybe this is more likely to happen than in a bad economy. interest rates have been fairly low and also most people do want a job have a job. >> worry about it later. they are going to be worrying about it later. recent credit card debts arise. so watch out this crazed as.

>> reading the things that are out there and one of the things interesting as you say to people don't panic. worse comes to worse, the thought that counts here. don't just jump in because you can't find them. >> as soon as you panic you start throwing money at the problem. if you can't find a gift write something you want to give them. do something that by this expensive thing they don't even need fear no reason to do that. connell: some of these stores have what they call price matching and they can take advantage of that. most of the big box retailers target wal-mart, lowe's. you can pull an ad from amazon or another retailer up on your phone at the register is they they have this price, can you match the price. >> when you say use e-mail, one of the dagen they are to your advantage, what does that even mean? >> some retailers target gets

now. you can e-mail the gift you want to get. gets now allows you to e-mail than the actual guessing i got you this great toy. connell: is a final point we'll talk about the environment in general because i'm interested to see what observations available to make. you say make a beeline to the back of the store. >> i want these people generally not very going to find a good deal. connell: that's true because they're going to get you. >> they know it. your last-minute shopper now. they know they've got she been there. connell: you're lazy all the time. just do it online. we were talking earlier with retail analyst in there. a little bit mixed on how the season at don. the numbers look pretty

concerned at the end about the economy and the stock market going down. what are people you've been speaking to tell? >> a little bit of fear. this is a good economy. we are seeing the amount they spend on gifts is kind of increasing. but people are getting a little nervous and not jenna be effective. we don't know. and we won't know until january or so. but people are a little nervous. connell: at least anecdotally if you go to the mall and doesn't always tell you they're buying a lot. sometimes it's just kids hanging out at the parking lot is packed and you got the field early in the season like were going to have a great season. it'll be interesting to see. connell: yeah, absolutely. >> go for it, but i'll spend too much. connell: katie, thank you. >> thank you tiered connell: we thank everybody for watching us today. what a tough day for markets.

who knew would be the spot in a shortened trading session. the close up to 1:00. can you match up to 4:00. on 653 points on the dow jones industrial average. in connell mcshane and for neil cavuto. great to be with you. have a great chris ms. you live back here on monday. sure into a good sunday morning, everyone. thanks so much for joining us. i maria bartiromo. join us i had exclusively on "sunday morning futures." mark meadows this year. he told president trump as members that have the president's back partial government shutdown. senator david perdue on when the stalemate might end. plus also coming up, congressman on his pending investigations into the trump administration. republican john ratcliffe on what happened now to the gop probes into the fbi and the doj. plus general jack keane is here on the fallout from the modest

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