charles: consumer is 2/3 of the economy. hard to argue we're going into recession. hard to argue that. buys, watch david tonight at 5:00 p.m. meantime, blake burman filling in for neil. >> my first time filling in for neil. handing me a market at market highs. i am hoping i do not mess it up. charles: it is called the cp effect i am filling in for neil today. the dow up 340 points which he said the shutdown could go on. he continued to take aim at the federal reserve. the president signaling you know what? rates might stay like this for a little while. oh, by the way, you might want to buy this dip. it is still christmas. a whole lot going on.

hillary vaughn at white house with the latest. hey, hillary. reporter: blake, president trump says the only problem the economy has right now is the central blake. sparking concerns that federal reserve chair jay powell may be out of a job as the president continues to rail against rate tykes. steve: is set -- chairman kevin kev. >> fed chairman's job is not in jeopardy by this president? >> absolutely. reporter: he says he supports the independence of the fed. overall the economy is going strong. i asks hassett if the president is concerned about long term impact on economy because of an extended shut down. hassett played down any stalemate and the it may slightly impact the gdp for the fourth quarter, but back pay for

federal employees would give a bump in the gdp for the first quarter of next year. >> if the shutdown extended through the jobs survey week about january 10th, then the government workers who are not reporting to work would show up in the unemployment statistics as well. that would be more of a temporary thing. in the end a few weeks shutdown will not be something that has any kind of significant effect on the outlook. >> hassett making it clear ending this government shutdown for the sake of the market is not their top priority. but time is not on their side. on january third. 3rd a week from tomorrow. democrats take over the majority. a source in the house, this is out of their hand, up to the senate to mass will funding and democrats to work out deal with blake. blake: hillary vaughn at the white house. merry christmas to you. reporter: merry christmas. blake: the president's comments added to ongoing government

shutdown are they adding to fears? to "wall street journal" assistant editor james freeman. how are you doing merry christmas. >> good to be here. >> what do you make of what the president said yesterday, and what we heard from kevin hassett. >> this is right on from kevin hassett, not a major economic event. this is not much of the government shuts down of the most of us don't notice it when not operating at full, fearsome capacity. also probably not much of a long-term political impact either. look at history of shutdowns, they generally get forgotten fairly quickly. blake: here's my read what heard from president trump yesterday. he is taking aim at jay powell. we heard from the president who said yesterday, you might want to buy the dip. if you have money in the bank, rate increase is not necessarily a bad thing because your money will not make more money.

are we getting realization of president trump this is kind of going to be the way forward here and you got to deal with it? >> it is good news for savers. they have gone through an ear a where they weren't getting any return on their money. sparse mr. powell, hard to argue the federal funds rate should be zero in real terms. he has come up slightly above that. historically it is still very low. this is a weird era we're in because of the huge expansion in the fed's balance sheet over the last decade or so. that's now come down about 400 billion from its height. it is, i think we're right to be paranoid about the fed given their history but i would say to the president, maybe he is realizeing things are pretty good. the economy's growing and got concerns about the future. the inflation is relatively moderate. the fed is raising rates as it

probably should after era of near zero. blake: here is what "the wall street journal" editorial board said christmas eve in an op-ed that was published. said this quote, the fed is obligated to focus on the real economy rather than the stock market which has had a good, long run but market reaction to the fed's decision has been negative enough to warrant some soul-searching. some soul-searching needed there, james? >> well they certainly do pay attention to the data and they like to do that. they, seem to be emphasizing that more under the powell fed but i think it is important to note that, that the underlying economy is still in pretty good shape. obviously some bad news on that richmond fed manufacturing index but on the other hand as we've been hearing on this network over the last few minutes, very strong consumer spending going through this month. so, i, looking at the dow and

the s&p and 15 times expected earnings, i don't make stock predictions but, when the president talks about maybe it is a buying opportunity, i think historically you would say, maybe it is. blake: should we be hear that from a president though? should we get market advice from -- you can get market advice from anyone it is worth just that i guess but should we be getting it from the president? >> some people say he spends too much time talking about the stock market, therefore he will own the downs and ups of his tenure. blake: is though or is he just passing the blame off to jay powell? >> certainly he would like to blame powell if things don't go well but i actually think there are worse things for a president to focus on than the stock market. it is not always a perfect real time indicator of the underlying economy, but long term i think it does tell you something about the value and vibrancy of the u.s. economy. blake: james freeman of "the wall street journal," james, thanks for joining us.

appreciate it. again merry christmas. hope you had a good one. >> thanks, blake, you too. blake: the nasdaq still solidly in bear market territory despite the bounceback so far. but is the market really an indicator of our economic strength. to market watcher richard leone and "fbn:am" host lauren simonetti. it is good to be here in new york. they have the lights, the trees. i saw you shaking your head when you talk about the president giving out market advice? >> he seems, he views the stock market as a gauge of his popularity. so when it comes down, the market averages are off 15% in the month of december and you've got the dow and s&p, more so the s&p teetering on bear market in territory and the nasdaq in bear market territory you somewhat have to take credit on the way down too but he is passing blame on to fed chair jay powell. blake: richard, you're somewhat of a bull going forward here?

>> i am. looking into the underlying economy in 2019 i think it is very healthy. we can't forget the consumer 2/3 of the u.s. economy. the consumer has two big tailwinds now. the first is low energy prices and secondly supportive labor market which we think will drive consumer spending well into 2019. blake: we're seeing some with the christmas sales. christmas sales are up. >> issue for wall street they're trying to predict the future. if you look at the present, everything is fine. we also shop on our phones and online. that is happening but we're actually going to the stores as well. traffic is up. the economy at present is fine. wall street is worried about trying to predict a slowdown that may or may not happen in the future this is very long bull market over nine years now. the nasdaq is up 388% since march of 2009. so you have to let some air out. arguably that is what is happening right now. although it does feel a little bit oversold. >> i think that is exactly

right. we also have earnings expected to grow 7% in 2019 coming off a really big year in 2018. interest rates are still at historic lows and previousing neutral. fed secretary made clear he will react to market data, take an overall approach. they will not just raise rates blindly and another factor the selloff we've seen in the market i think will make it difficult for two things. further difficult to get embroiled in a trade war and harder to raise rates quickly. blake: the president said he would take china head on. why would it sort of, would the markets slow him back because he is insist extent and adamant about this on china? >> i think it falls back, coming into the elections in two years he certainly doesn't want the markets to react the last couple months. blake: the dow is down 19% from its high, s&p, down 20%.

but they're all up triple since the crash? what a way to look at it, down from the high or triple? if you've been somewhat over the last decade or so you're doing pretty well? >> you can follow the president's remark or suspend financial advice and buy everything, buy low. this is an interesting time of year also on the calendar. this is the final week of the year. so many folks are already away. they have closed their books. but it is also the time of the year, maybe volume is low but you do have the santa claus, that historic rally, end of the year does go a little bit into the new year. for that not to happen would be unusual. having said that this has been an unusual year. stocks just went on sale for a lot of people looking to buy. blake: absolutely. >> fundamentals of the economy is absolutely strong. the segment is about the nasdaq, right? about the tech-heavy thoughts i'm curious for your thoughts on this for 2019. a lot of major companies, unicorns, came from the

financial crisis, whether uber or lyft or pinterest, they might make their stock market debuts in 2019. i'm not sure if this volatility and downturn continues if they would be able to do that? >> i think that is possible. you could see a hold on some of those debuts n terms of technology companies i like blue chip names with valuation support going forward. blake: which ones? >> like adobe and microsoft. >> looking at the "fang" stocks, microsoft is the only one not in bear market territory and the others have come down so tremendously because they had a nice run to the upside. blake: 2019 looks like what, do you think? >> i think 2019 looks okay. i think we'll see increase in equities. we'll see -- we have a 3200 price target on the s&p. the economy stays the way it is i think we'll be okay. blake: lauren? >> i don't think there is the "r" word on the horizon. i think the market is trying to

talk itself into there being a recession. i don't see it. but again you don't usually see these things ahead of time. they kind of just happen but there will be a slowdown. how big, i don't think it will be too much to worry about. >> i think that's correct. none of the traditional factors indicating a recession are present right now. blake: we'll see what happens. richard, lauren. great to be here in new york to see you both in person. meantime, speak of next year, there might be the whole government shut down thing. it is happening right now, day five. we'll see how long it goes. democrats hold the majority in the house in 2019. that plays into all of this. one key republican lawmaker will give us his input coming up next on "cavuto: coast to coast." jardiance asked:

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blake: the movement continues and it is a pretty positive day down at the corner of wall and broad. looking what is going on with the markets, the dow jones close to session highs at about 450 points. actually during the commercial break it actually hit a little bit over 500 points. we started about 15 minutes ago it was at three something. so pretty good movement here. retail sales numbers during christmas, potentially one of the catalysts fueling this. the christmas eve selloff was

historically bad, the worst christmas eve ever. maybe getting some gain as we close out the new year with a couple trading days left on the session. by the way there is this government shutdown as you know. day five of the partial government shut down and really no end in sight. could be days, could be weeks, could this potentially be months we're at stalemate in washington? to house budget committee vice-chair todd rokita. what happens if he doesn't get the money, meaning president trump, before democrats take over. thanks for joining us. merry christmas to you. >> merry christmas, blake. i have to tell you we have to be cognizant what a nancy pelosi house could mean for this country. of course under the constitution the house, all spending bills must start in the house. they control the purse strings. so this funding bill that is on the table right now doesn't survive the congress it has to stop. nancy then would kick this off

again. if you just look what their platform has been, everything for everybody for free, i mean there is a bill out there that, from wants to give everybody a job, just because. blake: congressman, you talk about nancy pelosi's house what it might look like, now it is still technically paul ryan's kevin mccarthy's house and still there isn't any sort of compromise. so what's next? >> well i think there has been compromise, first of all. we're asking for $5 billion. by the way conservatives in the house that really hauled this to donald trump's attention, hey, don't get this past. the people fav as you mandate to get this done. you gave us a campaign promise. he is staying in washington to get this done. despite our leadership, despite the democrats, we are holding, we are heading steadfast and we're being honest brokers with

the american people because that's what they want. everywhere i go in indiana, everyone sees common sense of having a border wall and how effective that is. blake: you mentioned the $5 billion, president trump and the white house have apparently come off that. so long as democrats would raise their money, 1.3, 1.6 billion, whatever you read or whatever the moment is at the time. would you be okay if there is some sort of compromise that is less than $5 billion and maybe very little or none at all for the wall? >> yeah. i got to tell you, blake, you're bringing up a good point. so on the budget committee we deal with frankly trillions of dollars. billions are a lot of money, that's for sure, that is a lot of money to talk about, but in the scheme of things that is a blip on the radar. the idea that the democrats are quibbling over budgetary terms such a small amount of money, they spend like drunken sailors any way, really shows they're playing with politics here.

to your question, would i settle at this point for something less, i want to stand pat for $5 billion, but at the end of the day if it builds more wall, we should absolutely take it. blake: what if there is a short-term deal? what if we get into january or february and there is just some sort of short-term deal to get these federal workers back on the jobs and get their paychecks back in their bank accounts, would you take that? >> i'll tell you what? federal workers are frankly least of my concern for a couple reasons. first of all -- blake: i have got to imagine those federal workers though, it's a big concern for them. they have got families. they have got wife, kids paychecks. >> it may be, you know what? the sovereignty of this country dwarfs them, frankly. and frankly 80% of the federal government is open, is working. so no, the decisions i make and decisions we should make shouldn't rely on whether or not 25% of the workforce is getting paid because they will get paid

eventually. they always do. but really, it is really about the sovereignty of this nation, blake. and whether or not we're going to be for the rule of law or whether we're not going to be. that is what the issue is. blake: how many of your colleagues do you think are along the same line that if it means going weeks into months, they would be okay with it, even if it means 800,000 or so of these workers deferring their paychecks? >> you know, i think the house stays strong. the house is flipping in a couple, in a couple days but really, blake, we have to worry about is the senate and even republicans in the senate, they seem to change their minds a lot, a lot more easily than house members do. that is my main concern because even in the new congress, you're going to have larger majority of republicans, all that needs to flip in terms of republicans is about seven. you can, and nancy can get any

spending bill she wants with seven republican senators change their mind next term. blake: congressman todd rokita, we got to believe it -- leave it , thanks for joining us on this christmas break. maybe you head back to d.c. with someof your colleagues. if not we'll see you in the next congress. thank you, sir. >> thank you, sir. blake: keeping an eye on the big board. the dow settling in up a little bit over 400 bucks or so it was a nice rally. at one point it was in the red. after the christmas eve selloff, a good day at the corner of wall and broad. up 2%. more "coast to coast" after this that you can use up until your trip starts. so whether you want to go out, stay in, or be in the middle of it all... add the perfect hotel when you're ready, and save.

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fears a slowdown could be coming or we're in the middle of one. mcdonalds, starbucks, nike, target, consumer discretionary staples. tech sector doing pretty good too. one of the possible drivers of this, been a pretty good couple weeks, month as well, relates to christmas sales. doing better than they have in many, many years past. mastercard senior advisor, former saks chairman and ceo steve sato. thanks for joining us. merry christmas. >> merry christmas. nice to be here. blake: i look the backdrop. you're in miami. it is warm and sunny. you have to have good feeling when you see number come in on consumer spending? >> very wealthy consumer numbers. we reported mastercard spending plus numbers plus 5.1% through december 24th. that tells us the consumer is out there and they're shopping.

that represents the 2/3 of the u.s. economy and we feel it's a good holiday season. blake: let me tick through the numbers. $850 billion spending november essentially through christmas. online shopping up 19% during that same time frame. >> yep. blake: sales at department stores fell 1.3%. brick-and-mortar up towards 3%. appears online sales are driving a lot of this? >> i think it is brick-and-mortar and online. brick-and-mortar up 3.3%, online up 19%. this is in line with the mastercard forecast but saying consumer is shopping in a omni channel manner. they want the product anywhere at anytime they want to get it. they may buy online or pick up in a store. mobile phones are affecting 80% of the purchases this is absolutely a online season. brick and mortgage at that are 80% of shopping.

don't forget about that as well. blake: retailers, clothing departments, moved to this model, where, for example, she may be said i want this, this and that. got it at the front so you can go in and hopefully buy there. concept of pick it out online and go pick it up to save on potentially on shipping. is this maybe one of the new ways going forward for these companies, to drive online traffic, but also get people in the door? >> absolutely. in fact when they go in the store to pick it up, they often types buy more product. there is multiplier on it. i call it omni channel environment. it is not just about the internet and the stores. what is complicated about retail, you have to have a great-looking store, create a great experience for the customer but also a great on-line experience and amazon represents the standard. amazon represents half internet sales. if you don't have experience in terms of amazon, easing shopping

the way the product looks, then you're not going to win. blake: steve, we appreciate it. enjoy miami. enjoy south florida. merry christmas to you. thank you, sir. >> okay, thank you. blake: want to take you to the floor of the new york stock exchange. it has been a pretty good day on corner of wall and broad down there. up 450 points on the dow. we want to get to peter tuckman on the floor. peter what is your take right now? >> the market is reacting to a different narrative the press and yaw are putting out. it was a fragile narrative about the fed and powell and all that and now we're talking about retail, and retail looks positive. the market is oversold in a lot of cases. right now people are trying to find a reason to buy this market down 5,000 points, right? the worst december since 1931. the worst month since '08. people are looking to buy. they have their shopping list out. you guys are spinning a great

story about retail brick-and-mortar, amazon up, and this is reason to buy the markets. sellers were here and that was the reasoning. right now feels like a buyer's market. blake: last four days leading into this, especially christmas eve were not good. do you think at least some of the fear is set aside because of the consumer spending numbers? >> you know, i don't really know. i think it is headline driven. i'm watching the market while i'm watching the news. we really started the market up and market was strong. we were up 300. on a whim, on a moment, the thing sold down 200, 300 points. i think we need to realize we're in sort of a new rule mode. a 400-point move is like a old 40-point move f we react to numbers in a big way we're just going to get scared. >> what about that? that is a complaint of treasury secretary steve mnuchin publicly over the last week or so, computers are just sort of moving everything?

if he had his way it wouldn't be so? >> well you know i think there is a problem. he is a between a rock and a hard place as far as his combative behavior with the president, what not. markets are being run by a lot of computers in a lot of ways and their algorithm ares and individuals are hitting buttons with a market where there is not a lot of liquidity and there is a lot of volatility. look at today, it is 12:00, the market had almost 1000 point reverse al. we're in a go solid move, we should stay with it. blake: what keeps us staying here? >> say that again? >> what keeps us staying here at this level and moving up. >> hard to know. i thought the market rally would sustain itself. it sold off hard now i don't know if the pain is over. people are positioning into the end of the year. a lot of people gave back a lot

of their profits. right now there are some bargain hunters out there. and there are people that say they need to get out because of tax selling. you have two narratives and dialogues. the market could go either way into the end of the year. blake: the dow up a little bit over 400. >> hold on to positivity of up 500 market. look for santa claus for the last few days. blake: sounds good. peter tuckman on the floor. >> thanks. blake: oil by the way up over 7% today. it has been at 17-month lows. trading a little bit over 45.40. more "cavuto: coast to coast". about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

blake: got a market rally going on, that includes oil up over to $45 a barrel. 7% gain from the day, clawing back from a seven teen-month low

we have alan knuckman on how long this slump in prices might last. hey there, alan, what's your take? >> if you look at oil, we've been trading essentially between 40 and 60, 2015, 2016, 2017. today this year was outlyer when it broke to the upside. back to a more normal range. you talk about holiday travel, i was able to get gas less than two dollars a gallon. that makes me feel good. makes a lot of consumers happy at the pump. this bounce is just beginning. it is across to asset classes. we have to hold gains. we have been down this road before, we had a little bit of a burst, every time the sellers come back in to take control once again. blake: you say this year is somewhat of an outlier. what do you think 2019 look like? >> i think we'll get back to normalization, that 50 range. we're overdone in asset classes, not just crude oil. part of that component and equation is the dollar. is the dollar done?

look at interest rates, there will be no rate hikes in 2019. if there are no rate hikes, that doesn't strengthen the dollar. if the dollar doesn't strengthen, that could be a pause for a lot of asset classes and that could spill loafer to crude oil. at some point there is value there and it has been in such as extreme decline. >> what about what the president said with opec and route the saudis and russians have been taking or might be taking? will that have any effect at all? >> it has been more confusing. we have less certainty this year than anytime in the my career. it is politics, opec, there are some moving pieces. market wants certainty to forecast prices to see where we can be in the future so businesses can run more efficiently. that is the big wild card. i think things got overdone to the downside. that sentiment shift was so dramatic which could see a little bit of health with people find some stability here. we need stability on a lot of

fronts. the markets can get back to their gains. blake: i ask you this as a father of two young kid in which flying ace pain, i learned driving, taking a road trip might be a whole lot easier. if oil settles in the mid 50s norfolks who drive across the country that would mean gas at what, roughly? >> you would see gas top out at 2.40, $2.50 a gallon. not looking for anytime at 4.50 anytime soon. if you think about it, 50 cents per kang in gallon, doesn't add that much in dollar terms but hurts psychologically when you have to pay more for a commodity, that you have to utilize each and every week obviously. blake: alan, thank you very much. >> a road trip away. blake: a road trip away. all right. i will let you change the diapers if you want to come on with. see you, alan. appreciate it. we're seeing a rally today. but one of the looming questions over all of this is china and

trade, potentially a long-term trade war. there is this, i guess march 1st, whatever you want to peg the day to, 90-day window. many wonder could that shake up everything in 2019, like it shook up the market towards the end of 2018? here is "market watchers," dr barton. i will start with you. if there is any trade movement could that be potentially the story of the year? >> that is already baked in at the cake at this point. think about it, the trade talks with china didn't keep us from getting 26,951 for pete's sake. i don't think it has that much of an impact on the market. i think politics right now and the slowdown globally, internationally is more weighing on the market than currently china. blake: dr, your take? >> well i think i might take the other side of that from craig because i do believe i agree

with him, that we got to those highs while we were doing all of this trade talk stuff and then the pullback really didn't have as much to do with that as i think it does the uncertainty, political uncertainty that craig mentioned in the white house. and of course you know the fed taking away, pulling away the punchbowl. so i think if we did get some significant movement to make this look more like a longer-term, freer trade agreement we got some move on intellectual property and that we could reduce these tariffs and take a bunch of them away, i think that would have a big first half impact. blake: craig, there are some who feel, if you simply go back to the tariff man tweet from the president, there has been a decline in the market since then, and that has a lot to do with it? >> i think that has some to do with it but i think dr is right, and i would like to hit on this, because i think it is important. i think the issue is what the fed is doing with the balance sheet.

i happen to believe the fed is trying to reduce the balance sheet too quickly. they started in july. just 8% reduction in the balance sheet cost us 4,000 point selloff in the dow. i'm more concerned about what the fed is doing right now than china. i agree with dr, to the extent if we get a good agreement, it will be the story of 2019. he is absolutely right. blake: what would the market look like if there is some sort of a framework? i don't think anyone is expecting even if there is an agreement some massive, multipage, bullet sheet, sort of this is what is agreed upon. it would be more so a few major components, potentially some good feelings on both sides but if there is an agreement, what do you think the market would look like then? >> well i think the market will respond favorably, there is no doubt about it but i think the market needs time to consolidate here, blake. look, we went up pretty quick. and along the way i could argue these lower interest rate

environments, artificially lower interest rate environments created some bubbles along the way. i think the bubbles need to be popped on way down. i think the market is looking pretty good. short term i would be like your reporter talked about, about the currencies. watch the dollar, watch the yuan, that will tell you the story. blake: dr, the other side of the coin, other side of the question what if there is no deal march 1st? >> with no deal the market has over time, craig alluded to this, every time we got tariff news right up until your point, tariff man tweet, every time bad news would go down a percent or two, and then pop up on negative tariff news. that is because i think the market believed this was just a long-term negotiating strategy by trump and the administration to get some movement by china. if we don't get that, i think

this bear market turns into a longer-term, much more egregious bear market. blake: craig, when we get into earnings season here when we turn the calendar, do you think the market and economy might hang on every sort of tariff headline or potential interest rate hike or might we get a earnings season and things will settle off? >> depends upon the company you're talking about. if you look at multinationals, for example, bmw, i think germany is really sputtering right now. bmw, their profits are down 24% recently. talking about domestic companies, i think domestic companies do relatively well in 2019. i'm more concerned about a global slowdown right now. seven out of last 10 months, industrial production was down globally. look at china, lowest retail sales in 15 years. i just mentioned bmw. i think we need to focus on international companies that will have a big pull on the

marquette overall. blake: thank you guys. thank you, dr bart tan for coming in. >> thanks, blake. blake: speaking of the year, couple days left in the trading year. good day so far heading into last four trading days of the year. nasdaq is up 3%. tech leading this rally. more coast to coast coming up after the break. ♪ there's no place like home for the holidays ♪

♪ 'cause no matter how far away you roam ♪ ♪ if you want to be happy in a million ways ♪ ♪ for the holidays you can't beat home sweet home ♪

blake: during our first commercial break at 12:15 the dow hit 500 plus. here we are half an hour later the dow around that mark, up 515 points, up 2 1/3%. nasdaq up better than 3% right now. tech, consumer staples, driving part of this market today, good day after the massive christmas eve selloff. also had some reporting today from the housing industries. case-shiller reporting home price increases slowing for a 7th straight month, with interest rates rising so what is the state of housing going forward? one of the big questions heading into 2019, to national housing council ceo, david dworkin. >> hi, blake. blake: tie looks great. you can let them know. as we go into 2019 here.

there are a couple ways to read this. one there is some sort of a slowing. year-over-year gains are 5%. i think most homeowner will take that? >> absolutely. we have to look at this into perspective. overall the housing markets will go up and down. homes are not equities. people don't buy and sell them like stocks. so when housing prices go down a little bit, it has a mild effect on the wealth perception but overall i think it's, we're in pretty good shape. we want to really see housing prices level off because they have gone up so much recently, and, a lot of people can't afford to buy a home and we need them to be able to do that. blake: level off might happen and is happening because of rate increases. i'm not sure you would be one to champion rate increases, is that side effect in a way a net positive then? >> i mean rate increases are a

small factor. certainly, we want to insure, housers hate rate increases but we hate recessions even more. i want the fed to have enough bullets in their gun, if we get into a recession they can give the economy some boost. much more important the fact we're not building enough affordable homes. blake: right. >> even though we have the best job market for millenials ever, certainly in my lifetime, we've got one in six people, age 25 to 35, living at home with their parents. i suspect they're not real happy about that. and the parents are not either. blake: seems like a tale of two coasts right now. if you look at housing price increases on the west coast, seattle, phoenix, san francisco, all above 7%. las vegas is near a 13% year-over-year. when you come over here to the east coast, washington is just under 3%. new york at 3%. miami and boston hovering around

5%. what is going on seems like you got two different stories on two different coasts right now? >> the law of supply and demand is never repealed. so we just not built enough housing on the west coast. we need a lot more. on the east coast i think it has been more in line but there are pockets where we got a problem. in some industrial cities, we have too many homes still, and that made housing appreciation more modest in the wake of the crisis and more severe during the bubble. blake: speaking of the west coast what is going on in seattle? because the last two months have seen 1% plus decreases. we've seen amazon announce that they're coming over here to the east coast. does that have anything to do with it? on its face, to see a percentage decline a month, and then the next month seems problematic? >> i think there is some timing there but for amazon their big problem it is just hard to hire more workers in seattle in

seattle because prices are so high. they are coming off the peaks because nobody can afford the prices being charged. in markets where amazon is moving too, you're likely to see effect. 25,000 jobs in new york and washington each, are real increases. but in seattle, we still have a major crisis of affordable housing. you know the homeless population in seattle has grown at record levels in the last few years. there are just not enough places to live that people can afford. blake: david dworkin, ceo of the national housing conference. thanks for coming in. appreciate it. >> thanks for have me. merry christmas. blake: housing and health care is another issue at the top of minds for consumers. they may spend a lot more on the health care in the new year as major pharmaceutical companies plan to raise drug prices. we heard this before. and it might be happening again. to dr. kevin campbell on what we all can expect.

hi, doctor, thanks for coming in. >> good morning. merry christmas to you. blake: merry christmas to you. we're spend a whole lot more on drugs in the 2019? >> the pharmaceutical industry will raise prices to whatever levels the market can support and all patients are going to suffer. blake: reuters say 30 drugmakers will raise prices in 2019. if so will that just touch about everyone? >> i think it does. look at simple drugs, insulin, not very expensive to make, yet we've seen the price of insulin quadruple the last year. which leaves many diabetics at risk not getting the drugs they need to live. we see this over and over again. with diabetes drugs, heart drugs, drugs for blood pressure. if we don't do something to stop this behavior by the pharmaceutical industry. a lot of non-compliant patients

will not afford their medicines and we'll have complications from easily treatable diseases. blake: president trump tried to tackle the issue. many said they would stop price increases this year. appears they will hike it in 2019. play some sound of president trump and his stance. i will get your reaction on the other side. watch here. >> lower the drug prices. competition is the key to lower drug prices. we have competition, but a lot of time the competition dissipates. i will oppose anything that makes it harder, for smaller, younger companies to bring in a product to vibrantly competitive market that includes price fixing by the biggest dog in the market, medicare which is what is happening. blake: that is week two of the trump administration. how has he fared? >> i think it was a lot of momentum going forward but we really haven't gotten anywhere with that. the issues at hand are the fact that you allow big pharma to kind of squeeze out generic

competitors through manipulations of patent law and other things like that. in addition the fda process is a very expensive process to get a drug through. thankfully the scott gottlieb, the commissioner of the fda is doing a lot of great things to make this an easier process to get through. we have to get away from three people making insulin and only one or two companies are making another drug. these companies are suing one another to prevent them making generics. ultimately their wallets get fat and our patients miss the drugs they need. blake: not just president talking about this. democrats up on capitol hill will have half of control of congress have put out a host of ideas. senators, harris, merkley, klobuchar, wants to allow dhs to review and reject drug prices that are unreasonable. elizabeth warren says the government should manufacture drugs and sell them at lower prices if there is not enough competition.

do you think any of these ideas get through? >> i don't see anything getting through where the government is making drugs and the government is distributing drugs. that would be an absolute failure. if you look at va system and va hospital the managed by the federal government there is lots of problems. we need drug transparency. we need to make sure that the u.s. isn't bearing the full burden of research and development costs for the world. we need to share that with other developed countries. blake: dr. kevin campbell. have to leave it. there we leave it as well as we come back for another hour of "coast to coast" with a surging stock market. the dow is up over 500, 2 1/2%. another hour. stay with us. 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?"

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>> that tommy beyers two hours of the show. america is a rite now i'm continuing to the dow up about 550 points, two points at%. steady climb over the last 10, 15 minutes or so. i am blake burman in for neil cavuto. neil cavuto. tact and discretion are investors digesting good holiday sales and may be seen as a president trump said yesterday as a buying opportunity. live on the floor of the new york stock exchange. take a moment. reporter: nice to see you in the chair. i'm talking to the traitors around me and it seems to be a slow day, lower volume, whatever you want to call it. headlines are moving market with retail sales coming out.

amazon doing really well. that is adding to the pickup that some wealthy investment saying we are close to the bottom. you are seeing the dow up in the positive 517 points higher and the s&p 500. you mention you're seeing the technology is one of the major leaders as well. s&p 500, all 11 sectors in the green. let's take a look at some of those winners for now. on the dow you've got on the screen nike coming higher after a selloff. a massive selloff on monday. earnings came out on friday. really, really strong numbers. a stronger average sales and there was a selloff on monday. this is a natural uptick. home depot, wal-mart doing very well. retail oriented because we see so many strong numbers coming out there.

a highlight with the energy sector and energy stocks climbing higher. the reason being oil is higher. it had a $75 high end to this point now, look at back from a 45. definitely a lower trailing oil with a drop of 44% with the over so territory. putting forth another meeting to talk about production. some of the markets we are seeing today. there are of course still concerns of the economic slowdown potentially on the horizon. mercator senior research fellow kidney crochet and chief editor going home. hello to you both. how are you doing? i'll start with you.

does today at all since those fears aside or it's very much real the horizon? we've seen lately the market is moving on everything up or down. we may have seen a bit of overselling so to speak. we have some good numbers in terms of retail sales and i would say it's all about the consumer going forward. tree into it was pretty remarkable to hear the president say there was a buying opportunity. was he right when he said by the death essentially? >> you want to buy when prices are low. it makes a lot of sense and you can feel the businessman in him. that being said, i don't know that is the appropriate job for the president to give investment advice. blake: what about headwinds in 2019. what do you see? china trade, more rate hikes for you? >> again, and it is one of the

things that people tend to forget that investors in the short term seems to be very emotional. a lot of up and down and so the market is very emotional on the short-term. and in the long term based on performance. there's a time of uncertainty because of trade and we never know how the president is going to react. there's a lot of uncertainty because the bright day. i believe the shortages. there's a lot of things the democrats are taking over. there's a ton of uncertainty and until that is resolved, we should be seen more of these hyper fluctuation. but the market is not the economy. it doesn't tell you whether we are heading towards a recession. important to remember the market predicted nine of the last five recessions. overshot all the time.

we should not read too much into short-term fluctuation. >> they argued we are on pace for 3% plus growth this year. kevin hassett said maybe 3% in q4 because of good holiday sales they feel they could hit that mark in 2019 as well. the market isn't the economy. as the economy unstable footing as the trump white house sees it? >> there's a lot of expectation that this may be winding down. it means many are expecting a slowdown in the economy and novel way on the market then that is one of the fears driving the volatility at the moment. what we are watching for signs that consumers will be spending less. markets will be very jittery and every signal that anything will provide a headwind and more excited about something that suggested the growth cycle could be elongated.

blake: you talk about fear. once that happens there could be a snowball effect. where are we along the line of a potential's no ball effect or we not even there yet? >> i think the cycles are hard to predict these days because of the power of the president streets. the uncertainty about trade battles with china or where fed goes with rates. move markets up and down. >> can i add something? blake: sure, real quick. the tax reform is doing a lot of things in terms of capital expenses and higher product davidian wages going forward. high spending and high debt. this will have a high market in the long run. and that's the performance of the economy. blake: thank you both for coming in today. appreciate it. the president still hitting the fed by his top economic adviser kevin hassett explains why rate

hikes can be a drag on the economy. they also signal economic strength. listen here. >> you've got opinions about the fed. the president's perspective because they think the economy is really solid. it's confirmed in the data appear to talk to the president every day about what's in the data. secretary mnuchin was calling around to the banks the other day. we are looking at probably the best christmas ever. >> the former special assistant in the vice president, mike pence. mark potter joining us today. good to see you. so you heard to have been president's comments. why is he -- it's an argument the president can make. but what if they talk about the fed to begin with? >> this is not the first president to have issues with the fed. we can go back to ever president of both political parties always wishing the quote was to prime

the pump back in george w. bush's tenure. this is a president who doesn't believe in paying things in the office. he wants the american people to know he's fighting for them and he wants economy to continue growing. >> you were there in the white house when the stock market was running up in the white house would constantly talk about the market run-up. some advice and at that point don't do that because when it goes up you've got on that when it comes down. does this white house need to own it now? >> as your previous guests were talking about, the fundamentals of the economy are unchanged and very strong. we see a record number of jobs being created. more people working than ever before in paychecks going up which is the biggest thing in a big driver of the economic gains we see in the future. while the stock market doesn't like uncertainty, they don't like questions, that's why a lot of presidents haven't unnecessary things in the past.

they didn't want to take the political heat is being wall street or public opinion polls going down. this is a president whether it's on trade are getting a fair deal with some of our partners even including places like china. he's going to take the long-term path to success even if there might be some short-term losses that the economy in the market are going to come back. >> let me ask you because your communications specialist in the white house as someone in that role to the vice president. does steve mnuchin's phone call in which the treasury department then revealed the treasury secretary had called the ceo of the six largest banks to check in on liquidity and then they put up a news release on sunday seen everything is all good. was that a smart idea to release that because it seems to have backfired. >> well, you might have backfired in certain circles, but the key is what was the audience and who was the

audience the secretary was trying to communicate to. there are areas and some economists to worry about liquidity issues. some who had been raising questions privately. this is sending a strong signal to that intended audience while it may have caused some uncertainty on the market and with others, the intended audience got the message that liquidity is strong and it's not going to be something that's an issue going forward. blake: i'm going to make a hard u-turn here but since you been in the administration, the other big story of the shutdown you think that is one. >> i'm not exactly sure. the president is committed to border security. democrats seem to be entrenched on blocking any kind of border security measure. i hope they will find a place in the middle probably in the next few weeks. once nancy pelosi gets the speaker's gavel, all bets are off because she could rewrite those appropriations bills. throwing a lot more welfare spending and send it over to the

president saying that will be something that will have to sweeten the pot. turning to maybe that's where this is headed. mark potter, thank you am appreciated. best to you and your family. ten-year treasury rising out stocks extend gains. the market now hovering at around 500 level, the dow up two and a quarter. the nasdaq having a great deal as well. "cavuto: coast-to-coast," more of it. stay with us.

blake: investors watching a bunch of things. that includes the government shut down in day five elites were today the market showed him that i've printed out 2% just a hair under the 415. up high at about 54550 or so a little while ago. either way a good day on the corner as we do continue to keep our eye on capitol hill and the possible development they are. no one knows that area better than the senior capitol hill producer chat program and he joins us on the phone. hi, chad. >> there is a lack of urgency dues settled the shutdown even though this is the first full day for the workforce and the lights went out just after midnight early saturday morning.

the house and senate meet on pro forma sessions thursday afternoon at 4:00 p.m. eastern time with no legislative business. this is the gavel in the gavel out. the constitutional requirement of the house and senate meet in every three days. there were spot on saturday that perhaps they could get a tentative agreement and have members returned to vote on the plan but any chance of that is now pretty slim. no indication that officials even negotiate. >> the bottom line with this is some sort of meetings on capitol hill tomorrow. nothing is going to move. we are likely to head into 2019 with the partial government shutdown of which points they will control the house. >> that's right. the only reason there could be some movement is the fact the shutdown has now rested passing gives us the impetus to move. everyone has kind of result. the president wants a border wall.

and until some big moves, we don't expect any action on capitol hill. blake: here is what is sort of unnerving a little bit. it feels like we're past the point they were talking about maybe this will only be hours as the shutdown or maybe this will only be days that addition down. it is now to the point where it feels like we are talking about weeks and maybe even potentially months. or am i too far ahead of myself? >> in the fall of 1995 come in the standoff between newt gingrich, speaker of the house and bill clinton had multi-standoff that lasted between early october of 95 and january of 1996. what resolves these and i always go back to this from the late british prime minister who says those are the most important factors in politics. we've seen in previous instances where they put end to government shutdowns. you could imagine a tremendous market shock for something like

that. >> let's hope it doesn't get to that point. i think you might have today off. enjoy it, chad pergram. weeks or months for you. if president trump doesn't get the wall that's at the heart of all of those, will this become a broken promise like bush 41 on raising taxes. media breaking news editor, amber, ascii. >> hi, blake. thank you for having me. i'm sure you remember the campaign. not necessarily build that steel flat. it seems that the president is changing its tune here as he realizes there might be some leverage lost as we head into 2019. >> that's exactly right. unfortunately, that's going to do some real damage to trumps days who many of those people voted for the president because they wanted this border wall. you watch just about any campaign rally to hear the chant buildout wall. the president has backed himself

into a corner because the senate has made clear they're not going to pass anything close to what the president wants at 527 billion for border while funding. once democrats take over the house he's lost even more leverage because they're going to end up giving him much less than what he would've gotten two weeks ago which is probably about $2 billion. blake: nancy pelosi and chuck schumer and the white house two weeks ago now. the president said afterwards it was an impromptu moment in which he said if the government shut down. you think you regret saying that and it looks like this could go to day 15 or day 25 potentially? >> you probably should. once democrats take control of the house, we are looking at a standoff for weeks, months. as that drags on the president will look more and more culpable for that. granted it's only a partial government shutdown. much worse things in the past and the government shut down pretty much all the time for basically every year.

but when the president chose -- blake: there was a shorter one earlier this year. this is not going to be sure to scenes and it's very much indeed over christmas in the new year. >> exactly. the length is where it's going i'm the president and he has to realize he can't keep this going through 2020 and not expect to have big political consequences. if the president doesn't get his border wall, then he's going to run in 2020 on the same message that he did in 2016 getting border while funding. that's not going to resonate while considering he has two years of the republican-controlled congress congress and was unable to get it done. blake: we didn't get into who's going to pay for mexico thing with the back-and-forth with congress right now at the white house says the usmc will pay for it. >> now we are looking at a go fund the campaign. blake: thank you for coming in. appreciate it. continuing to keep her in the

markets. the data of about 380. oil up 7% today. what that means for gas prices next. 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.

blake: oil prices rising from a 17 month low. done about 45 bucks a gallon. at $3 on the day. more than 7% for the day. growth fears are still looming. fox business jeff flock and fox news contributor phil flynn. what do you guys together they are. christmas spirit, hanging out smiles. >> nice to see they released you from your captivity at the white house. they are still in captivity here. i want to get to that in a minute. that's why weren't soybean. the first, oil. a huge run-up today. what is that about after this huge selloff on monday? >> common sense coming back to the market. last week fell off the christmas

eve massacre probably was way overdone. now we are hearing from question to opec that they don't want this to continue. and all the sudden a stock market at oil by my crazy. >> were people freaked out they didn't like those over the holiday? going into the market that closes prior to the holiday were so weak and people were worried about a black monday. and they really sold the market off on my volume late in the day. when you get that late in the day selloff likely haven't christmas eve, lot of time that could be capitulation in today's big rally today could be the bottom. blake: to say it's quiet over here may be a bit of an understatement. this is what happened when china doesn't buy any beans. that is what we learned as china bought absolutely no beans in november. >> i was a signal to the u.s. farmers. most of the traders thought

they'd have to buy beans from the u.s. they're being a little bit cagey right now. they are seeing that as a bumper crop. even though they're making purchases now, the traders are saying it is not a big enough amount to move the needle on supply. >> come over here if you can. these are the bean oil traders. there you go. they say until there is a deal with china, pretty much this market is cooked. >> volatility he was telling us at an all-time low. interest in the u.s. market is nil. he is saying make american soybeans great again. they want and make it exciting here. >> both of these issues i think oil and being go to the president. because the economy is strong. we've had a great retail sales. we were in the shopping center on monday.

you know, huge christmas. so is it the uncertainty about washington right now? all that stuff. >> it is. i've never seen more of a disconnect from the economy and what's happening in the price of oil in the price of beans. usually they go hand-in-hand. if the economy is doing good, oil prices are doing good, the economy is doing bad. we have this disconnect right now not because of what's happening today. they are fearful of what will happen tomorrow and utterly crushing prices. reporter: it's interesting, blake. it does have an impact on what happens out here on main street if you will. the unsettled nature of what goes on in washington. get back there and straighten them out soon. >> this is my favorite site when of the day. i just ordered a turkey sandwich. otherwise, check in. we can do this all show if you want. >> we are talking about dean's.

didn't put you to sleep. thanks, guys. appreciate it. jeff flock, best in the business. something we've been keeping our eye on over the last week or so here. that is serious in the decision from president trump to pull back from syria leaving even in a state of uncertainty. the retired u.s. army the tenant colonel danny davis on what this means for syria in the future. hello, thanks for joining us. >> good to be here. thanks for having me. would you make of this decision by the president? >> a bit of an outlier because this is a great idea. he should've done this back in march when he first said he was going to. here's the thing that most people are missing. people like lindsey graham and some of these other senators talking about gloom and doom. the fact is those troops on the ground are not accomplishing anything of subs and for the united states in their

withdrawal won't cause any harm to it. >> some people might object to that by saying there is a major need to take the fight to isis in the middle east and to help forces there within the area to fight back. isn't that the substance there? >> whether somebody thinks that's what we ought to do, the fact of the matter is those troops on the ground are not doing much at all. who is up to the latest assyrian democratic forces. i assure you they have been doing a great job on the road and they'll continue to do it whether we are there or not. it's important to point out the russians are against isis piercy area is against isis. everybody up there against isis. it does not mean they are going away. blake: you're comfortable turning things over to russia. >> it's the fact that our troops right now i'm not accomplishing that kind of thing.

they are doing very little there but taking an enormous risk because we could clash one day with russia and you could escalate into who knows what. >> we've been there in russia's been there there haven't been any cautious so far. >> we actually had a clash with russian mercenaries. two months ago the russian government itself that were going in this area where your troops are and they warned us to stay away. it was volatile. people don't think much about that. that is a risk that does not help us and we need to get our troops out of there. >> some of the criticism against president trump has come from republicans who have said, look, this is a president obama did in the middle east, withdrew and then isis formed as a result of it. you're not worried that a withdrawal could lead to another surge from iss? >> those situations are radically different. there's a situation in iraq

where we were aligned with the government and then we got the violence down and then our troops withdrew. we were supposed to be there to give breathing space for political reconciliation. what we provided to the mlicki were shameless an opportunity to get rid of political opponents and that's what led to the rise of isis. it's what they did on the ground. in this case we are not aligned with the government on the ground there in opposition to a then there's a civil war go in there. our troops do not to be in the middle of another country's civil war. >> the decision has been made so let the debate aside. now the u.s. troops are coming home what happens inside the area in your estimation? >> there's likely going to be some jockeying back and forth he does it made some people concerned maybe they would take action. it's likely to get chaotic for a while. the fact remains there still a civil war there. if anyone thinks this is from iran to russia, they don't want

to be responsible for paying all the stuff going on and they don't want to go have to go for more troops in the area then they have to. they were benefiting from our present their and now they have to be responsible for it because it's still their country. >> danny davis, thank you, appreciated. >> by pleasure. same to you. let's look at the markets back of the 450 points or so. the dow was up 2%. the nasdaq faring much better than not. s&p 500 having a good day as well. amazon reporting record holiday season sales. does this spell trouble for brick and mortars? maybe i'll just bring jeff flock back for the heck of it. turn the show over to him. coming back. d see all the hotelr stay! tripadvisor searches over 200 booking sites...

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blake: great day for amazon. stocks are bananas of the company reporting a record holiday season. up nearly 6% today.

suzanne laing here with me now. here we go. good day for amazon. >> absolutely. they came out with a record holiday sales number. markets are enthused with what they did over the holiday shopping. and they usually only tell us when it's a record. they signed up tens of millions which is great. also they shipped 1 million items for free over the holiday. and they sold millions of items more this year than they did last year. this is the progression we've seen starting with black friday moving onto the christmas season. >> none of us should really be surprised. this is kind of the way shopping is headed. we see this in the numbers are in our daily. >> online shopping is increasing at this point because mastercard came out with the holiday shopping numbers that say

basically were in for the best holiday shopping in six years. 20% increase in online shopping over half of the e-commerce market here in the u.s. the best-selling items or amazon because a lot of them belong to amazon. guess what, they have a multichannel on their own platform. it's the fire stick. i don't actually use that. i don't know if you do. the amazon.sold very well. these are heavily discounted items they can afford to get more users onto their platform in alexa is the most used at home can't see or service right now. but google internationally is doing a little bit better. more prime numbers internationally. they of course dominate here in the u.s., canada and other market. >> is that a netflix thing going

forward. right now they announce to us this year that they have 100 million prime subscribers. that could increase 35%. 275 million prime subscribers. worldwide. and about that. >> you think amazon has to worry about the postal service and rates because the trump administration says the president wants to take this on. >> of course. when you have a stock that's really lifting the markets right now, how do you choose? i don't think they can really enact anyways. or do you i guess share the market to market administration. i think that's a very interesting point. i would also like to point out that amazon, you know, when they announced they got it in their recent earnings the holiday

shopping. might not be as strong as that analysts predict it. these numbers say they were setting the expectation a little bit low. >> susan li, see you at 4:00. so that is amazon one side of the story. of course there's brick-and-mortar. we've seen what's happened with toys "r" us per "the wall street journal" reported that closed toys "r" us stores are selling fast leave it or not. the retail president in the eo craig maloney on if this is a bullish sign. go ahead. what's the reason behind this? these massive big rock stars are moving. on the market. >> they are moving because there is great locations in some cases in the landlords are happy because the rents are lower. the leases are long-term so it's a great opportunity for retailers and brick-and-mortar expanding to get into a space that are pretty reasonable rent. >> is this a sign that brick-and-mortar isn't

necessarily bad? when you go around the country, look at shopping malls were these are located, you wonder how the whole model exists going forward. >> work and mortar is here to stay. it's not going to go anyplace pretty on the channel approach that a lot of these brick-and-mortar retailers have started to adopt is really starting to pay off. using wal-mart and target as two examples of department stores taking it. but a lot of others as well. keep in mind the sales represent 13% of $5 trillion. almost 60% of that is done by brick-and-mortar so we will see a convergence of the online and brick-and-mortar. as we see more and more pure play online retailers. in two or three years you're not talking about online versus brick and mortar. it's all retail sales. blake: do you think the agency

can -- you're in new york city. the reality is that these stores are going to be smaller tailored for local cities and local market. >> i think you're going to see both. the small tailored lines but you're also going to see places like wal-mart and target in some of the specialty department stores expand their departments like we've seen. but i do think were going to see someone test the market again for toys. all the millennial kids -- all the millennial set having children and that is going to really be a strong five to 10 years in the toy market. i think we are going to see somebody step up and take these open up another retail store. >> like who? >> i'm not sure who it's going to be. if i knew that i would do it myself. anyways, somebody out there is

going to take i think a chance and open up one. >> in the meantime, what is the gamble that these companies and stores taking the toys "r" us massive spaces and assuming those leases are taking the sales on the other side. what is the gamble that they face in the short-term? >> are retailers taking them are looking to expand their value retailers. their sales have been increasing, looking for better locations. i don't think there's much of a downside at all. most of the sizes are anywhere between 30,050,000 square feet in if they don't need all that speeds be put to stores in there. we've seen the absorption rates over the last three years. so i think toys "r" us and other stores that have closed will be able to absorb them. especially in hot markets. blake: craig maloney, we'll see

what happens. we appreciate it. thanks for coming in. president trump in congress as you know by now go into detail over border funding but not much mention of the skyrocketing federal debt. have you seen that number recently? there it is right there. a good number on the left. not so much on the right as "cavuto: coast-to-coast" returns.

blake: so, we like what's on the left side of the screen to the dow up 518 points at or near session highs. it's been about 2.5% about 2.4%. what about the right side of the screen there? the u.s. debt $21.89 trillion. 66,000 bucks a person per taxpayer about $180,000 just since last christmas alone. the average household is more than $10,000. the co-locating, tax foundation federal project director. what about that, nicole? >> one of the questions around washington is what is driving the growth? do we spend too much or don't tax enough. this is a chicken or the egg question. if we look back to what the

congressional budget office is telling us, since world war ii we've collect and 17% gop in revenue in 19% of gdp. over the next decade we will collect 17% of gdp in revenue but will spend close to 22% of gdp on spending. spending really is what's driving the growing national debt. >> we've had democratic white house with democrats in control of the hill. now we just have or have right now for the next few days at least a president, republican in the white house with republicans controlling congress. so when does it end? >> what history tells us is that actually divided government. see now this new incoming congress of the democratically controlled house, republican senate and republican -- there'll be some checks on the growth of the federal government and the current federal shutdown

could be the beginning of the process. >> questions about whether or not mick mulvaney will have influence on this. of course the budget director with the incoming chief of staff in just a few days. take a listen real quick when he was testifying before congress as he was trying to get that omb job. this is what he said early last year. >> i believe it's a matter of principle that must be sooner rather than later. also fundamental changes are needed in the way we spend and tax if we want to help the economy. you must include changing our long-term fiscal path which is unsustainable. >> the long-term fiscal path is unsustainable. mountable manias in the white house. is anything going to change? >> i think mick mulvaney houses way things will change. in congress he was known as being a true fiscal conservative. some of these changes and challenges can be done very

quickly and those choices are pretty easy to make. as we get into the 2025, 2027, 2030. choices and problems become even harder because we have this aging of the population. >> we see the number and it is this a row when you see the chart of nearly $22 trillion in debt. but we haven't stopped it on an individual basis yet. when you think that chart turns into something where people say we've got to do something about this. not down the road, but right now. >> there's going to be a problem going forward. one of the things that's made it easy as our interest costs have been well below historical averages because we've been in that place for investors since the global financial crisis. as interest rates in the u.s. start to creep up, that will put even more pressure on the federal government spending that will perhaps supply checks as

needed. we'll see what happens in 2019. projections going forward show there's more spending on top of more spending on top of more spending. nicole, thank you are depreciated. the nasdaq remains in their market as you know. of 3% today. are there signs for trouble ahead for attack? we will take that up after the break. 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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blake: while we were had break the dow moved up to 600 points higher. 605.55. that has been the high. consumer spending, christmas sales, one of the things driving this market today. nasdaq up over 3 1/2% as the dow is up about 2 and three quarters%. look at big tech stocks. apple having a great day. amazon as well. they had blowout sales. microsoft, alphabet, you name it, "fang" stocks doing well. so, as you know, they have been battered pretty badly as we end 2018, especially over last couple months or so you see the nasdaq up 3.6%. i believe that says, up 235 or so on the day. jeremy kaplan digital trends editor-in-chief what he thinks might come in the new year. hey, jeremy. >> thanks for having me on the show. blake: first your thoughts what is happening for tech? >> the rally is tied to christmas sales, holiday shopping in general.

especially companies like apple. one of the great gifts on the under the tree is apple ipad or iphone. that is one of the popular gifts that is driving a today's rally. blake: fortune had a story out, 16% of new iphone x xr purchasers, from android users. 80% of the customers said they would be up greating. pretty good signs. >> pretty good signs for sure. sales have been weaker than what apple hoped for. you will see that from suppliers. we'll see after the holidays whether that continues in january and fib. we'll probably see some depression in sales. blake: what about trade that is potentially caught in the cross-hairs with u.s. and china? >> trade stuff, geopolitics in general i think apple is actually fairly immune to a lot of them. what mostly drives apple sales is consumer demand for shiny,

cool stuff. because apple has high profit margin on the profits, even if there was impact from tariffs or chips i think apple could weather that. >> no worry about the supply chain? >> i think apple will be more immune from that than other companies. blake: "fang" stocks, 2019, what do you think it looks for them? >> that is where we see some problems especially the supply chain you're talking about. some of the companies that make chips, all of which come out of china, if there is 10% rate increase on that stuff i think a lot of other companies will pass that on to consumers. there will be a risk for higher prices which will just depress sales. blake: speaking of apple, the phone, one of the things you do on the phone is get the uber. they will have a big ipo coming up next year. what do you expect from that company in 2019? >> you know, uber is such an interesting company. i'm not a tech investor here. i'm a technology prognosticator

i try to stay out of that as appearance sake. uber is wildly unprofitable. would you invest in a company that doesn't make money. doesn't feel like a wise investment. blake: might have been, when you did that for amazon. investors are getting paid on that right thousand. >> very true. uber dominate ad industry. they spent a lot of money to have market penetration and positioning. there will be a lot of stuff around self-driving cars which is talk of the year. blake: i was going to ask you about that. renewed self-driving cars. >> slightly different forum. sill testing sell driving vehicles. at ces we'll hear incredible announcements around self driving vehicles. this is interesting time to invest to see who is positioning themselves in the space. a lot of component manufacturers you don't know enough about may get deals with mercedes-benz or

other self-driving companies and they may be a force to reckon with. blake: self-driving, are talking about, uber eventually wants the car to operate on itself so they don't have to pay drivers and take 100% of the profit. how far away are we from that? >> this is such a strange market. we're very close to do that right now. you could easily do that right now. in fact i tock a trip in self-driving taxi at ces. it was mundane as you might imagine. it was literally a taxi ride. there is were no problems. that said, regulations rules, local laws impact whether we can do this. we need changes before the technology can be rolled out. blake: jeremy, thank you for joining us. as we head out we have session highs on the dow. the was up about 625 points or so, up 2.85%. the nasdaq up about 3.6% now, i believe. it has been pa great day all

around. i will be back in for neil tomorrow. unless cavuto gets wind that i took his chair, and says burman, get out get out of there. i'm back at 4:00 as well. this is charles payne. charles: blake, when i gave you the rally, you took it up another 200. you put pressure on me. blake: it went from the cp effect to bb effect back to the cp effect. charles: thank you, my friend. this is "making money." stocks in rally mode my thoughts why i think this is 1987 all over again. by the way, that is a good thing. the president says he will keep the government shut down until he gets his worder wall. will he get it with the democrats take the