week that does it or for us varnny and company is up next charles payne is holding it down for varney today. >> i told you we needed market to be down big to tesla resolve it was amazing the best interday reversal in best recession ever this is amazing market. i can't wait to get started. we'll see you again you did a great job this week. all right folks all i'm charles payne in for stuart varney we have huge stories for you today first riled rides on wall street. the dow swung more than 850 points yesterday, it was getting crushed it was on verge of erasing all of wednesday gains and then it turned around in a final hour of trading closing up nearly 260 points this morning futures have been higher for most part. but they're all over the place we know it is a wild day you do not know where we're going to to end but i love resolve of the last 48 hours in other news we're entering the 7th day of

that partial government shutdown. president trump digging in his heels upon immigration, of course, refusing to budge with respect to the wall right he's not going to give in on wall if he doesn't get that money. and then there's sears a cautionary tale but so amazing this was the biggest company in america it was amazon before amazon and now it can't even find for its assetting could be closed by the end of the cay forced to close doors for good we have a lot coming for you in friday edition of "varney & company" buckle up it starts right now. ♪ >> check this out the sky new york city turned blue last night kipe creepy. >> alien in"ghostbusters" sol thought it might be a terrorist attack but north dakota did

confirm this was a malfunction taking place at a conedison electrical power plant in queens. you see this blue sky that overtook the city, also shutting down laguardia airport every terminal was closed and that impacted flights from many, many hours. getting in and out of the new york conedison from what we hear right now with they're trying to fix this power plant the fire has been contained but as you see i would call it a biewfl blue sky last night with some questions men in black, all a of the conspiracy theories out there. >> i can bet. [laughter] by the way, they probably won't go away with that explanation either. [laughter] all right, sir second to last trading day of the year i want to brick in economist john we've been having crazy wild swings people are trying to get a grip on what message of the market is. what do you think? >> con fuseesed you know it senses we're going keep getting earning growth lower pace and troubled by the fact that

despite suspected slowdown by real economic activity by corporate earnings fedden plays to hike rates in 2019 it makes no sense so she want resolution of apparent imbalance inconsistency. >> i do find it interesting it is tough but since advent of financial tv we do this sort of minute to minute post in every session and we have with to have an answer. it seems to me yesterday around 2:30ish word came out that powell would be willing to meet with trump not requesting but wouldn't turn it down and that felt mic turning point was up 40 points and off 200 points, of course, we have this amazing rally. it all is centered around powell would that give the the investment community comfort that these two gentlemen met? >> like to see the fed chairman show a sign of flexibility on issue of rate hikes for 2019. so that was a -- a positive move. >> other than that, the acknowledgement that we have an

amazing 2018 forgetting about stock market for a moment when members came in for fourth profit see it over 2 for third consecutive order and year over year rate that cannot be matched we understand that. and markets year earlier point grapple with adjustments now we're trading at 4p ratio under five year average how much further does it have to go because we're still growing it is not like we're not going to grow growth won't grow at the same pace. >> i think once market feels confidence that fed will not hike interest rates unless economic performance exceeds expectations unless earnings growth exceeds expectations, there's a chance that -- equities will stabilize and begin to move higher. >> some of the other issues out there. china, you know, listen this week there have been three major china stories completely, completely undertold. removal of tariffs on 700 items

the meeting and then this morning, comien is going to film port rice from america for first time ever. these are stories that the mainstream media refuses to tell even financial media to large part. but i love what's happening as we go towards this meeting and toward some sort of potential resolution. >> yeah. you know progress on the trade front can only be constructive with the equity market and for the u.s. economy. >> what is -- the thing that you think we need to see more more than anything else i guess it is the fed after the fed everything else it is like one and then everything else seems to be port town the list. >> that's utmost importance and once we feel confident that interest rates do not get ahead a of themselveses and choke off economic recovery, we should see a stablization. and resumption of upward movement by equity market. >> all right john stay right there. hey folks meanwhile tesla big news there they're adding two big names to their board suzanne who are they? guess what larry ellison oracle founder ceo one of the richest

men in the world, and also kathleen wilson thompson named as any independent board member as well ahead of global hr, at walgreens aa license boots, and this was a deadline today was a deadline for lon musk and tesla to nail two independent members of the board of fec settlement back in september and after e.g. lon musk, of course, that tweet funding secured -- misleading markets and also something that u.s. state investment funds that have a big stake in tesla demanded for that is lenient on elon musk and provision. >> i love larry ellison but i'll tell you why i think he's a good fit here. he has a chip on his shoulder like elon muck an orphan you know, he's been divorced four or five times a tough buy to get along with but also determined he used to go through steve jobs as garbage he wants to win also he bucks the mainstream. he if you tell him it can't be

done he believes it, done so he and elon musk i think are able to see eye to eye and he'll be able him navigate i have a chip on my shoulder too i know why you're upset let me usher you there so we don't make mistake anymore. >> and pay millions dollars in fine. >> thanks a lot. let's get to politic because it is day sen of that shutdown in a democrats now, of course, take control of the house in just a few days president trump mean while tweeting this morning, quote, we will be forced to close a southern border entirely if the democrats do not give us money to finish the wall and also change the ridiculous immigration laws that our country is settle ised with hard to believe there was a congress and president who would improve. liz peek is here all right liz president trump digging in his heals. so is nancy pelosi and chuck schumer so where's it going to go from hey? smg there has to be a resolution i think both sides don't want to enter the new year with it this soft messy overhang particularly president trump who is so keen to see this market stabilize and

do better which it is now doing. he doesn'tment this -- >> in the market i think to some degree the sense that there was chaos and market and government shutdown sure nobody will like that. >> hurt in the market is .5. maybe but it doesn't help. charles, and here's what i would say it be this. certainly president trump ran are on the wall no question about it he also ran, though, on being a deal maker that he was person who could fix a lot of thingings. this is an opportunity to fix some things and i think honestly the nation would cheer if we actually resolved that dak ka situation you don't have to give them -- >> he did but the democrats came back and demanded more than he demanded more and demanded end of the diversity visa and program and other immigration fixes. i think this is a tile to go bag to that. offer, and say look, i, you know, give me some funding i'm going to allow daca people to stay here because at some point

latino community will say to democrats what have you done for us lately? you have control of both the house and senate, an the white house for period of tomb you did nothing to resolve the status of these millions of young people who came here illegally but have grown up here. the country is very much in favor of this. there is a deal to be done and i think it would really, really help president trump standing to do it. >> you know, i would say with respect to latino hispanic in this country, they're at all time low unemployment rate and population ratio. democrats need to be choired about about that. should be worried but if president trump is going to put daca back into it you have to take the number back to 20 million dollars. that is, you know, that was the ultimate deal. he came in within offer that shocked everyone. including members of his own party. but you know, i'm hearing that, from some sources the white house would fake something less than 5 billion and not the one billion. so -- >> i think all of that is

small -- small school. >> someone on other side i watch with times people come into office trying to sell things i don't want it we never have the deal i haven't bought them yet. [laughter] not their fought it is that i don't them so if the democrats don't want president trump to succeed, strictly out of bitternd of seeing him succeed it is tough. pnches but those parties could succeed here if you got some sort of resolution. to the daca situation at some point we need to do that. right and if you also got wall funding even if it is only 5 billion it is let's face it. it is the concept of the wall more than reality of the wall that president trump is running on. because we with all know there are parts of border do not accommodate a wall. rivers an stuff like that. they supported a fence are we going to keep the government shutdown because we have a disagreement on barrier versus fence, qawl that seem stiewpgd i think longer it goes on, neither

is winning. >> unique happens in washington, d.c. and that would be common sense. leetle check on equity futures all over the place this morning as well at one point up 200 and then up maybe 80 and grappling to stay here and forces see this market pull back but nevertheless this will be a nice way to start after the last two sessions. and here's something olive branch alluded to it first time ever china says they will allow u.s. right imports goodwill gesture ahead of the trade talks bring in china watcher michael pillsbury will talk about this. also this could be more trouble for the e-cigarette industry fda commissioner scott planning more meetings with e-cig makers now he's blaming manufacturers and management for teens getting hooked on these things another day and another negative headline for facebook documents raising serious questions about how the police or not police

speech in their users all over it. more varney right after this. what's in your wallet?

a new way to save on travel. now when you book a flight you unlock discounts on select hotels that you can add on to your trip up until the day you leave. add on advantage. only when you book with expedia. you know it is a sad day in american history seers may be down to final hours. christina what happens if there's no business afternoon? >> split up into parts. this company around for 125 years and filed for bankruptcy in mid-october. looking for a bidder most people will assume to believe the chairman of sears that's id did

about 4.6 billion, however, he hasn't put forth a bid to buy it and that's a concerning thing. where is he going to get money in tile because he has to do this before 4 p.m.ed today. the issue is, people don't want toes invest in company has been losing money for years now. in october, since then they close over 180 stores across the country and lampert people have argued he's been running it like a hedge fund haven't been investing in market and advertising an campaign sears with k market products because he also owned k mart and it is not working so -- they could potentially be on chopping block if they don't get a bid by the end of the did i at a 4 p.m. eastern time. >> we'll see if will be certainly in the end of a serious amazing era are. destructive for or you folks they're going to teach this story in business schools forever. facebook vowing to police users, but leaked documents raising serious questions about how it

is going to do that. joining us now with social flow you know you helped business with social media. exposure you understand this better than most this "new york times" was damming in many ways what do you make of it? >> i was struck by how manual process is. they're talking about power point presentations and excel files being distributed to 7500 moderators around the world. you know are facebook is really going to have to bring its engineering talent to bear on this i don't know if it is a solvable problem but they're not going to solve it with power point. >> here's one line that struck me. increasingly the the decisions on what post should be barred, amounted to regulating political speech, and not just upon fridges but extremism and main streel are blurring. and in other words, you know, they are the arbiters of what -- what's okay politically. now we know they're getting in a lot of hot water in this country for some of the decisions that they've made, and again it boils

down to now perhaps just an individual judgment of these individual who is are following this huge booklet of guidelines i don't know that it is working. >> i think you're exactly right i don't think thinks it is working and a 14 page guideline request 7500 mostly entry level employees around the world being the arbiter of speech i think if you have facebook to say hey we don't really want the to be in this role either but it truly is sort of a governmental regulatory question and, of course, it is going vary around world talking about the united states and a the eu different geography have different standards and very different set of responsibilities. >> of course jim, you know, some the silicon valley issue or answer might be hey you know let's get algorithm to do job as a human beings but boils down nontech experts saying it seems like these reflect the intent of the people who create them so

almost brings us back to square one if facebook does not have an introspection on values and idea with other people with other opinions that should be heard. >> i think you're right. algorithms are not magic they can reflect the bias of the people who create them. but algorithms are krit are call we have to think of the scale here you don't use same become et that you use in your kitchen sink to control the pacific ocean and facebook is dealing with billions of post so doing it manually we're sort of seeing result of that. they're going to have to find a way maybe in your, phrase of using introspection is appropriate to tune them to be able to handle the scale. >> i want to the ask you on another silicon valley controversy are emerging here. jim, the lincoln cofounder apologized to issue yesterday that unknownly funding misinformation campaign against last year alabama senate runoff election. now, i think we all agree he it

the right are thing. but some people still concerned that he's gotten so deeply involved and politics and might reflect again the silicon valley nature in all a of the muscle might empower that they have being pushed beyond progressives and what that means in terms of, you know, tilting our elections this firm that he hired used russian tactics. >> yeah i think you're right one of the challenges here is dirty tricks are not partisan right they can come on any slide or dimension of the political spectrum and what we have food is -- focus on what do we think is an acceptable set of behaviors to your point he sort of admitted to that and said that was not appropriate a shouldn't have happened but you're right in that these things can happen left about are right dirty trucks are dirty trick it is doesn't matter what kind of agenda you're trying to advance. >> we appreciate your expertise and see you all real soon. >> thanks. hey folks let's take a look at the -- equity futures here dow jones

industrial average again a high we're up almost 200 points we're still seeing green -- and remember that was a huge, huge last hour of trading. one for the record books. meanwhile natural gas and perm i can basin so plentiful drill reverse giving it away. this was a story we can't share with wait to share with you right after this.

>> there's a natural gas give away with in parts of texas and in mexico so what exactly is going on there? >> shale drillers in the permian err essentially drilling so much and so much natural gas and lack of infrastructure not a lot of pipeline so they don't know where to put it so almost worthless to vista energy this was highlighted in wall street journal got paid to take the gas

off of the hands because they can't put it back in the ground and blaring it which is very dangerous you burn that natural gas and, obviously, environmental issues. nonetheless it is still important for america because it contradicts to one with third of u.s. electricity. so we have so much of it, and as we continue to ramp up production, dmes pick production of oil, in the country you've got to do something with this natural gas and that's the reason why, it is really hitting this area and they need to get it off their hands. >> liquefy it and export it there's a giant market out there where we get -- that cost natural gas cost so much more than it cost for us. we'll see. great story, though. not a great story but amazing story of abundance of natural gas that we have. elon musk ploog to dismiss a lawsuit from that british diver you may remember he called him a pedo during that thai cave reses cue. >> contending that lawsuit

should be dismissed because a comments weren't serious and he's protected by his first amendment right. which is free speech as you know elon musk tweeting in july for that cave diver that was helping rescue the 12 thai boys because he was called a pr stunt offering the the submarines to go underwater to go into the cave to rescue these thai boys divers said this was a pr stunt but, of course, this caused a lot of controversy. i should point out that that tweet has since been deleted. of course, but the tweeting has cost elon musk a lot of money this year. >> what courts are they in? >> the court is -- filed in a california court and british diver that we're talking about as well so this is more of an international case. >> we'll see what happens. >> air gangt for building that little subway -- submarine sorry subway to think that he can do that and insert him into that story i think is unfortunate.

>> well the comment was definitely unfortunate. >> yes. that's a good way to put it. legally might have a right to say it first amendment rights claim pps dow jones industrial back to back sessions biggest point gain ever followed by the best interi day reversal since 2010. can it continue? you're looking at the board. dow jones industrial average up 91 points. we'll be right back with the opening bell.

♪ snots >> less than one minute away from opening bell and stage is set for really amazing session potentially amazing session now we know people are away which makes yesterday interday reversal even more remarkable when dow was off a

600 points it looked like it was a good chance of erasing all 1,000 point gained on wednesday. that didn't happen had. we have one of the best reversals in history best since 2010 and we'll see if we can keep that momentum going. opening bell is going to ring here in two, one, zero seconds here we go. markets opening i want to tick a quick check first of the big board. see what may be leading here a lot of green led by jpmorgan chase they have banks there if you have disney there visa is name unchanged but interesting mix 29 of the 30 stocks high e. s&p 500 let's take a look at that right now larger, of course, larger index used more by wall street professionals. half a percentage point there not a bad start and, of course, nasdaq which was virtually unstop public led by tech names momentum names let us down. had a good session yesterday but it did not lead to rebound yesterday believe it or not. in factlet check those big tech names which -- came up yesterday but really

weren't the catalyst which i found intriguing. all up right now microsoft bigger winner. a lot of people starting to like microsoft better than some of the other names on that board. and then there's oil. it's all had a sea saw week report early in the week of emergency meeting at opec saw 5% move, and then another report yesterday of -- a glut saw him pull become and now we're getting equal there. dr barton suzanne lee and christina is with us second last trading day a wild one. scot, here's what i love about yesterday in addition that we with came off canvas is what led us higher material name it is wasn't with amazon or verdict but material names right it was free port, chemical names i want to see these value names do well. i want to see broaden their portfolios what do you think? >> i agree with you it was good old fashion comeback that way number one and talking to buys

behind me on this floor out taverns where we speak about markets. there has been a little bit of a correlation with oil. that's something that guys have been watching too. another interesting thing is mildly controversial. but as a tech leans left and you talked about it earlier in your show tech companies do lean left and a lot of written by techieses that lean left an they've been trying for 18 months here they have a bit in their teeth and what market started to go they weren't going to let up and feels like a lot of hft they have exhausted here and yesterday was a great example of that. so i have to wait to see but that's been something that these guys have been talking about behind me all day. >> the face that last hour of trading yesterday, it does underscore there's up demand for market not necessarily people trying to pick bottom but those who want to be in, with if they feel like turn is happening. >> well i think that -- the day before that you know charles was when we got that

huge 5% update across the board on parking lot index is almost 6% in nasdaq. and that was a 10-1 volume day on new york exchange volume ten times bigger to downside that's a rare occurrence it doesn't by itself mean that we have found a bottom. but when we got that great follow through yesterday afternoon that you've been talking about and scott was talking about that really starts us lean toward fact that the low it is that we put in earlier this week are going to be really important and i'm looking for had them to hold as a bottom charles. >> you're also a looking for them to be tested. >> i am. you know, usually a bottom is very unusual. i think that it would be logical for us to come back and test those over the next couple of weeks and use that as a spring board. >> to consolidation third day of gains what i'm seeing over 1,000 point rally it is important pretty critical in terms of sustaining the advance or the

rebound that we're seeing in markets. so i would say oversold condition and late cycle volatility trading that's kind of the characterizes that we're seeing in markets right now. >> add to volatility trading, though, you mentioned the bottom. but if you look at just historically serious declines you saw the vix higher than where it is right now. yes trending above 30 points. but isn't there still a lot more room to fall? for whoever wants to answer that. >> people use that to trade, you know, you can also argue that this has been a rolling capitulation maybe we won't have that classic we lost 4,000 point on dow in blink of an eye, that's capitulation didn't happen all in one day. by the way, i've been comparing what's going on now to black monday in october 19th, in 1987 that wasn't a one-day event we were down 22% that day. but culminated 38% move off of highs, just a couple of months before that. so, the same thing many people thought we were talking about a

recession turns out we didn't have a recession for next three years but what i will ask you, though, and -- even though dr you brought up the breath i want to ask you about this as well scott. leadership, with right because yesterday in our nasdaq we have 301 new lows one new high. [laughter] okay. on new york stocks exchange over 200 new lows. 6 new high. so, it is really tough, though. it shows you that deputy how tough it has been. >> you're right we've had a rolling capitulation and very, very difficult to set new highs because we've come so far down. right so we're much closer to everybody all time low orally low that is understandable but at the end of the day longer that we stay, around these levels, the less of a chance of a livelihood of going to test those old lows. i would agree with with other guest that it kind of feels like to me we're not quite down scaring everybody yet. however, it has taken a lot of steam out of the bears because of last two days of market action and wait to see how this goes on. if we go on at levels slowly but

surely trading sideways hard aer for them to do that. >> you know dr retalk you know for about two week right they have three weeks october 9th lows. the market went up. pulled become and held those lows -- kept holding and kept holding but when that dam broke there was like you know, blows. what happens if we with do retest lows as you're pointing out and they don't hold what's the worst case scenario? >> if the lows don't hold charles, i think that's going to be something outside that is acting here. uncertainty going on in the white house, if the the trade wars go the wrong direction not toward more free trade but more tariffs and more battle. something like that, and that could trigger us with a really big cascade we see in other ten to 15% down from here. to make this a, 35% kind of pullback. >> that would match october, 1987 pullback that was in a high

30% pullback let's talk abouts federal reserve. i think that's been biggest issue for this market all year long. you know, and you can point to things from the october 3rd mistake that jay powell made many that communications to -- the more recent foc meeting that crushed our markets. now reports are that jay powell will be willing to meet with president trump scott. would that be a good move? >> you know, i've always said face-to-face is going to be better than telephone. or on the internet right? but here's the problem. beating this dead for now a year and a half. when you talk about raising interest rates are i've been doing this 31 years raised rates to get out in front of overheating economy or one that is already overheated but i can't use the word overheat with u.s. economy here. i get they want to normalize and i understand that but you have to be very careful because although thingses are good. i'm not quite sure is they're not very fragile right. god and fragile are two different things i think that's

what powell has to realize and ping up donald trump actually backed into that reasoning. because i do agree with him that, you can snuff this out these don't die of old age we've heard that saying but fed that causes problem. but end of the day face-to-face 100% than phone and/or internet. >> don't you think they should is stay separate but i think the conversation needs to resolve around tightening that's been happening at the fed not necessarily interest rate hike it's that a concern the lack of liberty liquidity in government and debt going forward. i think that's a major, major issue and meeting with the president all a though it is great. they can mend their ties or maybe the president can see eye to eye. but i think that's not the major issue in or nor does it really matter. >> slowing growth next year as well coming off 3% in 2018 expects to moderate are according to federal reserve itself that 2.3%. well you're a slowing growth environment makes you wonder why you're even thinking of more tightening at this point i think it is one or none in 2019 for the fed. >> you know it is interesting dr

because scott talked about fragility but we saw earlier in the year with housing, and then yesterday we had a mix consumer confidence report. that conditions were financial but expectation number was low. how does that all play into this? >> well, suzanne touched on it, you know, that the fed also reduce their gdp number for next year down from 2.5 2.3 consumer confidence i'm not making a deal over it because in october, we have the highest number of 18 years. so you know about when you're coming off of the high, high, high, and you have a couple of month pullback that was kind of normal regress to mean but what happens after that first quarter, with the rnings numbers when we stop seeing the year over year bump that question got from the tax. the tax cuts can we with sustain some high or double digit to

growth without those tax cuts coming into play? that's going to be the big thing. >> good news there is that had expectations are extremely low, and everyone is bracing for the big shock a lot of time it is that hes a lot. scott dr thank you guys a lot. if i don't see before you new year thank you have a great happy new year. [laughter] >> you too have a happy new. >> right now the dow clinging to a lead here. up 30 points. s&p up -- but just moments ago nasdaq just turned negative and i pointed out yesterday. nasdaq was the last of the major indices to move into the green yesterday. those momentum names aren't still struggling and that's an interesting story. >> still many bear market territory. >> certainly and then christmas shopping season may be over but amazon still offering deep discounts at thousands we're talking thousands of movies tv shows, music mobile games, in fact, today is annual digital day sale and amazon spokesperson joins us to tell you how you can

score some of the real big deals you can take some too and latest on trade war with china. now report that trump could be ready to sign executive order that would ban a sale of zte and products in its country our favorite china watcher michael pillsbury is coming up next. i've always looked forward to what's next. and i'm still going for my best even though i live with a higher risk of stroke due to afib not caused by a heart valve problem. so if there's a better treatment than warfarin, i'm up for that. eliquis. eliquis is proven to reduce stroke risk better than warfarin. plus has significantly less major bleeding than warfarin. eliquis is fda-approved and has both. so what's next? seeing these guys. don't stop taking eliquis unless your doctor tells you to, as stopping increases your risk of having a stroke. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart valve

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>> those are disclosures by the way for our guests. checking on big board here dow back up again, interesting blue chips, value ideas, investors are coming back into the market the last couple of days, in fact, we saw the first inflows into funds in the last six weeks. obviously, they're looking for value not hot momentum names right now now to politics white house considering an executive order to bar american companies from use telecom company by

huawei and zte and michael pillsbury with hudson institute. michael how surprising is this in a sense that president trump seemed to go the for zte he said at the time it was a personal favorite to xi jinping in the province which was the heart of telecom growth in china and also his hometown. >> that's right. [laughter] how much of a surprise is it? well president hasn't signed it yet. this idea has been kicked around the for six months, obviously, president is very positively seem in beijing as master negotiator so if he signs this thing and kicks chinese by or barring two companies that would set a bad kind of start for these talks. talks began in just about ten days very important that our team is going over there. and they're going to try to convert the verbal pledges president xi made toe president trump into a written dt. so this is very sensitive time in the talks. it is really very good news

there's going to be this face-to-face meeting to try to convert things into writing for the first time, charles as you know almost 30 days has gone by since the buenos aires meeting so they're getting converted into a written agreement i don't think it is right time to ban zte and huawei but this is a leak he might do it. >> to your point coming from reuters meeting leaking all over this because there's great news out this week on this tension maybe easing or getting better ahead of the meeting that hasn't been reported so let's let audience know china saying they're lowering tariffs to 700 item products in new year. by the way, in july almost 100ip products, the meeting, of course, being officially announced by both sides. and then this morning china saying hey, you know what we're going to offer this olive branch import rights from america for first time i'm not sure when but before it is over i'm predicting

someone of financial tv will say it is not a big deal because china don't eat much rice. [laughter] >> well i think what's happening is somebody doesn't want talks to succeed. somebody is leaking things every now and then that put it negative spin on the market. by now investors should tbet used to if. talks are going in a positive direction. president trump knows what he's doing and chinese made eight or ten small signals already. they've submitted as you know, charles they submitted a few days ago, a new law to crack down on intellectual property theft and forcible technology transfer. they're also talking about opening up some new sectors to foreign investment including the american investment companies like goldman sachs this is kind of a big -- dangle in front of goldman sachs so overall news is positive. but every now and then a leaker tries to hurt the -- cause and perhaps upset president trump i hope that's not the case for this. >> so do i. so do i. also let's talk about the real

big deal, i think was -- this sort of talk that china willing to make adjustments with made in china 2025 now let's be frank. they're way behind schedule. you know they just missed they're missing this second, five year economic plan in a row. if you look in the details on some of this made in china 20stuff it was not going to happen no matter how much intellectual property they stole but it would certainly be absolutely remarkable if they did make changes because i think that could be ultimate key to solidifying ultimate deal. >> president trump is talked a lot about made in china 20825 as you know charles he thinks it has been cut back key thing is subsidy. nobody minds of china has aspiration to dominate these ten -- technology sectors in the world. that's their dream okay fine. if they start tisching out ten to 20 billion dollars of subsidies, that's a violation of their commitments to the world trade organization. president trump thinks they've already cut back he's got a tsm

times more in press conferences but overall good news to me and for leakers trying to turn market downward. [laughter] empleght well let's hope they announce a session. michael he's down maybe about like coming over a cold or something i hardship everything is great with with you we love having you we have to keep you heat and go into the new year because we need someone to give it to us straight when it comes to china stuff and you are the the man. merry christmas and happy new year see you again soon. >> we have to all go on a diet that's my view. [laughter] yeah. i agree with that one. see you. saudi following khashoggi killing what are the details on this ?jts killing ftion three month ago but we know cia reported concluded that king well muhammad was responsible in that and complicit i should say and what they're doing is trying to reshuffle the cabinet make sure it is stable to most important point of this is they're taking away former

finance minister you've got abraham and he was pretty much the face of -- a lot of what wases going on in saudi arabia on the camera ares and stuff and now you adele thas going to be the new -- minister and you're having a shakeup in education, media, there's going to be a new national security advisor. all of this is an attempt to rebuild their image across the globe which we has -- crowned prince still nothing happens bringing many and closer now take guys part of the old regime up ford into cabinet so not really anything different. a change of face. >> thank you very much christina well, dow 30 stocks. you know, tben, showing a sort of resolve that we've seen over last couple of days moving higher here. nasdaq is one that is struggling more because you can see stock up except goldman right now. walt disney leader procter & gamble biggest winner in consumer staple keep an eye on

that stock and searching for valley. it is flu season fact in full swing and reporting widespread flu cases. up next dr. marc siegel he says you haven't gotten the vaccine yet you should go and get a shot as soon as possible. more varney right after this. (engaging uptempo music) - with tripadvisor finding the right hotel at the lowest price is as easy as dates, deals, done. going on a work trip? dates, deals, done. destination wedding? dates, deals, done.

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which is the one that look like it is plugging into a computer over 70% of the market and another 2 million using it marijuana for vaping marijuana so this is enormous problem one thing that fda did that had i like is they got them to take flavored e-cig like bubblegum and cucumber out of the store and men menthol and mint that worries me. >> reading between lines reason for this meeting that manufactures particularly since jewel is acquired is gigantic acquisition getting the muscle of mainstream cigarette makers they continue to push products they're not doing bubblegum stuff but telling fda push out products you don't want to you have to take us to court. >> here's why they get away with this 60% of the kids don't know there's nicotine this is as much nicotine as pack of cigarettes

in a pod, of one pack of cigarettes in a pod of jewel. yes. here's other thing that nair not telling you charles. yes they're cutting down on social media. yes they're taking flavors out of the stores yes they may check a little more to see if you're 18 or over because it is illegal to buy it under 18 but in high school one guy buys all of it and sells it to everybody else in high school so it's not like they can really, really stop the flow of this it is going to continue to go up. >> it might be about consumer awareness but i want to you about flu season on rise you found at the table for this. you always said get the vaccine too bad stuart can't give you a hard time i was against them to be frankly to you but more recently i've been getting them as well. >>i'm glad to see that. >> i've been listening to dr. siegel. stuart this year i'll give hail flu shot when he's not looking other way he gets a flu shot. you know why, because only 40%

of americans take a flu shot every year. this year it is a really good match for the strains that are out there -- >> it is going to work this year. hit or miss this is one reason people don't take it feels like you know what it didn't work this year but roll dice again next year. it is working this year and a you know what it really works more than anything else and no one ever talks about about this. it prevents spread to other people who may be more at risk a community -- if there's a pregnant woman or chronically ill person in your house or someone old or your young you get a flu shot chances are much less they're going to get the flu. >> doc siegel happy new year. >> did i convince you. >> you did years ago plus i have personal issue. >> i already took my shot a free one here at fox. >> meanwhile trump is tweeting he will cut aid toe 3 million latin american countries we're talking honduras and bring in former state department advisor christian whiten on that one, with right after the commercial break.

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charles: 10 a.m. on the east coast. 7:00 a.m. on the west coast. i'm charles payne in for stuart. first the biggest point gain ever, one of the biggest intraday reversals. dow is holding on to gains. nasdaq is under pressure. day 7 of the shutdown over funding for the border. president trump says he could be forced to close the southern border if democrats don't make a deal to fund the wall. we're on that. no shortage of news here. we're watching the second hour, you're watching the second hour of "varney & company." it starts right now. ♪ let's get right to your money. bring in market watcher, jeff sica. jeff, a wild ride for the

markets. where do we go from here? >> i think with what we have on the horizon, when it comes to the tariff issue, when it comes to china, all this uncertainty about powell, i think the market will have a very, very hard time digesting it. i think investors that have been allocated in and participated in this rally are going to be overly tempted to take profits. i think we go down from here. charles: although, you have to argue a certain degree is built in, uncertainty that you're describing is being built into the market already. for instance, like, on 10% of 200 billion is 20 billion. if the market is losing trillions of dollars in value, how do you equate that, let's say, losing 3, 4, 5, $7 trillion of market value to a 20 billion-dollar tax? where does it become excessive? >> the market is so much driven on psychology.

the psychology of the market is making certain assumptions. one of the assumptions we would have a resolution to the china tariff issue, that we would have low interest rates and technology was bulletproof. now we have the psychology is shifting where investors are seeing that technology is not in fact bulletproof. where interest rates may go up in excess of what people anticipated. and the china situation may get worse before it gets better. so, yes, when you look at it from face value, in terms of the overall impact on the economy it is not that great but i think if the china situation continues to deteriorate, then it is going to get worse. charles: meanwhile, old school investing that used to go with earnings, used to be based on earnings, we just had some really amazing earnings periods in this country. now, i know the bearish argument, the word that you hear a lot, particularly on other

networks, is peek. peek consumer confidence, peak earnings, peek consumer credit scores. everything is peek, okay, listen, when rates at zero, investors know they have to go up at some point, when rates come in they know they can't keep that up but there is a place between these two different narratives. >> there is. you talk about the first narrative, the gloom and doom narrative, i think reality of it is, you have investors who have been starved out of the bond market. gone to the stock market, to find dividends, find some way to grow their money. a lot of those investors participated tremendously in the rally. those investors will take any excuse possible, whether they believe it is peak earnings or peak interest rates. they will take any possible scenario to evoke selling. charles: what do you make of the economy, the economic backdrop to all of this? you know, some would argue this

kind of swoon is the stock market signaling a recession, an impending recession although i don't think the market has been that great of a harbinger of those things as it used to be perhaps? the economy, how is it looking to you? >> i think the economy looks fine but i think it's fragile. the reason why i believe it is fragile, i believe if we go into a fullout trade war against china, it is going to have a much greater impact. charles: who will it impact? >> i think it will impact corporations that rely on china for things like components for the electronic companies. i think for, in the construction industry, the steel prices, for whatever reason are going to continue to escalate. i think that is going to impact the construction industry. i think we're going to begin to see, just overall concerns at how far this is going to go. will the chinese, for example, sell our treasury bonds? those are some of the issues

that are probably overdone in a lot of ways. charles: right, right. >> but if the psychology shifts it is a reason -- charles: speaking of shifting, what i loved about yesterday's session, it was not big momentum names that led us higher. it was lockheed martin, proctor & gamble, names you don't normally hear, chemical companies. people are buying value. are you now looking at opportunities to buy in this market? >> yeah. charles: there is an old adage, buy low, sell high. >> this will be shocking thing to you, charles. charles: i'm buckled up already. >> i hated the banks. hate is a strong word. i disliked the banks after their shenanigans in 2018. i did not like them. i didn't want any part of them. i wanted to see bankers go the way of iceland and get jailed. charles: or become fishermen. >> something. now i'm looking at bank stocks i'm seeing multiples that are

very, very attractive to me. i'm seeing regulations are being lifted on the banks. they're poised to move up from here. charles: money, big money center banks or regional banks? both. i love the money center banks. take a bank like bank of america. here is a company that trading at about book value, and is very inexpensive in relation to the other industries. these stocks are down 20%. they have been in a bear market. i think it is time to start looking. charles: do you wonder why they underperformed? goldman down 38% come mooing this week. when you get a name like that off so much it doesn't raise a yellow or red flag to you? >> it does. banks, any criticism anyone has given toward banks they justly deserved but i think it has gone a little bit too far with the bank stocks. companies like goldman sachs, i think they have real issues, but i think the issues have been overdone. charles: jeff, i wrote it down. >> write it down. charles: you look great by the

way. >> thank you. charles: now, let's talk about this where we are with respect to president trump, because today he tweeted out, honduras, guatemala, he will el salvador are doing nothing for the united states but take our money. word a new caravan is coming. we will cut off aid to all of these countries taking advantages of the united states for years. we have christian white on. president trump is making a bold threat and speaking out loud, hey, these countries bear some responsibility for these caravans that are forming, making these long dangerous treks to our southern border, putting everyone in jeopardy and heightening political tensions on both sides. >> right, charles. trump has a very good point. we give these countries a lot of money by the standards of our foreign aid. just talking about economic development, not military aid,

to honduras $180 million in 2017. and guatemala i think comes in even higher, above 250 million. el salvador is right there. these are big recipients of foreign aid. there is no evidence this foreign aid is doing anything, reducing corruption or improving the economy such that people will stay there. furthermore, these countries are not helping to defend their own borders or police their own people. the fact that these caravans contain criminals, maybe they ought to be in solve -- el salvador jail rather than coming to the united states. charles: president trump comes under criticism, these are poor countries, if we don't help them economically it will exacerbate the situation, the caravans will get larger, not smaller, what do you say to that? >> the idea that our border security comes down improving economic and law enforcement countries is bogus. that is an impossible standard.

we've been pouring big flagship economic aid program was the marshall plan just after world war ii. with the kennedy administration we started pouring money into a lot of places. it doesn't correlate with a reduction of corruption. if you pour money into a corrupt system, you get more corruption, more breakdown of law, more refugee exodus. it sounds good, why don't we solve the root cause of these problems. it just isn't something we should do where you money. charles: corrupt government, take the money, put it in a swiss bank account. we know that doesn't help. where do you think we are with respect to all of this? those countries i'm not sure what will happen to them in terms of democratically evolving overnight. then of course there is mexico, which is between us and those nations. would seem to step up a little bit in the last caravan showdown, saga, if you will.

they made overtures to the caravaners, folks in the caravan. for the most part they were rejected, but felt like they were being more sincere. >> mexico has at least agreed to whole people in mexico while they apply for refugee status. most people do not qualify for refugee status under the law. the law is well-founded fear of persecution. i don't blame them, they want to upgrade the economic circumstances. i would be trying to do that the same. i would probably do it in line law fully rather than cut the line which is what these people are doing. unfortunately mexico may bear some of the brunt because trump is looking for things he can do without congress since congress isn't doing his job here. one thing he can do intermittently, or comprehensively close the u.s. border which he threatened to do today. there will be more turbulence coming. this shutdown could go for several weeks or months, it could come to a head. charles: christian, great talking to you. you're great with this stuff. always learn from you.

>> appreciate it, charles. charles: we're checking the big board. we're hanging in there, the dow hanging on, clinging to staying in the green. all three indices are higher for the moment and that is good news asking -- considering where we have been. tesla adds kathleen thompson to its board. wall street likes the move. day seven of the shutdown, homeland security chief kirstjen nielsen heading down to the border today as president trump threatens to close it completely. i want to know if that will be necessary. we'll ask the former head of i.c.e. there is a new poll it is not democrats who are getting majority of the blame for the shutdown. it is president trump. neither side at 50%. we're still on top of that. speaking of democrats, congresswoman-elect alexandria ocasio-cortez dominating the headlines. our next guest says nancy pelosi should tell her to zip it. he will make his case. second hour of

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ultimate test that is painful but necessary. want you to check out transocean and chevron making a five-year deal. 830 million drilling contract. transocean making a pretty good percentage gain off the news. check out the price of oil, all over the place just like the stock market. initially early in the week talks of an emergency meeting by opec sent it higher. then the supply glut sent it lower. we're finding some equalibrium here. there is new reuters insews poll more americans blame president trump for the shutdown than the democrats. fox news contributor, independent women's forum president tammy bruce. i don't think president trump will be swayed by an ipsos poll but what do you make of the messaging from both sides? >> first of all, if the president relied on polls he would have dropped out of the presidential race. these are things that are meant to the move to the opinion of people. that is what polls are really

for. obviously what i'm concerned about, what a lot of people are concerned about, strange interest apparently, jon podhoretz, strange interest in the desire for economic collapse to help them in their effort to hurt the president. that is shocking. it is extraordinary. but highlights i think an interest in, and willingness to have the american people be collateral damage to their own personal fixation at wanting to harm this president. so this become as a problem. you're reporting, reporting here on "varney & company," i think highlights reality what the market is. real information people want. the average person is affected by what the market does. the left should realize, this is a non-partisan issue. strong economy is important for all of us, but we don't hear that from the left. charles: no you don't. by the way, this is not new. i've been watching it from the very first moment. it bothers me so much financial news and opinion is based on ideology. >> yes. charles: not earnings, not

profit margins, not market share gains or pricing power. >> exactly. charles: not the economy. i think a lot of people have gotten hurt because of that, individuals who -- >> consumer confidence is an emotional, you know, psychological framework. is is how people -- charles: great news, higher wages, stronger jobs sort of overcome that. >> the fundamentals are clearly remain strong. but you don't hear that so much, do you. charles: mo, you don't. i don't think you will as long as president trump is in office. that being said then, you know, as this shutdown lingers, whatever other sort of things are going on parallel to that, you are going to hear more and more the shutdown is costing billions. you have people saying it is impacting the stock market. i don't think so. that is part of the narrative. there will be more pressure on president trump to cave. do you think he will? >> i think that he is clearly, he made it clear he is committed to doing what the right thing is. he is committed to doing what is best for the country and best for the american people. if we wanted the status quo, if

we wanted the same kind of reactions to shut downs all of that, hillary clinton would be president. she's not. because the american people want ad pushback against the status quo of shutdowns all the time, dog-and-pony show, theater of this. this is what a partial shutdown, 25%. charles: right. >> american people will not feel it in that regard. people in the government who won't -- they're still getting another check on the 4th. they will work and deal with that. the fact is, that we've got the business of the nation to do. that is what the president is committed to. he is not doing this because it is a game. charles: sure. >> he is doing it because he need as result that will help the country and the american family. charles: you just mentioned hillary clinton. many people would be shocked to find out -- >> sorry. charles: shocked to find out that now ranks michelle obama the most admired woman. not that is shocking part. here is the shocking part, she knocked out hillary clinton who held the top spot, get this, for 17 years.

seven teen years? what the heck? we didn't have anyone else -- oprah didn't make it a couple times. some other people. 17 years, now hillary, it has to be a shock to hillary when the news came in. >> it's a random phone call to people whoever answers the phone. what this poll shows you who the media has been supporting at the time. so what shows you, really who is the media darling, who has received the positive coverage. of course hillary did, all those years. so this is really just, an indicator who the media is supporting. that branch of the democratic party, who they are supporting. of course though it is not surprising that mrs. obama is at a the top. she got about, you can, say whoever you want to say. she got like 15%. so the list is long. with people who chose. not like a majority of americans. charles: she has been on the book tour. sold 3 million copies. has been very successful. >> who has been in the media the most with positive coverage,

what does it tell you when it comes to hillary having that -- charles: where did melania trump come in. >> she came in three. three or four. oprah came in as well. >> everybody gets a little bit of a piece but not an indication of the majority of americans. charles: i'm predicting 2024, tammy makes the list. put me down. >> maybe 10 other names. charles: great seeing you. >> thanks for having me. charles: this number caught our eye, three billion. i repeat one videogame made this year. we're talking about "fortnite." we talked about it a lot. $3 billion. it is a huge number. check the big board. resolve is the big word of the week. the market has resolve. i look at value names, not necessarily momentum names. we're not collapsing, at least right now. more "varney" to come.

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charles: check the price of gold. it has done very well as equities sold off. some returned to it as the old flight to safety roll. sort of unchanged right now. then there is bitcoin. it has been a tough 2018 for bitcoin which at one point was threatening to bo to 21,000. it is starting to collapse here but maybe, maybe it is finding its footing. get this, "fortnite" creator, epic games got 3 billion profits. kristina you have the details. >> because i play it all the time. no. the creator of "fortnite," it's

a free game, according to techcrunch they had made $3 billion in profits, if you're wondering how do they make money on that? so many people playing online games, buying extra weapons outfits that you can wear, your character can wear, your avatar can wear. that is where they're making money. one stat from iphone users alone, they are spending $1.23 million per day on just "fortnite" alone. if you want a battle pass, in weapons games for one week, 10 bucks. that is what people are doing, buying into all added elements to the game to advance in the next level. susan: you can't trade "fortnite" from epic games but investors are publicly listed, 10 sent, one of the largest internet companies. 10 sent is a big backer of that 3 billion-dollar chinese tutoring app. want to try the name?

charles: no. susan: want to try? young fudal. close enough. but they basically helps the kids with their homework after class. charles: first calculators. now it is apps. will kids ever learn anything? i don't want to sound like the crazy old man throwing the shoe, get off my lawn. rachel: get off my lawn. charles: dow jones industrial average is down slightly. up, down, it is all over the place but it is really grappling. it is showing that resolve we want to see. our next guest says we actually hit a bottom, it is time to start buying. he will tell us where he is putting his money. we love those kind of guests. the backbone of the democratic party used to be a union worker. we have a guest who says union workers have become an after thought. that is a detriment to that party. he will make his case later this hour. ♪

♪ ♪ you're the taxman charles: now we know why. susan: there you go. charles: one of the reasons he is in america now, those taxes over there way too high. they're always coming in with the beatles at 10:30. keep that tradition alive. we check on the markets. all the major indices are slipping a little bit. we know there will be back and forth. the dow off 32 points. want to check the big names. all of them also just slipping slightly. it was a good day for them yesterday. we'll see what happens. we know it is still going to be a wild ride every single day.

then we have to check sears. retailer may be down to its final hours. likely liquidate if there is no bid for the company today. on same sort of note, jcpenney shares fell below a dollar first time on wednesday. jcpenney, is moving sideways. but another giant name, and another example of creative destruction. let's get back now to your money want to bring in lido isle investors jason rotman. jason, we've seen craziness last couple days. we've seen resolve in the market that gives people hope. you think the bottom now actually has been put in? >> i think it has been put in. i've been looking at long term s&p 500 charts throughout the last quarter. trying to identify if and when we were stop. there was huge level, huge level we actually reached almost to the t. we launched from that level,

that is the mid to high 23 hundreds n the s&p we cannot get below there. as soon as it touched that, we rallied 100 points. which is a monster day mind you. i think it's a sign big institutions love that area to buy. charles: how long to you have to go to find that number? >> gosh, that's a good question. since the past cycle. since 2009. past six or seven years. charles: let's face it. it has been tough trying to navigate this market with charts, especially one-year charts. first the 50 day was crushed. 200 days were crushed. >> right. charles: october 29th they hit the lows. they held a little while. but when they didn't hold, all bets are off. if this number doesn't hold, what would the risk be? >> do you want me to say that live on tv? charles: we have to be honest. >> you know, i mean honestly, charles, i really don't believe we'll go lower than that mid 23 hundreds. if we do, are all bets off? not necessarily. i think the economy is strong

enough where we may dip below there. i don't see us staying below there. it is a very low price. charles: jason what do you make of all the different things unresolved, right? there are a lot of known unknowns and perhaps some unknown things out there too. none of those things have been resolved. do you simply believe they're baked in, the worst-case scenario is already baked in. >> i always say, conventional wisdom, kind of knows, that the market doesn't look backwards, it looks forwards. in other words, when there is smoke, there is fire. the market is pricing in fire, when it sees smoke. and now, there is smoke. there is a lot of smoke, but the market is pricing in the worst-case scenario. the market has priced in, oh, the fed will raise rates two or three times next year. jerome powell is crazy. guess what? interest rate futures are saying there are no hikes. the market is getting smarter to what is probably going to happen. charles: the some say the market might be price in mushroom clouds, not just smoke.

>> true. charles: so the bottom is in. what are you buying, what do you like? >> so early last year i started to dabble in the cannabis stocks, pot stocks as they're called. i bought canopy, the canadian version weed. the u.s. version,cgc, same company. i still own those. i will by tilray, this company from an investment policy standpoint speaking of fundamentals you want to get into something that has a lot of potential when nobody else is in, when the herd is out. tilray is sleepy, hanging out in the 70s. keep in mind it went up to 300. it is partnering with novartis, ab inbev. this is a big deal. we're starting monumental shift from ingredient usage standpoint. tilray is leading the way. charles: i interviewed the ceo of tilray, within a week the stock was up 400%, to your point, that spike but the

problem feels like, there is a couple problems here. first of all as publicly-traded company you have to execute. secondly, can they deliver, right? we know there is a lot of potential out there but there is some questions about a lot of these canadian weed companies. can they actually deliver to meet demand? >> well there is an answer. the answer is yes of course, but let me back that up. one, if you study interviews of brendan kennedy, the ceo of tilray, one thing that he really wanted to point out to everybody once they inked deals with sandos and novartis are obviously related, one major benefit this deal will give us, now we'll be able to use that major, multinational sales force in 35 plus countries to educate the highest level of physicians and professionals regarding the benefits of our product. charles: right. >> so they have a lot of leverage now. charles: thailand of course, in the new year will have legal medical marijuana. today, we have the first bidding war, a takeover war for a

publicly-traded cannabis company. so a lot of excitement in that space. hey, always great talking to you, jason. see you again in the new year. >> thank you. charles: meanwhile congresswoman-elect alexandria ocasio-cortez of course has been in the spotlight since beating long-time congressman joe crowley in the primaries but our next guest says nancy pelosi should tell ocasio-cortez to be silent for a while. bring in former clinton pollster, fox news contributor, doug schoen. doug? >> yes, sir. charles: you're not the first democrat sort of, i wouldn't say take a shot at her, feel maybe she is getting too much of the spotlight. >> i think she has yet to serve in congress. she is making pronouncements on all sorts of subjects. my sense the democratic party and ocasio-cortez would be better-served taking a lower profile. charles: claire mccaskill called her the new shiny object. >> right. charles: for a party where all the leaders are near 80 years

old, isn't it time for a new shiny object? >> i would love to have younger faces in the party and we have a lot of them but many of them are moderates. ocasio-cortez won a primary in a atypical district. so she really wasn't having to appeal to a broad electorate. we have a lot of moderates, women, lgbt, veterans who have been elected to congress. let's hear from them rather than necessarily just her. charles: some of these, some of the folks who have, you know, who are sort of trying to vie for that spotlight, a lot of them are anti-nancy pelosi though, right? there is a lot of pushback with the new younger folks, whether you consider them moderate or not. >> sure. charles: and i sense that this is going to create a certain amount of friction, rather, particularly going into 2020, with about three dozen democrats saying they want to run for president? >> well, and i think she's, may

whether be formal or informal deal to term limit herself at four years. so i think she is made it clear that she doesn't have an unlimited term. she is a poster woman for what is wrong with the democratic party. for the republicans she will be the democratic nominee for donald trump, notwithstanding who the real candidate ultimately proves to be. charles: one person who wants to be the candidate former new york city mayor michael bloomberg, reportedly prepared to spend $100 million of his own money if he decides to run. what kind, 100 million is a lot of money. that helps him a lot. is it enough though? >> well, i don't think -- i worked for the mayor as you may know, charles. i don't think he made a final decision whether he is going to run or not. i don't think he has a campaign budget or a campaign plan as of yet. but he is somebody who has

certainly been outspoken on climate. he has been outspoken on guns. elected 21 or 22 of 25 members of congress that he participated in this year with his super-pac. so, look he is a force. he would be a new player on the national scene. and obviously i have a commitment to him but i believe he would be a terrific candidate. charles: doug schoen. great seeing you. >> thank you so much. charles: all right. now there is this, president trump threatening to shut down our southern border. this as homeland security chief kirstjen nielsen is heading down to that area today. i want to know, should we shut it down? we're all over that. a poll shows not democrats are getting the blame for the shutdowns it is president trump. he is getting more of it. we'll see what rnc's kayleigh mcenany says about it in the next hour. more "varney." ♪

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susan: happy friday. let's check the big boards. we're looking into declines checking session for dow jones industrials, lower by 82 points. we're seeing a small drop as well for the s&p 500. the nasdaq has been in bear market territory. let's check in on apple, cutting its forecast, citi cutting forecast on iphone production. they're looking weak outflow and outlook for the sale of new models. apple really feeling it today. we're lower by .8 of 1%. apple buying back the own stock in 2018. it has cost apple $9 billion according to analysis in "the wall street journal." so, maybe buybacks, spending $100 billion, charles, has not been a good trade for apple. can you imagine shareholders

losing $8 billion, 9 billion and it is okay. charles: right now. over the course of time they made money. ibm. they bought back tons of stock as it went down over multiple years. fired people. made a smart acquisition but paid more than they had to. there is cautionary tale for all of us. hey, homeland security secretary kirstjen nielsen set to visit the u.s.-mexico border. president trump tweet about the border security this morning. in fact, here it is for you. we will be forced to close the southern border entirely in the obstructionist democrats do not give us money to finish the wall and change the ridiculous immigration laws that our country is saddled with. hard to believe there was a congress and president who would approve. want to bring in former acting i.c.e. director, john s aft ndig. quite simply, should the president shut down the southern border? >> no. this is pro public safety and

risk management perspective is not as significant as political attention it is getting. we have tools and place to handle it. we have resource constraint problem. we don't have enough immigration judges to process the cases quickly. when you look at total volume of trade across the u.s. border. that would be a massive overreaction. charles: what is the right move? we do have a porous southern border that has been abused for years. there are multitude of concerns, whether safety, drugs pouring in, whether the economic cost american taxpayers had to bear over the years because this has been a problem no one really wanted to be able to address? >> charles, i have to give the border patrol a lot of credit. ned migration is going down for the last 10 years. we haven't had as few undocumented immigrants since 2006. i.c.e. and border patrol are doing a great job removing more people than are entering into the united states. what we have is massively

shifting threat. in 2014 central americans come up dramatically. mexican-american stops dramatically. we need a different resource allocation. mexicans used to go you there ports evade capture. sneak into the united states. these are walking up to the boarder patrol agents and surrendering. we never dedicated judges and officers in place to process claims quickly which is driving everyone quickly. the people get to stay for years. charles: we still hear the horror stories. where my wife gets her nails done, there was a woman there. she sent for her kid. the coyotes brought her over. took her four years of salary, saved up $25,000. her kiddies appeared for three weeks. those horror stories still exist. drug cartels and coyotes are making a lot of money, evading the system. isn't it smart, even our responsibility to try to sop that for our well being as well as the well being of those people who are being taken advantage of?

>> all of this is driven by human smugglers. strange way almost unintended consequence of our border security. in 2000 we had 5,000 border agents. made 1.2, 1.4 million arrests. today woe have 20,000 plus border patrol agents making less than 20,000 arrests. what we've done, we gave real business to the coyotes you can't just run across the border. in the '90s, in san diego people were sprinting across-the-boarder. now you pay smugglers and now they assault. break the leadership of those smuggling rings. but, you're absolutely right. charles: you know, listen the dynamics have changed in part because mexico's economy got better. you know, and we had a recession for a while that, jobs weren't there, let's face it. we had economic recession. we didn't have 3% gdp growth for a long time but as our economy starts to grow i can see return

perhaps even from mexican, as well as central america. i think we should be smart to be prepared for that. why, why do you think there is such resistance among democrats for a while, and suggestion that, something like a drone could do the same thing? >> i mean it is political, right? i think on both sides of the issue. if you sat there, guys i used to work with in dhs in the boarder patrol or cpb, they tell you they want technology. there are certain areas want new or rebuild existing wall. couple areas where they want to build new wall. this is political. that is the problem we face with our immigration and customs enforcement system. no other issue is politicized as immigration. i saw it in i.c.e. from the left and right. politics on immigration frankly leads to bad policy. if we get politics out of it, we would have better solutions. charles: the solutions you like, including a asylum process

itself perhaps. making legalized process, all that is being held up too for political reasons. >> if you took the politics out of this i think you would see a mix. you would see a little infrastructure. infrastructure i mean wall. flir systems that they use to detect people and drones as well. frankly a lot more administration judges. people in the administration know this themselves. charles: the rules though, if i know i can come into the country, step one foot in here and get order that goes through the judge, that there is going, you know, i may not have to show up. again i think, so, what should the consequences be, and how much effort we should make sure that people show up for hearings? >> 90% lose the hearings. when you put them on ankle bracelet. charles: if i show i'm losing the hearing i will not show up. >> people are first incentivized to show up. put on ankle bracelet, 96, 97%.

when i showed up people didn't show up for hearings. i.c.e. is good at finding them. it is simple solution. if professionals got together, put a mix of what we want and what everybody wants, technology judges and border. charles: professionals do it, keep the politicians out. john, appreciate it. there is this, backbone of the democratic party used to be those union workers. our next guest says they have become an afterthought for the party. that for the democrats will be to their detriment. he will make his case next. ♪

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headline. dems' christmas gift to organized labor, pink slips. the op-ed was written by former trump campaign adviser curtis ellis. what exactly are you saying here, that -- >> i think he's getting retouched. charles: curtis? >> yes, i'm here. charles: you look great. tell us about this union story, though. >> well, look, the democrats used to rely on organized labor and organized labor used to have a strong voice in the democratic party. they provided the foot soldiers for the campaigns, knocking on doors, stuffing envelopes back when mail was a big part of a campaign, and providing campaign contributions. they also actually used to fill a lot of positions in the party hierarchy. no longer. now the democratic party has really forgotten the unions. they are an afterthought. the first bill that the democrats are introducing, hr-1 in the house, house resolution

1, has nothing in it for the unions. it's all about campaign finance and all these various issues, nothing about the trade unions, the people who want to build things. they are interested in infrastructure. they are interested in building pipelines, building highways, rebuilding energy infrastructure, building the wall, even. but you won't find any of that in the democratic party's agenda. charles: two things that occur to me. the union workers voted overwhelmingly for president trump, helping to turn some of those states that had voted for president obama back-to-back. also, the union leadership will still come to the aid of democrats even if the rank and file doesn't, despite what the supreme court says. >> you got that exactly right. there's a huge split within the labor movement between the leadership of the unions, which esconced in the afl-cio palace blocks from the white house is a wholly owned subsidiary of the

democratic national committee, and the rank and file union members who vote for trump carry guns, believe in god, go to church on sunday and are not interested in identity politics. they believe in america, and america first, not in this identity politics, globalism mish-mosh the democratic party now bows down to. charles: i have less than a minute to go. it is amazing that democrat leaders are now being more obvious about taking them for granted, isn't it? >> well, yes. look, i spoke with the union leaders during the transition period for the trump administration, and they want to build the atlantic coast pipeline, a bunch of other pipelines. they have a whole list of infrastructure projects that are high on their list that they want to see get done. unfortunately, the party's not interested in pushing that at all. charles: curtis ellis, you don't have to get made up for new year's, man. looking good right now. we appreciate it. great op-ed. see you in the new year. smoking with chantix.

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charles: good morning. it's 11:00 a.m. on the east coast, 8:00 a.m. out west. i'm charles payne. want to check on the big board. dow jones industrial average, off 65 points, grappling here, still showing some resolve. let's bring in michael o'keefe, chief investment officer, steeple. obviously the market has been all over the place. give us a sense of where we may be going. what does this indicate to you about where we may be going? >> we're at the end of the year. we are seeing a lot of volatility, kind of lighter volumes and some negative news pushing things around. our view looking into 2019 is we're up from here through the year. think of high return 9%, 10%. charles: the rationale, the fundamentals issue or a combination of the notion that maybe all the headwinds to a degree, a lot of -- some of the worst case scenarios being baked

in? >> i think of it this way. there are things we are going to work through in 2019. we will see brexit happen we believe with an agreement. we actually think u.s./china trade, there will be an agreement, concessions on both sides. things like that settling out. to your point, baked in already, that gives us a little upside. charles: one wild card will be the fed. we have seen it roil the markets. we have seen the markets in february go nuts because of what they thought the fed may do when we saw wages initially going higher, we saw that october 3rd speech from jay powell and then of course, we have seen the reaction since the last fomc meeting. the fed has put more pressure on this market than anything else and we are still not clear at least confident that jay powell maybe gets the message. >> yeah, that's right. i think of it this way. the fed has been inside, they are kind of academics, data dependent. charles: isn't it why we were supposed to love jay powell? wasn't a classically trained economist, he understands wall street and maybe even the implications to main street for some of these actions?

>> yeah, that's right, but i think the issue has been about communication. they are a little bit slow to sort of signal what's going on. when we look at the market, market's calling for zero rate hikes in 2019. fed is calling now for two. we are sort of in the middle at one. charles: should jay powell, if president trump requests, meet with the president? >> yes. absolutely. again, i think there's a separation there, it's an important separation but at the end of the day, the president's job is to sort of rally for the economy, rally for a strong environment for that, and that's what he'll do. charles: i like what we have seen in the last couple days. we know there's thin volume out there, a lot of people aren't around but the idea we had the biggest point gain, then one of the biggest intraday reversals ever shows a certain amount of resolve. we need to see that. the market has to be tested. we need those hurdles from time to time. what struck me is materials led the way, industrials led the way. can we have a rally without technology leading the way? >> when we look into 2019, we

are really looking at still continued earnings growth and again, prices baked in, some of this stress. we see upside and think it will be broad. charles: new leadership, you think, or same leaders? >> i think it's more broad. charles: stay right there, okay? we just got the latest read on the weekly oil inventory numbers. david's got the numbers. david: 46,000 is the draw-down. look what's happening, oil down a little bit right now. oil is just down 11 cents, $44. if you're looking for any sign at all of an improvement on the world energy front in terms of u.s. companies and foreign companies using more energy, you're not going to see it today. oil seems stuck under $45 a barrel. charles: i want to ask you about this. oil initially was thought to be a supply story. more recently thought to be a demand story, perhaps reflecting not only the global economy, but ours. what are we to make?

this is a huge pullback in crude oil prices. >> at the end of the day it is all about supply and demand. when we sit there and try to assess where we go from here, what we know for sure is the likelihood that we're right is very low, because demand kicks up, prices tend to go higher, supply kicks up and they will fall. what we tend to do in addition to, you know, thinking about our investments in oil is to think more broadly about the economy. the idea of oil prices being low isn't all that bad. you've got lower gas prices, for example, for the consumer, a happy consumer right now and low gas prices helps fuel that. no pun intended. charles: there is something to be said about the self-correcting nature of the industry. there are certain levels where you have to close down the spigots, shut down some of the rigs. i'm not sure that's happening yet but at some point, they have to do this. >> it isn't on and off. it sort of, levels have changed. take shale, for example. lower the fiscal stress on shale when prices are lower, is pretty significant. charles: the biggest story you

think next year, what do you think ought to be? >> what i like to think is the biggest stories will be positive stories coming out of what had been the negative stories in 2018. charles: resolutions. >> absolutely. charles: i love that idea as well. but i also love to be quite frank with you, the low expectations. i love that we know earnings are going to be lower, okay. we've got it, check. there's a lot of room to beat some of these lower expectations. >> again, in some ways it's about the resilience of our country and our economy. we have a lot of good innovation and you know, again, positive looking forward. charles: michael, thank you very much. great talking to you. now there's this. the number of billionaires around the world on the rise. david, how many billionaires are there? david: well, in the united states alone, we have 585 billionaires. can you imagine? 585 billionaires just in the u.s. alone. that's a 4% increase, by the way. steve forbes, who always puts out these kind of numbers, says what's just as important as the new billionaires are the ones

that are taken off the list. it's not just the new entries, it's the one off. there's a lot of movement in the united states. russia and china, they have a lot of billionaires, too. but what interests me more is what's happening in india. india has a 19% increase in the number of billionaires. in china and russia, a lot of billionaires rely on their relationship with the government, they are buddies of putin, that's why they're billionaires. india has more of a free market. that's why it's interesting to note the countries that have more of a free market where the number of billionaires is really on the increase. it may be an outlying factor but an important one. again, the united states leading the pack, 585 billionaires right here. charles: great number. of course, we didn't talk about europe, which maybe it could be a whole new segment. another one, millenials now are showing, make up the largest part of america's work force. a lot of them choosing freelance work. what does that mean, just freedom of movement? >> we were talking about the american dream earlier in this show, and i think, and i think

you would agree with me on this, the american dream is the ability to work for yourself. it's harder, you never have a day off, you never have a minute off. nou th you know this. you know it very well, having your own business. but it really is an american dream. it used to be back in the early 1900s, 50% of the american work force were working for themselves. by the 1970s, 1980s, it was only 7% of the work force. right now, there are over 50 million americans working for themselves, not because they have to but because they choose to. these are americans mostly, some have to, but most of the americans who are working for themselves now choose to do so. leading the pack are the millenials. i think they got it. i think they got the idea of the american dream, to work for yourself, to work independent, to pull yourself up by your own bootstraps. that's a wonderful part of america and thank goodness the millenials are clued in to that. charles: i love that idea as

well. thank you, david. let's check on bitcoin, speaking of millenials, because this was one of their favorite investments. you can see it's up 270. they haven't given up on it. we just flashed the markets but also check on gold which has had a pretty good run here recently. something of a safe haven, if you will, as equities became very rocky. then, of course today is amazon's digital day. amazon lowering its prices on just about everything digital, e-books, movies, games. we will be joined by a spokesperson for amazon fire about how amazon is changing the way we experience entertainment in the home. remember, it's day seven of the partial government shutdown. there is no end in sight. congress is out of town. should president trump try to reach a deal before the democrats take control of the house next week? we will talk to the rnc next.

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charles: now this. the federal government keeps racking up the bills, adding another $1.3 trillion to the debt in the last fiscal year. that's an increase of 6% which is the largest percentage increase since 2012. in total, the federal debt, nearly $22 trillion. it's day seven of the partial government shutdown and

there's really no end in sight. congress out of town. joining us, rnc spokesperson kayleigh mcenany. lot of folks out there, little edgy on the republican side, thinking maybe president trump should try to reach a deal, particularly before the house takes control next week. what are your thoughts? >> president trump has tried to reach a deal. first of all, the $5 billion offer was a deal. he needed and wants $25 billion. when the democrats came back with $1.3 billion, president trump said let's get to somewhere about $2.5 billion, somewhere in the middle. what did democrats do? they didn't come back with a counteroffer. they left town. that's telling you everything you need to know. they own this shutdown. they own the problems on our southern border. they left town and went home for christmas rather than working for the american people. charles: what do you make of them understating the impact of this, saying we're for border security, but experts say walls

don't work, we need drones. an expert suggested maybe ankle bracelets will work. i don't know if the average american believes that. you know, they are just dead set against what they are call a medieval solution, the wall. >> right. they are dead set against it, except five years ago all 54 democrats in the democrat-controlled senate voted to double a portion of fencing along the border with mexico. they voted to end the diversity lottery system. they voted to end merit-based immigration and they voted for $40 billion in border security eight times what the president is asking for right now. so it worked then but it doesn't work now. what's the difference between then and now? president obama was president five years ago. now we have president trump and they don't want to give him a political victory and it's wrong for them to play politics on our border when we just had an officer die at the hands of an illegal immigrant in california. really tragic scenario there with the officer losing his life. charles: the juxtaposition of someone who came, waited a turn

to come to this country legally, become a law enforcement agent, to lose their life to someone who came into this country illegally, it gives me goosebumps. it's so heartbreaking. i saw the photos of him and his family in front of the christmas tree just moments before he eventually lost his life. it just doesn't seem to matter, though, because one of the things, in fact, there's a poll out there now suggesting that president trump is more to blame for this shutdown than democrats. it's a reuters-ipsis poll. it's high 40s versus 33. when it comes to the public relations aspect of it, the politics of it, will this sway the white house at all? >> it won't, because here's why. shutdowns come and go. we have had many of them. there were eight during the reagan years. they come and go and people forget about them. what they don't forget about is border security. what they don't forget about is the officer standing there with his 5 month old baby and wife who lost his life. what they don't forget are caravans approaching our southern border with criminals

among them. that's something that will be a live issue until 2020, so the president is playing the long game here and saying i want to be on the side of border security, unmistakably so. if that means a short-term government shutdown, so be it, no matter what the polls say. charles: could this actually also be an opportunity for the grand bargain of them all? bring back the daca situation, get something close to that $25 billion? the ultimate deal, close the loopholes, the ultimate deal to settle an issue that both sides have agreed is a problem for a long time? >> i think that's exactly right. that was a deal that of course we remember president trump offering just last year. he said i will budge, i will give you daca legalization if in exchange you give me the border wall and end the diversity lottery. that, if we are talking about polling, according to the harvard harris polling, a majority of americans support that. it's a very fair compromise, one which nancy and chuck rejected. will they come back to the table or continue to use daca

recipients as pawns. charles: let's hope. kayleigh, belated merry christmas and happy new year. always great having these conversations with you. >> thanks so much. you, too, charles. charles: well, nike says it plans to release a new smart shoe in 2019. it will include technology designed to improve athletes' performance. the shoes are expected to start at $350. david asman doesn't need his. he's got the old chuck taylors and they are working just fine. meanwhile, nike stock relatively unchanged. take a look at apple. the company lost $9 billion this year buying back their own stock but i got a feeling they will continue to buy it back. meanwhile, t-mobile want to expand beyond cell phones. their ceo saying that his company will debut its table tv competitor sometime in the next year. of course, they haven't released any details on what this new tv service will look like or how much it costs.

we'll see. wall street bonuses are expected to rise this year. david, golly. the stocks are down, the market is down. david: i could trade in my chucks for smart shoes if i was a private equity guy. private equity, by the way, their bonuses are going to increase 5% to 10%. they are only the second highest. the highest are professionals in sales and trading. they are going to get bonuses of between 15% and 20% more this year than last year. the third, coming in third are investment banking underwriters will get a 5% to 10% increase. investment banking advisers may actually see a drop in their bonuses somewhat. but all these folks who are getting an increase in their bonuses, again, we scoff at a lot of these people saying geez, they are already making million dollar salary, what do they need bonuses for, lot of them depend on bonuses for the lion's share of their income. charles: got to fuel your jets. >> exactly. got to fuel the jet.

the problem is next year is likely to be a very different story. as we all know, the markets are going through trials and tribulations that will probably reflect themselves in 12 months from now in terms of the bonuses. but there you have it. that's where the money is. charles: yeah, it is. got to tell you, you look at the stock performance, you look at the market performance, even returns to their investors, it seems crazy when they get these bonuses. david: it really does. charles: thanks, david. in california, outgoing governor jerry brown is warning his fellow democrats in the state to not go too far to the left. jerry brown saying that. he says there would be too much spending and this really is something, a hit at bernie sanders. think about that. we will talk to our leading voice in california, one of the few sane folks out there. just joking. blue lights falling on new york city in the sky last night. that was weird. so many conspiracy theories. david: my daughter was on the subway when this happened. she didn't know what had happened in manhattan. charles: it's amazing.

it's beautiful but also ominous. turns out it was a blown transformer in queens. the explosion caused scattered power outages in the city, including laguardia international airport which really needs a power outage. of course, it resulted in multi-flight delays. thankfully, overall, nobody was hurt. beautiful image. more "varney" straight ahead.

charles: you know, it might be the end, folks. we're talking about sears. the company doesn't secure financing by the end of the day, it could be forced to liquidate. we have jeff flock live at sears

in chicago, which is appropriate. it was chicago for a long time, wasn't it, jeff? reporter: oh, it was. i tell you, this is an appropriate day, too, charles. cold, gray, windy. this was the sears of six corners, one of the flagship stores, closed already. one of hundreds that have closed. as you point out, today's the deadline. 4:00 p.m. eastern time, if they don't get a bidder by then to keep the company open, they may have to liquidate what's left of it. eddie lampert, the former ceo, is the only one who says he will make a bid but hasn't done so yet. $4.6 billion is what he's offering but he doesn't have the financing for it. he hasn't put much of his own money into the deal. if nobody else comes forward, they could today announce they are going to liquidate. liquidate the real estate. this is a big building in chicago but is it worth much? at the six corners location here, across the street you see already there's a development project that is dead in the

water. across the other way, a store for lease. across there, another store for lease. right over here, a big empty building. is the real estate for sears really worth a whole lot? in some cases, maybe a little bit. in some cases, no. we are going to know by the end of the day unless of course they extend the deadline again but i don't think they got much more lives. i think eight of the nine lives are pretty well dead. charles: i remember when alexander's was going through something like that, the stock was turning around $2 a share. they became a real estate company and went from like $2 a share to $400 a share. it all -- reporter: that was eddie lampert's vision. charles: it was, right? reporter: could that happen. exactly. i don't know that there's much real estate that's worth a whole lot of money left. that vision may not prove fruitful. charles: you know what's worrisome? when lampert makes his move, they were calling him the new

warren buffett. he was getting a lot of financial tv and a lot of people poured their money into sears. it's a shame that it's been pulled apart the way it has been. it's been poorly run. they never got experts in there to save this company. it's really a shame. reporter: they didn't invest in it. this is a store that's been here since the '50s. it looks the same as it did in the '50s. they haven't invested anything in the stores. david: what it shows you, this is the year when we saw ge and sears, two companies that many people thought would never fail, you know, 20, 30 years ago, everybody said they were going to be here forever. you know who knows that, jeff bezos. jeff bezos gave an interview a couple years ago, he was asked is your company going to be around forever. he said no company's around forever. every company, what happened to sears could happen to any company. charles: you definitely have to reinvent yourself. jeff, just want to let you know, we know 30 degrees out there, we have seen you through everything this year.

word just came in, you're the fox business daniel boone man of the year. reporter: oh, my gosh! daniel boone! charles: no one weathered the elements with the bravery and resolve you have. congratulations, my friend. see you in the new year. reporter: i'm going to take that to my grave. thank you, sir. charles: by the way, today, speaking of amazon, is a dismgil day. we will discuss how we all experience entertainment in the home. the market relatively sideways right now. we will talk to someone who says we haven't hit the bottom yet. that's next. ♪ (engaging uptempo music)

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charles: all right. check on the big board. a lot changed since the opening bell here. we're not off a lot but certainly more stocks are in the red than the green. intel leading the way. goldman sachs, which continues to be a yellow if not red flag to the markets, not sure what's going on there, but it should not be down this much. our next guest, in fact, says the market has not reached the bottom yet. jonathan hoenig, capitalist pig hedge fund manager. where do you think we will go from here? >> you know, charles, they say it's the path of least resistance. that's what markets tend to follow, the path of least resistance. for now, the path of least resistance, in my opinion, just remains down. these are truly historic unparalleled stock market times. we have gone from oversold to overbought to oversold again in basically the last 48 hours. this reminds me of an old saying, when elephants are dancing, mice get trampled. i think we are all mice when it comes to the market. when i look at yesterday's actions, almost 500 new 52-week

lows, only four or five new 52-week highs, the trend for most stocks is down. yet there's a lot of negativity out there, lot of people are very bearish. that is bullish. but until we actually start to see prices turn around, you have to be very careful about putting a lot of bids to work in this market. charles: one new high on nasdaq versus three new lows, it's a pretty ugly breadth. do you make anything of the resolve we have seen over the last 48 hours, the biggest point gain ever and i think that reversal yesterday into the close was pretty remarkable. >> yeah. yes, charles. you know, it always comes down to our individual context. if you are three, ten, 15 years from retirement, a couple hundred point swing shouldn't make a difference or impact. but the fact some stocks are beginning to show some, try to at least show some semblance of stability here gives a little bit of fuel for the fire for the

bulls. they say bull markets are built on doubt. bear markets are built on hope. i still think we are seeing a lot of hope that this bear market becomes a bull and prices at least at this point just aren't indicating that it's changed. charles: we had a guest on earlier who thinks we have hit the bottom in part because of a support number he saw going back maybe four or five years. my question to him was okay, i understand, although listen, for the most part we threw charts out the window because they just haven't worked. he wouldn't really or couldn't really answer what would happen if we broke that support point. worst case scenario, again, the path of least resistance, where does it lead us? >> well, for me, the worst case scenario is even if a stock goes down, we can always protect ourselves. we use stop loss orders, for example, with any stock in our portfolio to protect against the downside. i think for a lot of investors, the big fear actually should be more like what's happened in japan over the last 25 or 30

years, essentially a stock market that goes nowhere. it brings me back to, i think of for example microsoft for a decade after the tech boom in 2000, it was essentially dead money. that's my fear, not necessarily that the stock market plummets or crashes. that tends not to happen. but that stocks like facebook, like amazon that have been such integral parts of people's portfolio essentially become dead money for two years, three years, five years or longer. that's where the real opportunity cost is lost. charles: yesterday, it was material names, chemical companies, defense contractors, procter & gamble, kimberly-clark. are those names capable of being the leaders or are we in a position where it has to be leadership from those key momentum names? >> where are the key momentum names anymore, charles? i would like to find them. we're looking for stocks that are actually doing well. before october, remember it was a lot of pharmaceutical stocks who were leading the charge,

taking up a lot of momentum from a lot of tech names. that's really been thrown out the window as well. even some of the real estate and utilities, those defensive names have also done poorly. you know, i quote gordon gekko who says i look at a hundred deals a day and i choose one, and i would be very careful about where i put money to work. as you point out, quite simply, not a lot of stocks are doing well right now. charles: jonathan, thank you very much. have a great new year. speaking of amazon, today is digital day. they are lowering their prices on just about everything digital. e-books, movies, games. joining us, amazon's fire tv spokesperson. kim, explain to us digital day, just how big is it? >> hi, charles. this is our third annual digital day and we are offering thousands of deals on digital content. so you will see up to 80% savings on categories like e-books, movies, tv shows, apps

and games. charles: but so, is it something, the deals, we have been getting deals since the day before thanksgiving. the day after thanksgiving. cyber monday. the day before christmas, the day after christmas. what's the distinction here? >> so this sale is really meant for, you know, everyone that got new devices over the holidays. so it's a chance to load up those new devices with great content. charles: talk about these new devices, because amazon's saying they're changing the experience in the home. listen, amazon has been successful at a lot of things. on the hardware side, though, i'm not so sure. the home is where it's at. everyone wants a piece of the home. we know alexa has done very well. what's the difference? what's going to be so amazing that we are going to have amazon in our homes whether we like it or not? >> so today, the deals that we have with digital day are focused on digital content.

as far as the devices you may have in your home, these deals work great with movies you may want to watch on your fire tv, for example, or games you may want to play on your fire tablet or books you may want to read on your kindle device. that said, all of these deals also work on non-amazon devices. if you want to read from your kindle app on your android phone, you can do that. you know, it's a one-day sales event really for digital content that is for anyone, whether you have an amazon device or not. charles: i know it's early in the day. you have any numbers? how is it being received so far? >> i don't have any numbers to share, but so far, sales seem to me to be on par with last year, and last year we had really successful digital day, with millions of digital items ordered. charles: well, thank you very much. we appreciate it. you know, i'm long amazon stock so maybe this might get sustained movement. thank you very much. happy new year. >> thank you so much.

happy new year. charles: we have more on amazon. david, there's talk of a fake alexa. david: it's very appropriate following that interview, because she's talking about they are putting stuff on sale that goes into alexa and other amazon items. there's a problem there. if you go into the app store and see something called setup for amazon alexa, lot of people have just had alexas for christmas, avoid it like the plague. setup for amazon alexa is a phony site that you go in there, when you launch the app, they ask you for your i.p. address, for your device's serial number, for all sort of specific information, then they just vacuum cleaner out everything they can from your device. god knows what kind of information alexa can keep. we have learned that it can keep a lot more private information than anybody guessed when it first came out. so setup for amazon alexa is a fraud. avoid it. don't get it. check your amazon dealer for specifics. charles: great, great stuff.

now there's this. the head of the fda, scott gottlieb, plans to meet with top executives from e-cigarette companies. what is this about? david: he thought he had an agreement with e-cigarette makers that they were not going to be targeting young people at all, or that they would do everything they can to dissuade young people from getting into e-cigarettes. as we know, it's become a big fad now, particularly among high school students who go out there. some joy that they get and eventually become nicotine addicts even though it's not as bad as cigarettes, it still becomes an addiction. he has said there's no reason manufacturers must wait for the fda to forcefully address the epidemic, yet some already appear to back away from commitments made to the fda and the public. this is a shot across the bow from the fda saying look, you guys, you have got to do a much better job of keeping e-cigarettes away from young people. if you don't, we are going to force you to do it and take away your right to produce these

things. charles: that's a serious warning, especially after that big acquisition. david: absolutely. charles: thanks, david. check tesla. they have added two new people to the board in response to that settlement with the securities and exchange commission. larry ellison, kathleen wilson-thompson both added to the board. ellis jo ellison, executive chairman of oracle, huge name, the perfect personality to go with elon musk. then wilson-thompson, who will bring a certain amount of adult supervision. she's a top walgreens executive as well. california outgoing governor jerry brown is warning his fellow democrats in that state not to go too far left. he says there will be too much spending. many think this is really a hit at bernie sanders. that's not all out of california. some democratic lawmakers want to pass a bill that will require all california adults to buy health insurance. you can't make this stuff up. we are all over it, next. ♪

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lithium extraction technologies and standard lithium leads the industry in the application of these processes. learn more at standard lithium com. david: epic games raked in $3 billion in profit this year. "fortnite" now has an estimated 125 million players around the world but epic is looking beyond "fortnite" just launching an online gaming store to reap the benefits. outgoing california governor jerry brown is warning his fellow democrats in that state to not go too far to the left. now, he's saying their policies may be too far out of the mainstream for most californians. let's bring in larry elder, salem radio nationally syndicated host. when jerry brown warns you about something being too far left, you must be too far left. >> it's a sign the apocalypse is here. you've got some left wing

governor -- he earned the nickname moonbeam for a reason. he pioneered the california bullet train to nowhere. he believes climate change is a bigger threat than maybe al gore does. taxes were raised during his eight years, regulations were imposed during his eight years and he's now warning the super democrat majority legislature in california, don't tax so much, don't spend so much, don't regulate so much. david: larry, david asman here. before we give him too much credit, didn't he just announce he wanted to use taxpayer money to put a satellite up in -- as you say, they can't even get a train working, and he wants to get into the space race? >> well, that's right. as i said, that's why he's earned the nickname governor moonbeam. but even when governor moonbeam says we're spending too much, taxing too much, it seems to me the bernie sanders, alexandria ocasio-cortez wing of the party ought to take heat. david: it reminds me of when george mcgovern retired from the

senate and spent all of his money on a bed and breakfast in connecticut, his life-long dream. lost his money, said i regret when i was in the senate i did not appreciate the impact rules, regulations and laws and taxes have on people running a small business. had i known this, i would have been a smarter legislator, i would not have burdened people that run businesses so heavily. my goodness. i suggested that the republicans invite him to speak at the rnc convention. they didn't listen to me. david: i published that piece. it was the late '80s. >> it was. charles: what part of this political brinksmanship, the establishment democratic party trying to cut off the bernie sanders wing? is this an economic epiphany or are they just trying to hold off the upstarts here? >> i really think that jerry brown has gotten more realistic as he's gotten older. he's in his 80s now. the moonbeam title he earned in the '70s, the first time he was governor of california, this time he's been even more responsible with spending than even the left wing democrats

have been. he's restrained them. he hasn't stopped them but he's restrained them. i really believe that jerry brown thinks the agenda of a $15 minimum wage, college-free tuition, guaranteed jobs, universal coverage, i think he thinks it's gone too far or maybe too far, too quickly. i don't think he's opposed to the goals. i just think he thinks the democrats are way too aggressive and could run into problems in 2020 if they nominate a bernie sanders-type candidate. i think jerry brown is warning them against doing that. david: another one for you. some democratic lawmakers in your state want to pass a bill that would require all california adults to buy health insurance. what do you make of this one? >> well, scombrouvebrown just c mandates and here we are. 60% of californians are opposed to a mandate for health insurance but the majority of californians want universal health care. go figure that out. david: what's happening with the millionaires whose taxes pay for

california politicians to be so frivolous with the money? it has become so concentrated, the tax revenue, in the rich, if you just get a quarter of those people moving out of the state, won't it go bankrupt? >> you're right. it's a real problem. but being rich means that even if you are heavily taxed, you are still rich. a lot of left wing rich people are remaining here. bill maher even criticized the taxes in california and even said on his show, you could lose me because the taxes are going too high, end of quote. at some point, you can't get more money out of rich people. they don't get rich by being stupid. they know they can go somewhere else like texas and other states that have low tax burdens, and a lot of wealthy people have done so and taken their taxes and their republican votes with them which is why california republicans are now outnumbered by those who are declined to stay or independents. they are outnumbered three to one by democrats because a lot of republicans have left the

state. charles: glad you're still there holding down the fort. we know it's a lonely job but someone's got to do it. happy new year, my friend. >> the watchman never leaves his post. charles: like the old maytag repairman. we know 2019 is shaping up to be a big year for the marijuana industry. some analysts say that it could lead to record sales. we have your 2019 cannabis forecast. that's next. ♪ my experience with usaa has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's

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charles: 2019 could be a big year for the cannabis industry. states like new york considering laws to allow recreational use

of marijuana. want to bring in ryan smith. how does that work? >> so we are b2b wholesale marketplace. we connect brands that are selling packaged products to retailers across the country. charles: right now, different states have different laws. >> exactly. charles: so that makes it complicated. probably helps your business, though, right? because you hash all that stuff out? >> that's right. products can't cross state lines so we really are a collection of 14 different state marketplaces. if you are in colorado, you can't see things for sale in california. charles: are we allowed to bring in canadian marijuana? >> no, it still very much has to stay within a state. charles: we know cannabis is hot. particularly a lot of folks who were early in the year big investors in crypto currency, kind of shifted over. now some of the cannabis stocks have been under pressure. they are off their highs for sure. still some pretty high valuations.

seems like one of the issues, when you become a publicly traded company, things change. you have to execute. there are earnings estimates and things like that. you have to live up to the hype. the hype is pretty high. >> yeah. the rules still apply. difference with crypto is this is a proven product and proven market but it still has a lot of maturing to do. until that happens, there's a lot of proving that will have to complete before any of the numbers really begin to make sense. charles: talk about potential milestones for 2019 in the cannabis industry. tick some of them off for us. >> two of the most exciting is that over $10 billion in institutional capital from real names like altria and constellation came in this year. more of that will happen. i think that's going to really set up the falling of the east coast to be either medically or recreationally legalized. charles: new york being one of them. >> cuomo was talking about this last week. charles: what happened to cuomo? he didn't like it, now he likes it. is it money, the potential taxes, too much for any governor to ignore? >> yeah. the tax revenue is something you can't deny and it's a proven model now. there are ten states that are recreational legalized and for

you to not admit that that's something that's an asset to the population, people are coming around. charles: big story today, the shottenstein family in ohio making a hostile bid, $2 billion deal, canadian deal. you have a billionaire family in ohio making a hostile bid for a cannabis company in canada. this is big stuff. >> yeah, but they have had some really negative press recently and i think that's shaking out with this accountability that now exists, it's really important for the space. people got overly excited. charles: now you have an established family, an american family with billions of dollars saying okay, we want to take advantage of this weakness because we still believe in the overall opportunity. >> even more, that they go forwards a company that had a rough year and thinks that's opportunity is an interesting approach. charles: ultimately, ultimately, because i spoke to a lot of bankers, i was just in switzerland, everyone is interested in this. everyone around the world is looking at america, ultimately federal, breaking down these

federal rules to allow interstate banking so it's not an all-cash business, that would make this explode. >> safety is a concern for a lot of our clients. we think cannabis clearly in the lead. there's more capital there. for it to be this entrepreneurial capitalist society, we should embrace what the population wants which is legalized cannabis. charles: i know you are making a lot of money either way right now. we will definitely have you back on soon. thanks a lot. appreciate it. we're not done yet. more after this. ♪ . .

charles: amazon, sinclair broadcasting are reportedly in talks to buy the yankees, the

yes, sir sports network, not the team -- yes sports network. due to higher labor costs and some modifications they have to make, i have to tell you something, david, the big board. blake: we're up 68 points. we find a way to come out of the red. >> so many analysts i have had on, you yourself are saying for a long time, swallow bad news at the beginning of the trading day. when that turns into good news you're perhaps on the right track, perhaps this market found a bottom. jonathan hoenig thinks that is ridiculous of course. other people think it has. charles: there is the oldest adage, buy low, sell high. for foilings say we have to take out tops. go up another 3,000 points to say the worst is over, those are serious gains you're giving up. >> i can't believe there is anything on the economic horizon that can't be beat in the long

term by the stock market. it even happened during the great depression. if you're in more than a year or two now looks good to me. charles: greatest money making machine in the history of the mankind. thank you, david. blake burman in for neil. blake, take it away. blake: even day on corner of wall and broad. up 60 the dow is. welcome to "cavuto: coast to coast." i'm blake burman in here for neil cavuto for one more day. it has been a wild swings on wall street. the dow is on pace for the worst december since 1931 and the worst month in about a decade. to market watchers, dan shaver, todd horowitz if they believe the volatility is here to say. hi, guys. >> hey. >> what do you say, blake. blake: todd, start with you. this has been even keel sort of day. what do you make of it. >> i've been trading 39 years as a