[laughter] hey i'm going to end on optimistic slow down growth not same as recession showing positive into the new year. >> and it was a pleasure having you and you and you here happy new year everybody. happy new year and charles payne take it away he's in for stuart varney. >> happy new years. i have a bunch of big stories we're following for you today a final trading of 2018, and a looks like right now rear going to finish year with a pretty nice rally started that way down almost 200 points all morning long and this is a new reason why. new reports that china and negotiators hard at work with right now earning out of framework for trade deals president trump tweeting over weekend growth just had a long and very good call with president xi of china. deal is moving along very if made it will be comprehensive covering all subjects areas and point of disputes. big progress being made in other

news a big cyberattack on some of the country's largest newspapers. causing publications delays over the weekend we're going to tell you what's going on there and lifeline for obamacare in texas, the judge who ruled that the affordable care act was unconstitutional. agreeing to save his decision from taking effect until it can be appealed your new year's eve edition of "varney & company" stats right now. ♪ well they're ringing in new year and other side of the world new year's eve celebrations already sydney, australia always a festive to time get exciting watching come our way. meanwhile the market opening is coming or way right now stock futures are moving higher all morning long. wrong optimism about potential deal with china on trade joining us economist all right peter you

know you've studied this as a much as anyone else you'll understand ins and outs of it we've been told a it can never happen. b whenever there was good news to be, you know -- not even trust verified but sort of rejected out of totally rejecting but now hearing more people actually encourage by all of this where do you ?and >> president is under enormous pressure as this president xi to come up with a deal by march one. for different reason ares, and it is in president interest to comp with say a framework deal to hold off mr. trump. mr. trump wants to get trade off a the agenda now because of the stock market because he stake so much of his presidency in economic program on vitality of the market my concern another deal isn't that what we have with south kreag and now look, no we're making no progress. my feeling is that with china, it's going to be very difficult to come up with a deal in the first place, an i'm very skeptical about what they're cooking up at moment.

>> well what are they cooking up in your assessment? >> they're cooking up probably commitments to make progress in a variety of areas commitments to make progress for example on foreign ownership in domestic market. so much of what they do to us is administrative trait in nature unless you have specific bench marks with regard to trade and so on and so forth they will find a way around it. look at the cybercommercial espionage deal of 2015. now it is turning out to be as wortless as some of those nuclear arrangements with russia back at it again. the bottom line here, they're very bottom line, is that china fund mentally criminal regime it doesn't believe it has to play by rule ares of civilized nations or use us as uncivilized as a war cheating stealing lying anything goes this is like chamberlain dealing with hitler skeptical and disappointment in the president of the united states listening to secretary

munn chin and not having put in place the tariffs in december as he promised. >> wow you've leveled heavy things to some really heavy -- comparisons here. >> i have but think about -- it think about the history of our relationship with china. it's a fact that it is still in south china sea on islands and you know -- >> those islands right let's face it. i mean, it's -- i'm pretty confident in lighthizer i like the idea of the good cop bad cop when it comes to mnuchin and -- it's -- things you're looking for lighthizer who has been through this before, would probably make sure that they're part of the eventual deal. >> i know lighthizer i know him well playing this game for 20 years he's a good a guy as they come but i understand better than anybody you can interview, the limitationings of trade agreements. i wases president of creation for cafta, with nafta europeanen

union and so forth. i mean look at my background i have written a tenure -- >> brought you on. but point is that, where we've had tried to deal request systemic problems, with societies that are not market oriented for example japan and it has been very, very difficult to reduce to behavioral norms on the part of the other country actions which are necessary to mitigate the trade problem. that's the issue here. with that a real will to reform and it isn't present in china because they're winning at this game. that they're going to do it. instead what i would advocate what a i suggest to the white house was that we basically you know, set this up in a way that they're a trade based goals. so that you know, essentially compliance is linked on parking lot deficit specifically coming down. now what i don't want them to come back with is a deal to buy 1.2 trillion of u.s. exports more soybean than natural gas

that's not where the future is. >> peter you know what you made fast fantastic points we've marked them down we appreciate your exper buddy see you again in the new year. >> okay take care. stay on trade and bring in market watcher a rough mopt for the market for a variety of reasons. the last week, though, after a christmas wases i thought very compelling we have interday reverse les in market one 100 point rally with hour to go in trading to me suggested a least there's tire kicking going on right now. >> volatility the extreme volatility and a lot of what peter said was great. in terms of everybody trying to figure out what is happening since president trump has made the stock market of barometer for his presidency a lot of people he's -- he has the tendency to use things like a call. it say he's optimistic.

>> there's a kiewl on friday or he could have made call announcement today not own saturday and have to wait 48 hours for market i think that's a unfair i hear people tweet about that and say that. and in fact it if president trump put the stock market above everything else, he would have never gone into this trade are battle in the first place. he didn't ever call out powell in the first place i think he thinks market is a great barometer of this administration. but i think he sees trade and ed if as bigger issues. ming well yeah i think well, i agree with the fact that he thinks that fed is a bigger issue there's no question about that. i also a believe that the president didn't believe that the stock market would be this impacted by the potential of a trade war. although ting that market has been hit far more by feds in trade we can go the worst days at 5, 6 worst days in this week, this year only one to china i think were fed related but be that as it may. this was good news this was economist on the weekend you

talk about elitist old school, you know you never have tariffs kind of thing. almost every article china is ready to make a deal. the attitude change ad dramatically in last year they're ready they're own a cut. there's a lot of nonbelievers here say we're going to get a deal now. >> there are. here's the way i look question need a deal i want a deal i think it would be better for everybody. but, there hasn't been anything specific as far as what i've seen anything specific detailed or documented as to what a exactly is going to be inclusive in a deal. so i'm not going to hold my breath until they start to roll out some details and then when they do -- >> i'm glad i hope the white house doesn't start to play the wall street game of -- rolling out every little nuance detail that's not what this negotiations about. so large and so big i think they've overspoke already. ting they've gotten into commentary too much to be frankly to you. i do like the fact at this time xi was on same page as president trump. when trump said it was a great progress and great call, xi also

said that we reached vital stage both leaders now speaking in unison there's not a week delay or speaking in the same voice i think is pretty good. let me ask is you quickly because amazon expect one of the names that leaves this market been under some pressure a big deal talking about this whole food expansion. what do you make of that is that a great science with amazon or better process for the u.s. economy? >> i'm still blown away by whole foods that has been iconic company and really, really impressing me. i think what amazon doing is doing here is brilliant by their 475 stores or that are expanding stores they want, they want delivery within two hourses of everybody in america maybe in the world eventually. i think this brings the prime clients in to a overwhelm foods for the deals and then the clients who come into whole foods that want the deals that. the the -- want the savings will sign up for prime and the delivery is being rolled out in almost all

of their stores i think it is brilliant. >> are we seeing this yet or still to come? >> i think they are there. i think they were there at my opinion was they were there from day one. i think, with i think amazon -- saw the sign of the times saw where whole foods was going, they're going to start building bigger stores 45,000 and bigger square foot stores to accommodate a percentage population is migrating to whole foods and amazon is there it is brilliant. stay right there jeff check on equity futures because -- again dow has been pup, mostly around 200 all morning long. you'll see right now 191 nasdaq getting a little bit more momentum there. hey by the way speaking of hot momentum netflix they have a pretty good weekend you know their new movie bird box starring sandra bullock breaking records 45 million accounts watch this movie over the weekend. now these translate into the box office sales numbers qowb absolutely huge.

netflix is giving a big movie studios run for their money. great way out the gate. other news government shutdown now entering 10th day there's no end in sight. president trump is digging in his heels on wall and blaming the democrats and, of course, 2018 was a big year for the exodus from states could we see even more flee high tax states like new york, california, my state new jersey. we'll have that rhetorical question, next. hey, who are you? oh, hey jeff, i'm a car thief... what?! i'm here to steal your car because, well, that's my job. what? what?? what?! (laughing) what?? what?! what?! [crash] what?! haha, it happens. and if you've got cut-rate car insurance, paying for this could feel like getting robbed twice. so get allstate... and be better protected from mayhem... like me. ♪

all right checking at futures up 200 points nasdaq getting a little momentum up 54 when i came upstairs s&p also all of the three major higher. also going to watch the russell closely because they have best session on friday as well now some americans are saying no. to high tax states, in fact, moving to nevada, texas, washington, they have no state income taxes joining us now clinton doug, you see this continuing in the the new year and the consequences of it because i know 19 in 1950 in new york state for instance had had 50 congressional, now that number is on the cusp of being 20. right i think more likely than not will be 20 because i don't see this being abated. the limitation on state and local tax deductions means that for many high income earners it has gotten even more expensive

to live in new york city and state and you know what, i mean i'm one of those act aively considering heading to a state you didn't mention, but relatively close, florida. >> well, we've got a lot of friends down there. but here's the thing this exodus began before the new blog, and you have these are are individual isly high tax states new jersey, with connecticut, california, and it feels like they get to a place where they've crossed rubicon all is involved with higher taxes, and essentially you've got bifurcated very well, wealthy heel who can deal with it and then everyone else. >> well that's right if you're say a hedge fund manager, self-employed an facing in new york additional 13, 14% in state city, and other local taxes versus no taxes in miement or fort lauderdale palm beach it is sort of a no-brainer better

quality of life down there for many. >> why do democratic politics get away this essentially they do. california there was a -- a mini revolt against new gas tax and able to charm their way in to explain i guess connected to climate or whatever -- and -- the populist put away pitchforks and a torches. >> there's still going to be, i think, a steady exodus because people are ultimately economicallyial. quality of life i think we both agree is not getting better potentially getting worse. it is a better quality of life in those low tax states for many. and it sure a lot less expensive and i think that the exodus will continue. i don't anything changes charles. >> at a park had a different lot so i walked a few extra blocks and amount a of rats that i counted on my way from the garage to the studio mind boggling ugly stuff.

>> my friend from out of town who park in midtown in iron lots come out smiling and say, what i just paid in parking is rent are back home. >> all right let's talk about about 2020 -- with dem because elisabeth wash getting close we are this pex popular story committee you know feels like she's going to run raised a a fair amount of money. >> pretty clear she's going to run. you know what we want to make an assessment how are we looking here? >> look there's going to be someone who emerges one either in new face or second, a progress five or both. she's trying to be it shall the person who checks both boxes. foot in both camps with bernie catch or -- >> new face camp, and feminist camp maybe three camps, she had at problem with that dna test she took. she did it trump pass which tonight work out so well for her about her native american status but i think she figures out on campaign trail starts bashing

the big banks and financial institutions, all will be well. >> all right so you've got the traditional republicans, that probably now, you know, sort of clinton which is considered in clinton -- democrats wrath e? >> there are bernie democrats an new -- called new socialist democrats socialist wing. >> who has got momentum who should be representing in your mind the party in 2020? >> those are two different questions the momentum is with progressives it is not at all clear that they have the votes at this point to dominate the process. but in terms of new policies like medicare, for all -- it is clear they're the the one withs driving that bernie and his -- 15 a dollar minimum wage that is coming from -- >> what box is checked for all of them in other words if you feel like they're all taking medicare for all now.

well, even president obama himself on that bandwagon i think attacking rich that's on a democratic particularly after these tax cuts. so there are certain things that they're all going to run on no matter what. one big thing you haven't mentioned. opposition to donald trump. they are going to compete to impact trump as viciously and violently as they can, and i think that's where much of the energy for impeachment is going to come from. the 20, 30 odd candidates considering or actually planning to run. >> how do you -- how do you narrow that down? i mean really how can you again going to be at least two dozen candidates perhaps, right maybe more. what's the process? >> sure, well there's something called the vein isable primary that comes first. which is who will donors go to if you can't raise money, you can't run. unless you're bernie who can in small amount as but not small or big amount as you're not

competitive. i think there will be a win outprocess and question of who breaks through in the polls then it's who does well in the first couple of states like iowa, new hampshire, south carolina, and then supertuesday on march third. >> well glad you're here to shake that out invisible primary involving money. love it happy new year are. >> another look at the futures opening up for trading and just ten minutes. again looks like we have a pretty robust start to session by the way new reports out that a l might be getting ready to move iphone production out of china to escape the threats of tariffs we're going to tell you what they're thinking if going -- place, the xfinity xfi gateway.

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all right, last trading day of 2018 and we're going to start pretty good. a lot of anticipation over good news on the trade front you can see the numbers for yourself there. by the way take a look at oil finally finding some footing here some nice stablization, it is starting to work its way back up, but we do have a new look at gas prices national average for regular gas now 2.26 get this folks down 82 straight days. joining now fox news contradict tore phil flynn, all right phil. 2019 will oil ands gas make that rebound? >> i think oil oil will but gasoline in era of new low price and i think low prices that we've seen last year is going to be the beginning of low gasoline prices even as oil goes up, we're going to see gasoline have less of an impact on oil, and main reason is it is because of shell oil it produces a lot of gasoline not so much diesel in so for every barrel of shell we

get that much more gasoline keeping those prices relatively cheap. >> on oil front itself, the big debate the man versus supply, in the moon time you know, there's still putting on more rig talk of emergency meetings out of opec what's the main driver of oil prices next year? >> i think it is going to be the chinese trade talk if we get a chinese trade deal, the demand, destruction that we've heard about will disappear and we're going to probably be undersupplied in new year i think opec earlier in the year overreacted to donald trump's promise to cut off supply from iran they overproduce but now they're going to go to cut back too much. i think they're worried about prices being low. i think they're going to cut back too much and that economy does better than the market says it is then i think it will. i think we have a or very tight market in new year when it comes to oil. ening real quick on the economies, though, around the world. you know you mention trade but china economy this morning we

learn they're manufacturing went into contraction. >> i think that that's true and i think that's been a concern. but even as they have pulled back on manufacturing side, they're still importing a record amount of oil. and if i also think it means very quickly that they're going to be a lot more open to cutting a deal with donald trump sooner rather than later. tmpleg bill flynn happy new year my friend thanks a lot. >> happy new year thank you. four minutes away from the opening bell and we're going to have a good start to the market and end 2018 on a big note. "varney & company" will be right back. i've always been amazed by what's next. and 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 want that too. eliquis. eliquis is proven to reduce stroke risk better than warfarin.

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opening bell ringing -- and some would say mercifully ready to bring 2018 to a close there was really a tell of two markets although market also wases exposed rally was exposed because for a long time it

really was a tell of six or seven stocks that match weakness across board now it is all exposed all about being out there. worst with case that are joe is built into the market as we head into 2019 and that is perfect back drop evaluation withs are are extremely low these days. and right now they're going to get a little bit better up 131 as we start trading day. majority of the dow participants in the green led by disney apple, intel all looking pretty good here nicki again that's a fan favorite i think as we go into next year. also let's take another look look rather at the s&p 500 -- up 17 points by the way on that do you chart as we were switching i saw boeing had not opened yet. that should be a big so we could get that 200 point start to the session meanwhile nasdaq pretty good start today almost a full percentage point right are out of the gate. it is all about those momentum name including tech names right now all of them are higher.

fractionally higher but they all started session in the green. all right so -- 2018 in the books joining me now jeff and michelle suzanne lee, good vibrations this morning michelle. i love what i saw last week, maybe you know we have not a lot of people around. but the thousand point session, the 900 point interday years l on cusp of giving up session and even friday even though dow couldn't hold buying and nasdaq and russell another thing is that entire kicking in your mind or imply for you? >> i've been bullish i agree with with you like you said at the start fundamentals look really good here and lower evaluation at the beginning of the year so if you like stocks. you're saying don't look at me but jeff as you're saying that. yes. you know, things look god good to me and a i like more things overseas particularly emerging

market foreign market for viewers it is a big role out there. how do you okay you know, there's value out there immaterial to make money as investor how do i take advantage of it that? >> i'm a believer passive indexes like i like emerging market index or a developed international index to get a broad-based exposure but if you followed this particular month you saw s&p down 10% particularly emerging market barely down 5 so maybe emerging majorities have bottomed out here to buying -- >> more before. i mean i don't think people realize for instance, coming into today from june of 2015 that shanghai is down 52% is down 25% this year but -- 52% on that note, can emerging majorities really recover without china economy recovering? smg well you've got china will be interesting because they are going to potentially put more stimulus in to help the economy. but overall when i look at emerging markets what am i looking at dollar is finally

weakening also fed might actually pause so those two things really could help emerging markets here. >> you know spoke investment did analysis when you have s&p falling 10% in a month back to 1940s you're up from what i see -- almost 20% the next year. 20% recovery. so -- >> looking at the jeff as you're saying this. it is hard to change a e bear's mind because jeff says that what will it take for you to get bullish? >> let me say one thing i'm glad the show brought up a couple of things i don't get enough attention but dollar i think it was more detrimental to that market to corporate earnings than trade was by far. in fact, we heard in the third quarter, of a variety of companies from amazon to apple, apple -- they said two billion dollars from the fourth quarter you know part of their -- >> market sentiment turned around with a tenure across 3% three and a quarter getting nervous. >> i'm separating markets from corporate america. i'm saying corpses are saying

that the strong dollar really was a crusher you topple that with wage increase raw material increases that's far before you even get to ever tays so i'm saying those from a corporate point of view were detrimental saying do you think we need relief on the dollar? >> you know what, we're agreeing on something. i'm feeling -- feeling love here. like yes. i agree this strong dollar. if i agree this strong dollar is hurt corporations. but when you talk about tariffs and 200 billion dollars of products, that are going to go from a 10% tariff to a 25% tariff, that is not going to help that is going to make the situation inpefnghtly worse the dollar stronger. dollar stronger yes. >> earn rings report cards and a earnings talking about trade concerns in august, and july, and i'm just confused as to you know going into december, like they started to unravel all of a sudden. >> i think december the trading which you agree i think that fed was the main issue i think is

lingering out there. i think jay powell is going to try to have to find ways to -- to, you he sent out john willias after the report it worked for about an hour maybe. they want to open itself and the fed has such a hard job we were sitting here if fed decided not to raise we would be scared in saying what are we saying -- what is fed seeing that we're not so ping -- you know about the fed is doing exactly what they plan to do and i would be more alarmed if not in december. >> why are they planning something shouldn't they let it tell them what to do. >> that is what they signaled right now i think the market thinkses that jay powell is stubborn and he's set on doing certain things that says two more rate hikes. regardless of the data. that's what they said in his commentary was really -- he was film about his positionings and thinking although he admitted at thes

dallas fed gathering they're not sure what they're policies are going to do to the economy in 18 months or 24 -- >> here's the thing we have a stock market that is addicted to low interest rates. and we have a president that feels that he should dictate interest rate policies, and what the markets are perceiving here is it shall is a shift in psychology now the markets are thinking there's not any unity between, between fed and a the president and that doesn't create to confidence. >> markets are -- one or none next year for the federal reserve i think that sets up a pretty positive back drop for stocks in the first quarter. you have positive developments on trade i think they're going to get deals done before march 1sst and fed holding steady. >> if the feds going to have to -- corroborate with the futures markets are saying because right now the the so-called says too, but on that note that you were suggesting is that -- you know, listen if you're the president and you watch the fed, not hike rates for a decade, plow in you know the balance sheet went to four and a half trillion dollars and 50

billion -- on the point and now doing exact opposite under your watch nonrate hike since election you can say we don't mind rate being high per but you have to make sure you are pace in a way that doesn't derail are this economy. >> yes. but i think trump is going to be trump and there is you know the fed is something to blame. but i think overall the fed is going to be data driven is beginning to look at what the data is going to do and market if they fall inflation is a big thing. no inflation there's no inflation so that might be a reason why they, you know, 1.9%st that's pretty -- yeah so that's and also unemployment it continues to look strong. so if you're looking at unploit and you're looking at a inflation -- >> let me ask you a question why is it the fed's job to stop -- a growing economy? >> it is not the fed's job to stop a growing economy but it is i what fed is looking at is there any type of financial bubble that is happening in the market

it is in the economy, and that's really what they're trying to stop. because like 2008 would happen right you have that financial bubble and if i really think that is the one of the main focuses on of the fed right now. >> you know jeff, main street america just had back to back months of 3.1% wage hike, nonsupervisory are wageses, in fact, went up faster than supervisory wage last month in last jobs report. for the first time in four years, first -- rate really first raise in a decade for mainstream america. i mean, should the fed derail that is that what they're afraid of mainstream america is getting a piece of the action now after trillions bailout the banks are they going to really stop this economy? because main street america is getting a small raise right now? >> keep in mind, i'm not an advocate of the fed raising rates quickly what i'm saying is that we have a stock market has become very dependent on low rates no i think -- the employment gains have been -- have been necessary and a momentum is necessary --

is necessary to keep the momentum going forward. i saw very early that powell it was very concerned about the tight labor market. and he wants to derail any inflation that can come from tight labor market that may -- >> no inflation. and if i agree. i agree. but i think, i think his attempt to slows down labor markets have left a stock market believing that he sees some inflation in the horizon. i don't see that inflation. i don't see what he sees but i understand why -- j i think we're also low enough. folks when you get a chance pull up this cpi pull up inflation over last 50, 60, 730 years looking at 70s look after world war ii it has been coming down we're nowhere near where the fed should be panicking on that. let me ask you about certain investment themes next year people are talking bottom fishing they want to know if he's a buyer everywhere i go. you know bottom fishing, will the momentum names pick up steam? hot ipo über is going to go

public as other names these are newscastment theme dos i they do anything for you as someone who understands fundamentals because they might -- at least bring some excitement to the market. >> yeah. definitely excitement. i'm continuous to be a bull here, i think there are a lot of great opportunities. i like passive indexes that you get instead of one stock you get hundreds of stocks and like i said i like foreign markets here i would be a buyer pretty much anywhere here. >> you work for a great name company. >> what named that? kind of like a last had name of yours. happy new year thank you very much. let's take a quick check of the big boards dow is 235 points we were up 250 as -- we were getting jeff over to the bullish side the market -- was off a little bit. >> we tried let's take a look at apple because it indead had a rough 2018 but tech watcher jainl said it will reclaim the crown as the best tech stock next year. gene muster will make his case at 11 a.m. eastern.

bars and clubs around country gearing up for biggest night of the year peel shelling out big bucks to ring in the new year. we're talking to the operators, operating director of a new york city city club in next hour he's gearing up for a big night -- oh by the way sandra bullock see her new film bird box. it is a huge hit for netflix, 45 million years is watched this movie over the weekend. giving traditional movies studio a big run for their money we have the details all coming up next.

breaking news in new tweet from president trump i am the only person in america who could say that. i'm bringing our great troops back home with victory. and a get bad press it is talk

news and pundits who have felt for years that are doing the complaining. if i say endless wars forever they would still be unhappy. all right well let's check on big board out the gate, up 233 points on dow also let's take a look at apple reports that company could move iphone manufacturing some of it at least -- >> so this is to avoid ongoing trade war fox all largest compiler of iphones around the world we do most of that right now. in china, so because of the u.s. and ongoing trade despite they're thinking to lower cost economy compared to china which has by the way with a cost along with the economy. over thest last ten years, currently at this point we have er iphone like se that are already assembled in india but looking at the new x family iphone x's and moving that shipping production over to india for foxconn cost about $56 million dollars but also come with a 25,000 jobs.

fox conif you think it sounds familiar because it is -- they made headlines recently opening new factory, possible ten billion dollar investment in wisconsin. why don't they shift iphone production and compilation over there instead? >> they will. there's a building a factory. let me ask you a trivia question what was the first product? >> for foxconn oh, you're testing me. i know terry, of course, who is a pioneer from taiwan billionaire, i would say first -- probably a mote role la phone that's what i'm thinking. back in the day only channel turner black knob on tvs back in the day when you turn the channel. click, click, click that was a first contract. 70s right. that was 70s right netflix new drama bird box that a new company viewing record in first week. 145 million accounts watched this joining us now bash senior editor all right jack these numbers what are they saying to you netflix is up 7 bucks. bird box viewer jack also i happen to do this thing --

on netflix that numbers are huge. now, this isn't getting people out of their seats and getting them over their threater to pay individually for tickets but you can imagine that if you have this kind of draw, like first of all why not open some of these movies up in theaters? we talk a lot about people moving to streaming as a disney comes out with a streaming service in 2016 will they be efforted to stop and i had a conversation and i asked them that question he said no way. when a movie opens it a couple of hundred million dollars in the theater, that creates buzz. that becomes a story and that gets more press for movies so -- you know, they're still very -- into theaters but i would not be surprised to see netflix and amazon start opening up some of their better movies in theaters to get that buzz for themselves. >> well, i had not thought about that. although -- you know i wouldn't do the same number of it was a ten dollar movie but nevertheless the --

the movie is really good enough that -- people like this much. what about this battle between disney and netflix netflix can they coexist or -- what's hurt had the most? do you think? >> i would say the streaming universe more than 100 streaming services right now. so it is looking a little crowded. but disney doesn't really have to be a generallyist night like netflix in other words to do everything they have to serve these disney families with -- intellectual property they already have. netflix let's keep in mind is spending 3 to 4 billion they're going to burn 3 to 4 billion in cash in 2019 like they did most likely last year. and so that was a tremendous amount of money disney i think can do better on a content cost. so i think there's room for both of they will to play here. but it is nice to have these little businesses on the side like, the theme park, and movies and you bring in all of that cash while you're doing it. >> am i allowed to ask because during academy awards there's

controversy that streaming movies are not should not -- actually be a contender for the oscars like there was a lot of -- according to robert de niro not really a motion picture if it is not on big screen but smell vision and that's why aroma has to be first on theaters before it is considered contender for this year. >> they have to figure that out, obviously, people making the living in theaters don't want that. but i can tell you one thing for certain based on my meetings at disney. there was some question about whether is this thing that disney is doing on side because you know, they want to show they're forward looking here and thinking about netflix they found passion over there and singularly committed to this streaming service after really different tone that i've heard from them. very focused on this. they feel like they want the company to be transformed by this. >> before i let you go 2019 big theme big area, that you are looking at in terms of the investments. >> first of all, i think we're

going to get some earnings growth this year on the order somewhere mid-singles okay. that's good because stock evaluations are suddenly very fair and get a rise in stock prices i think you're looking at potentially a high single digit return on stock market and i would say if you're looking to slop for stocks, all of those dot come darling expensive suddenly look cheap if you're buying the opposite of that and buying peanut butter stock ises that you want to lock away for safety i'm not sure if those are cheap and many of those businesses have challenges. >> you know like kimberly clark. food companies are challenged. the utilities are challenged. beer companies are challenged have you seen how crowded beer has gotten beer is no longer go to stock for safety if i would be looking at cheap.com stocks. thank you sir. appreciate it. let's check on dow 30, so far pretty good session we're hanging in there you can see all a of the names are up, of course, bog has opened, and it is higher and in parts of those comments, by the way not just

from president trump is counterparts in china making positive comments meanwhile outgoing chief of staff mike kelly says, that the plan to build a solid concrete qawl on a border was abandoned early in administration. president trump, though, responding to that in a tweet this morning, you'll see what he had to say, next.

>>on going white house chief of staff john kelly talking to l.a. time about border wall saying to be honest it is not a wall. the president still says wall oftentimes frankly he says, barrier or fencing now he's tended towards still it shall but we let this solid condition crete wall early on in the administration. and president just tweeting this, quote all concrete wall was never abandoned as has been

reported by the media. some areas will be all concrete but experts at the border patrol before a wall that is see through making it possible to see what is happening on both sides makes sense to me. joining us now former border patrol agent thomas, tom does -- the wall how should it be constructed what would best help border patrol agents? >> great to see you again charles. all of us would agree every border patrol agent that was ever an agent on border would agree some structure you need it doesn't matter whether it's a solid wall better to be slashed of course i can see through them no doubt about it thats that's an advantage when we built landing centers that's what we built in early 90s before that it was chain length. so what happened 100 would run across the illegal aliens by the way not undocumented migrants. illegal alien would run knock down chain length fence so we

built and during clinton administration actually when janet reno came don to borders that was what we needed she came to our -- muster and wrote down what we needed sewel we need fencing so she said this landing we put them up. you can't see through them so we learned from that. and that's the rusty landing that you see on your file clips all of the time charles. >> would be, could be doesn't matter what you call it. >> some democratic party are saying yeah question need border security but it can be done through other ways without any sort of physical barriers -- including would that be good replacement? >> no. it will be a good supplement. but not a good replace the charles no you can't just use one thing and not other it is a combination of things 1.3 billion that the -- in thes want to give the president for total security and not a wall is not going to got it. the last budget kicking can down the road we gave 100 personnel so in all of cpp custom and

border protection including all a the ports of entry and a all a of the border patrol agents qhb are many, many tens of thousands, almost one hundred thousand we got 100 people that's what we got in the last budget that's ridiculouses you need special kneel you need drones you need helicopters horses atvs. >> you need a physical barrier. thank you so much. thanks for setting it straight the record straight we appreciate it. thank you. hey, charles -- some big name newspapers hit with a hack attack over the weekend that appears to originated overseas the question is what are we doing to prevent a tax like this we're going toe ask a national security -- national security analyst ferris in next hour and a 2019 shaping up to potentially be a hear air and pin interest a preview the big tech companies going public next year or more "varney & company" after this. s.

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charles: six hours of trading left in 2018 until 2019. worried about nasdaq. all the green arrows, mostly associated with progress on a trade deal with china. perhaps happening real soon. facebook down 24%. more backlash how it deals with so-called hate speech. we'll deal with that the "bird box" movie is huge. 45 million accounts watched this. what does that mean for the overall future of movies? there is this. 2019 in north korea. a scene from the celebration. pongyang. a very rare glimpse into

north korea. fireworks, lighting up the skies there. wonderful. also, folks in new zealand and australia rung in the new year earlier this morning. i wonder if stuart was anywhere near there? auckland. susan: he is pretty close. charles: he will be back on monday i hope he is enjoying this well-deserved break. stay on 2019 investment theme. what is happening there. scott martin, fox news contributor. scott, overall, 2019, what do you see for the market? >> it looks like a better stuart, charles. still thinking about stuart in auckland there. here is the thing. i think it will be a rough start to the year, charles. there is so much at play. we have hangover from the psychological damages market incurred over last couple years. fundamentally, with weakening of economic data.

pressure on earnings, we've seen frankly from peak earnings we saw in 2018, plus terror impacts. we have the fed still in play. we have the fed backing off a hawkish towards end of 2016. say they will stop producing the balance sheet, i don't think that is foregone conclusion. the problems don't go away with a turn of the calendar. charles: no, they don't. what do you make how much are being baked in already into the markets? several sectors have been hammered all year long. the overall, more losers, by far more losers than winners this year. the breadth has been absolutely negative. it feels like a lot of worst case scenarios are being reflected in this market? >> the breadth has indeed been stinky, if i could use a pun there. you make a valid point, you know market as well as i do, and they

overshoot on upside and overshoot on the downside. the truth is somewhere in between. i believe there is lot of overreaction of fear of things going completely wrong. let's take a snapshot fundamentally or valuationwise through the market. say we get $170 or so of earnings. that is fair assessment. could be 10%, plus or minus of that number. looking at fair value. put a 14 or so multiple, around this 2500 level. depending where earnings grade out. if you look where the market is fairly valued based on what we get on earnings next year, we're probably right about there. charles: what about broad themes that might, bring some excitement to the market. the ipo scene, for instance? a lot of these big-time unicorns look like they will go public. some are even making money. the idea of bottom-fishing might be out there. reemerge ends of the

momentum/fang names. there are broad themes that could have coattails? >> yes, good ideal market in 2019 would be great. i'm not afraid to admit this on national tv, pinterest is a favorite site of mine, as i say laughing. uber as well, other tech companies are very interesting in 201019 that lift the psychology of the market. you made a good point. 2018 was this great year for tech until about october. then it was a terrible year for tech. so we need something to kind of reignite that fire to think of -- the song the doors sung, light my fire, how the ipo market did in 2019 that could help companies that languished towards of end of the year. charles: how deep do we have to go before we get concrete knowledge or feel for big issues, big headwinds, where they're going. >> it will be some time, charles. i think that is one problem the markets run into.

we've had these promises of things getting resolved. i think market too got their expectations too high. the fed was going to suddenly turn dovish, really quickly. a matter of months, versus the process the fed says they have, as you talked about on the show at beginning of the hour, the fed has this process. looking at data. you and michelle were talking about that. process looks i can make 10-year note pushing down towards 2 bin 75 is telling us -- 2.75 is telling us something about the economy. maybe things are not as bad as we think they are. maybe not as good as they were in 2018? charles: markets have to be very patient and wait this one out. scott, thank you, my friend. talk to this later in the today. >> see ya, elizabeth warren launching a 2020 presidential

exploratory committee. want to bring in brad blakeman. this essentially means she is running. she has about 15 million. she will need much more but looks like the first official candidate. >> this is gift. i welcome elizabeth warren into the race with donald trump. democrats will have same kind of challenges republicans had in 2016. 15, 16, democrats running. a field of has-beens, also-rans and wannabes. i think it will be a slugfest. elizabeth warren, taxes, universal health care, nothing which is appealable to the american people. charles: are you concerned though, brad, virtually all these categories however you frame them, will have one unifying message, that is attack president trump? how that interferes with the business at hand in washington, d.c.? could we see more, talking about

indictments and impeachments, rather than real legislative work getting done? >> i think it is all wishful thinking on democrats part. they have been part of the resistance since the day he was elected. look at the great successes he has had. attacking donald trump just to attack him will not work. not enough to be against someone. you have to stand for something. that is the void with democrats well before donald trump became president. charles: democrats feel very good. they had a great midterm for the house. they picked up a lot of seats. they won a few senate seats people didn't feel they would win. they feel like they have wind in their sales, resolves at least a certain dislike, in their opinion with president trump? >> history was with them. on average the party that loses control of white house. they lose 33 seats. they got 40. we held in the senate. gained in the senate. i wouldn't be counting my chickens right now. a lot will happen in next two years. barack obama had a lousy midterm

got reelected. it is not about midterms. it is about 2020. charles: next one, brad. some campaign staff from bernie sanders 2016 run they want to meet ahead of any 2020 campaign. they want to address sexual violence on the 2016 campaign. obviously this is some serious stuff, brad, and quite frankly it is not getting a lot of play in the media. i think it's a bombshell. >> well i don't think it's a winner for bernie sanders. if i were bernie sanders, instead would be campaigning on how the election and nomination was stolen for me. clearly democrats in the dnc worked against bernie sanders to deny him the nomination. if i were a democrat i would be more concerned what is happening within my party than what is happening without. charles: the point is, if something was going on during that run, that could not some of the bloom off the, you know, the bernie sanders rose, even that movement, you know, serious, again, i, i'm just surprised that it hasn't so far gotten

more press. what i have read seems pretty damning. >> i agree with you but i think bernie sanders and his campaign again is relitigating things that will not be relevant in 2020. charles: all right. before we go, who do you think the next dem will be to make it official? >> i think now thaw got elizabeth warren, it will be bernie sanders who will make a firm commitment he is in the race. so far he has been waffling. charles: brad, great talking to you. >> pleasure. charles: a hack affecting major newspapers t came from a foreign entity. the question, are we ready for foreign cyberattacks. franklin graham was kicked off facebook for a 2-year-old post. they called it hate speech. we're on it. the biggest celebration of the year. a ball dropping through sometimes square. i have to walk through that to get to my car.

we're talking about money on new year's eve, when the second hour of "varney & company" continues. ♪

charles: you're looking at it, the dow 30 hanging in there pretty good. we have two losers though, visa and verizon. i don't think it has anything to do with the letter v but just a

coincidence. let's check on gold. it had a pretty good move in response to the market shakiness. down 1.10. amazon plans to expand whole foods stores across the u.s. susan you have details. susan: some say this was one of the probably best acquisition of 2018. amazon buying whole foods for $13 billion. they want to expand whole foods in suburban area, they can get in the two-hour delivery window to get you your groceries. this partnership scared a lot to people in the grocery business. krogers and the like. the thinking was, i think already been exemplified over thanksgiving, more shoppers are doing shopping at whole foods because of the amazon acquisition. in 1200 shoppers, over 50% of the shoppers say they do more shopping on whole foods now

because of the amazon partnerships and promotions you see online, when you click on amazon.com. krogers of the world, all these, they should be scared when a tech giant like amazon gets into the grocery space. charles: they have had to fend off walmart. now to time to fend off amazon whole foods. we'll see. thank you very much. now to the hack on the production of major u.s. newspapers. "the los angeles times," "new york daily news," newspapers owned by tribune publishing among those that were affected. want to bring in fox news security analyst, walid phares. this report, reportedly came from a foreign entity where we seem to get these sort of attacks all the time. i mean how prepared are we, to really ever stop this from happening because the news just doesn't stop? it happens over and over again, and it feels like everyone is vulnerable. >> absolutely everyone is vulnerable, including the government and international organizations. the first we would ask, who is behind it?

that would determine, charles, who here at home can defend us from them. is it governments, foreign governments? foreign entities backed by foreign governments, national criminal organizations? national criminal organizations or even individuals? depend who is waging the attacks our defenses will build up to counter it. charles: how is it different though? if it is an attack it is a attack. why would it be different if it was backed by russia, china, north korea, or just lone independent criminals from a foreign country? >> charles, on many, many levels. number one, if we have evidence it's a foreign power, china, iran, russia, others, then the united states government will have to put all of their resources to engage to counter. when there is countering there is coupler, countering, and we have escalation and we have different situation. if it is organization or individual, the law enforcement can move in faster but more

difficult. easiers to edeck if a foreign government is involved than an individual. charles: a lot of individual stuff, sort of ransom attacks? you know, we don't hear about them often. we know they have been growing however. extremely successful or foreign entities, hackers steal information, hold it ransom and get paid and return it? >> that's right. the cyber world basically is a replica of the real world. it is easier one. nobody stops you. don't have a headquarters, just have a laptop. the basically the difficult to counter what is virtual. i mean if you send the police or law enforcement to a location to find these individuals, you know that could be done but if that location is far away antarctica or australia, it would become difficult. charles: walid, a lot of anxiety, waiting, if you will, some private enterprises want to see government spend more money

on the problem. government i suspect would like to see private enterprise invest more. meanwhile these attacks continue to occur. who should be stepping up to the plate to sort of mitigate them? >> here is the difficulty. if we ask government to do more, government will have to do something else, which is, if they want to defend us, they wanttoe what they're doing. the government agencies and abilities will go into our systems this is something the private sector doesn't like. agencies, banks, institutions, would like autonomy. they would like the government to shield us but at the same time would not like to offer inside nation to the government. very complicated. i think government can shield us from government but very difficult for government to shield us from everything we need as private sector to protect ourself. that is what many companies are trying to do. charles: walid i was going to sport the bow tie. i'm glad you did. you look fantastic. better than i would have. >> i don't think so. charles: happy new year, thank

you very much. >> thank you. charles: here is only in california headline for you. regulations and taxes are already a major burden to the legalized marijuana industry there. we have a cfo who says california is killing the golden goose before it even lays a golden age. dow jones industrial average is slipping a little bit. nasdaq slipping even more. we're still in the green but still struggling. more "varney" right after this. ♪

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several countries around the world. australia, new zealand, north korea, have already rung in the new year. this night is a big night for bars and nightclubs here in the united states. like the kind of, sort of like their black friday if you will. want to bring in the co-owner of the red rabbit club in new york. looking a little confident there, bright eyed and bushy-tailed. are you ready for tonight? >> yes, business is booming. our super bowl of the year and very excited for it. charles: what is different? what do you do to make it different? people are out. they're already filling those pens in times square. the excitement is there. why would i go there to your club rather than hanging out in the middle of times square. >> business is more personal. we have 17 tables, we classify ourselves an exclusive bottle club. you get a more intmat experience at table, rather than a bar or open bar, getting drinks at the bar, waiting for the bartender, you can experience bottle

service with champagne, vodkas, tequilas. we specialize in parades. we have a lot of fun doing it. charles: the fact of the matter, the tables are for the big ballers. >> yeah. charles: i remember, my son, his first year in london, he wanted to go to a club because drake had his party there. >> oh, wow. charles: they did a bottle thing, everyone and his buddies, 1800 bucks. >> well get them up to 5 or 6-k. charles: 5 or of h g? really? $5,000. >> you get a champagne parade. you come out tonight. charles: you have the big bottles like the. >> absolutely. charles: people dropping a lot of money is it local or more tore are tourists? >> it is across the board. red rabbit is exclusive club. we get a lot of celebrities when they're in town. we had a little pump on

saturday. he might come back. charles: if susan li came could you pump up the bottles for another g. susan: balling all night long. some domes, throw dollar bills. cash money. >> i have it waiting for you. charles: this increase to the overall economy doing better? >> oh, yes. this is luxury lifestyle. this isn't necessary one of your basic necessities. business is booming. charles: i feel like we're at the peek of materialism and celebrityism. i don't think this country had them at the same height at the same time. >> yes. charles: people are renting private jets so they can take a picture in front of it to put it on instagram. the need to have the bottle service and be in that is really amazing, isn't it. >> very voyeuristic. people love to be at tables with bottles popping. on instagram with live feeds. susan: instagram live.

>> very voyeurism. charles: next wednesday, if after everything died down, if you have old folks version, start at 8:00 p.m., tin fish at 10. >> that would be great. susan: you're a generous father, paid for your son's bottle service. charles: i'm embarrassed. he said he had to do it. speaking of millenials and -- susan: big spending. charles: big spending. more a had more to spend. it is 11th hour bailout, they got it finally. eddie lam period of time stepped up. what are the details. susan: hail mary shot. it was came at deadline. eddie lampert, the largest shareholder of sears, kmart. bid $4 billion in financial relief to cover some debt. selling sears to himself. he already is the majority

shareholder. this will only save 400 stores of sears. 50,000 jobs will also be saved if this bid is accepted. at the height though, sears is an icon. at the height of sears dominance it was largest american retailer in the country. housed in the tallest building in chicago's sears tower. it had over 2,000 stores. now we're at 400. charles: there has to be examination of private equity impact on these companies, whether toys "r" us, sears. i read about a big grocery chain, again feels like they think they know what they're doing but not always. there is a lot of destruction when they are wrong. susan: they doesn't foresee the online shopping trends. charles: check on the big names. momentum stocks. a lot are down for the year. a little bit of a mixed bag. facebook, probably biggest percentage loser. it had the roughest year for many reasons. one of our big tech watchers is on the ipos that will be hot for next year. also, deal with this,

facebook blocking franklin graham. they called the post that he made in 2016 hate speech. took them a couple years to figure it out. more "varney" after this. ♪

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♪ ♪ she's got a ticket to ride charles: i never, i never noticed when they showed the union jack, that stuart pops up with a the fab four. i didn't notice that before. susan: part of that. charles: the fab five. move over pete before best.

the dow grappling a just a little bit. so are other major indices, trying to get a little bit of oomph. not at lot of folks around today. let's be honest with that. i want to stay on on the big teh names. mixed bag. bring in ray wong, constellation research founder. ray everyone is getting excited about 2019. will be a big year for tech ipos. i want to go down to the list of ones you're looking at. let's start with uber, right? it is probably the most valuable unicorn out there. and i guess the private valuation in the 65 billion range. how would an ipo look to you on this. >> you know, happy new year. uber is hot, right? 75 million riders. talking about 4 million drivers. this is big, probably a big granddaddy ipo happens in 2019.

anywhere 60 billion to 120 billion they're saying out on valuations. it's a wide range. i think they're competing with lyft to get out first. that will be exciting to see who goes first and how they react. susan: does it really matter? lyft is what, almost 10 times smaller than uber. the book runners, ray, looking for something rich, 120 billion-dollar valuation for uber for a company losing billion dollars a quarter not expected to be profitable for years? >> how facebook started. netflix got started. massive base and services put on top. you're seeing it with uber eats. other alternative transportation areas. they're gaining ground. the real question are they getting monthly adoption and getting average revenue per user? i think they are. they have done a good job doing that turning around a lot of issues going on before with travis.

charles: of course, the composition of these ipos, how many shares, how much they raise, how much money they raise, the share price offering, let's not forget facebook. as it started, demand was there, they kept increasing amount of shares, raising offering price. increasing amount of shares, raising the offering price. the stock was a dud, a disaster in the first couple months of trading. are you concerned, as, that these big hyped names could actually not necessarily be great investments for average investors out the gate? >> i think out the gate people will be slow. people will be worried whether they have the users. they will look at losses. but overall, what we've seen big tech, has the platforms, but overall those platforms proven winner-take-all markets. who will jump in after uber and lyft? the third player will have a tougher time. that is what happens in almost all the winner-take-all markets in tech.

the other piece, this is a big ipo season. we're talking like 200 billion in potential ipos coming out of the gate in terms of valuations. when you look at the big five, coming out from uber, palantier, airbnb, lyft, these are big numbers coming out to watch. charles: do you have a favorite yet, ray? do you want to kind of see what the offerings look like? >> i actually think airbnb is the one i think will do best out of them. the reason is, because of the base and because of the market. the consumers that are on airbnb, tend to be moving to more usages, more visits. they have shown how the model works. marriott have taken noticed try to compete against that. of course it will be interesting to watch palantier because it is super hyped but the thing with palantier, they have gotten into big governments and got a lot of corporate ceos to take a look at analytics and big data as

they go to digital transformation. there is a lot of hype as they operate because there is a lot of services but there is a lot of momentum with companies and type of pedigree coming out of that one. that will be interesting to watch as well. charles: before i ask -- you go, ray, "bird box," netflix thriller with sandra bullock, viewed by 45 million accounts. what would that mean for netflix because the stock is having a good session today? >> monthly user growth. can you see the bags in my eyes. we've been watching it all weekend. that is hot. 1/3 of netflix users, 1/3 actually down lloyded it. we don't know how many other people were in the room watching. original content, pays 8 billion, 12 million investment in quality, i think they won the christmas season. this is the new tv. charles: real quick, someone earlier suggested, one of our guests this is the kind of movie

think about debuting in the future on big screen? >> that is true. they started doing that. they started putting releases one to two weeks early so they could qualify fors cars. a couple films did that earlier this fall. i think that would help them get the buzz. earlier guest was right. get the buzz and helps actors nominated for an oscar. actually helps with right type of producers. charles: ray, have a a great new year, see you soon. >> happy new year. charles: president trump with trade says there is quote, big progress on a deal with china. i want to bring in a "forbes" columnist. brian, the trade deal, where do you think, first of all do you think it will happen and if it does, what would the economic impact be at least on our economy? >> i think it will happen because both parties really want it to happen. china knows it needs the united states more than it needs anything in the world.

in the united states that it understands always prospers from lifting up other boats around the world. both parties want to get it done. when it does get done as a good deal, you will see the market surge and all this recession talk dissipate. charles: it is interesting to me, because when this whole thing started to evolve, of course classic economists, were pretty upset with the idea of even using tariffs as a weapon. now almost everyone agrees that something is going to happen and it could happen very, very soon. what, you know, the implications again for me now is that, could we see a change perhaps in the thinking of classic economists? since that, before that it was always about cheap good, right? as long as you produce cheap goods for the consumer. ultimately that is working. we see a change with the notion of job, job creation, preservation of jobs might be even more important than cheap

consumer goods? >> let's call them the wisdom of the ancients. shakespeare said alls well that ends wall, machiavelli says the ends justify the means f donald trump is able to use tariffs to bring about a sea change in trade, we get get trade deals and lower terriers by the means of this process that is major historic win. that is a procedure nobody tried in free trade before. if he wins that one it, would be epic. charles: it would be. let me ask you about this, brian, goldman sachs, they cut their growth forecast next year to 2%. really concerned about the first half of next year. what is the forecast for growth. >> if we get a trade deal, a really free trade revolution, we'll see 3, 4, 5%, growth no problem. if donald trump does one more thing, serious about cutting spending, he was talking about a 5% spending cut. i think markets will be very

interested in that. that means serious private sector economic growth in the future. if we get those kind of results, there is no reason we can't sustain ourself above 3%. charles: perhaps the irony, democrats don't play ball, all about obstruction, maybe the irony, we don't get kind of deals like the infrastructure deal, big spending deals? you think that would be better for the economy, better for wall street? >> what happened after 1994 when we had gridlock with the republican congress and bill clinton as president, the democrat? we saw spending go down, down and market loved it. if we could have that scenario again, we would see do you 36,000. charles: where do you see the consumer going into next year? where with the consumer with confidence, momentum, finally spending money. >> interesting to hear your segment on ipos. we'll have $200 billion in ipos. there is now an investment boom going on in the united states. i see what the consumer did at christmas is anticipation where the investment is going.

when we vin investment really surging the consumer will follow that right into economic growth. charles: brian, always great to have the conversations with you. have a freight -- great new year. >> have a great new year my friend. charles: here is president trump tweeting. you voted yes in 2006 and 2013 but with me in office i will get it built and fast. apple down nearly 7% for 2018. at the top of the hour one of the top apple watchers tells us why he is bullish on this stock in 2019. president trump tweeting about isis, an possibly reconsidering a fast withdrawal of u.s. troops from syria. a critic of president trump's move to leave syria is next. ♪ i am not for colds.

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susan: former clinton pollster doug schoen says that presidential candidates go through several round of vetting before they're chosen by their party. he calls it the invisible primary. take a listen. >> there is something called the invisible primary that comes first. which is, who will the donors go to. if you can't raise money you can't run, unless you're a bernie can raise in small amounts. if you can't raise in small amounts or big amounts you're not competitive. i think there will be a win know ing out process. then who breaks through in the polls. then who does well in the first couple of states like iowa, new hampshire, south carolina and then super tuesday on march 3rd.

susan: we have a another tweet from president trump on the wall. it is incredible how democrats can use ridiculous sound bites say a wall doesn't work. it does and properly built almost 100%. they say it's old technology but so is is the wheel. they now say it is immoral, but it is far more immoral for people to be dying. charles: sorry about that. susan: he has a point, doesn't he? charles: the wheel. everything elon musk is doing, is just old. and he is revamping it. we're starting to lose a little bit of steam here. it will be a thin trading dow. the dow could be volatile. up 161 points. president trump responding to critics about his decision to pull out of syria.

here is his tweet from this morning "if anyone besides donald trump did what i did in syria which was isis loaded trap. we're slowing sending our troops back home to be with their families while at the same time fighting isis remnants. we want to bring in four-star general, fox news strategic analyst, general jack keane. general keane, you've been critical on president trump's decision on this we know he did run on this as a campaign issue. we know isis has largely been decimated, particularly physically, the old, defacto capital that they had. why is it so critical that we remain in syria? >> well i think the president, he is not reversing his decision certainly but he is adjusting it. i think it largely came as a result of his visit to iraq where he got some additional information. the guys in iraq, commanders, oversee the operations in syria.

so they're very close to that situation. very close to where isis really stands and isis has been fighting for the last eight weeks in a place called hajin against syrian democratic forces which we helped plan the operation. we provide the artillery support, air power for that. it took us eight to nine weeks to defeat determined resolute organization there. there are thousands more left like that. so, where the president's i think is now. he doesn't want to pull all the forces out until there is assurance that isis is truly defeated. most importantly they're not able to reemerge and rebuild the retake, territory again. so, that is an important adjustment. the second thing is, he does not want the syrian kurds to be slaughtered as a result of a departure from syria. and he also doesn't want iran to take over all of syria.

so, those three adjustments are being made to the plans and certainly the pentagon will, will act accordingly in terms of, in terms of a phased withdrawal to accommodate those desires of the president. charles: you know, americans of course, we've been in afghanistan going on 18 years next year. really, really, galvanized around president trump's decision on the campaign trail when he talked about this. most politicians that will want to win national office are probably less likely to say, hey, we want to stay in syria, stay in afghanistan, so forth, it does a dilemma how we don't get stuck there inevitably. the kurds will always need us to a degree. iran will always have the eye on syria. does that mean we'll always be in that country? >> no, absolutely not. but it does mean we have to be

there, i think, the fourth thing that happens, if you want a seat at the table to get a political solution, because we all said there is no military solution, you have to have some influence. the way you have influence, you have to have some skin in the game. i certainly think maybe half of the amount of forces that we have, only planners, advisors and coordinators for artillery. they're not doing the fighting. the others are doing the fighting a. locals are doing the fighting. same thing in afghanistan. locals are doing the fighting and we're training and assisting there. the reason why we're in afghanistan for 18 years is fundamentally u.s. policy decisions. we went to iraq and we put afghanistan on a diet. the taliban reemerged and we didn't do anything about it until we put additional forces in there in late 2008 by the bush administration when the surge in iraq succeeded and we had forces finally available to us. think about that.

the taliban in 2001, they reemerged. they we didn't do anything about it in terms of any consequences until 2018. president obama put forces in 2010. he only gave military commanders, gave them 25% less than what they wanted. then he pulled them out 15 months later. those are u.s. policy decisions that protracted that war unnecessarily in my view. charles: general jack keane, it is always a pleasure. happy new year, sir. >> happy new year to you too. take care. charles: let's look at facebook. the being stock down 24% year-to-date and continues to face a lot of pressure, privacy, hate speech, its policies surrounding those. what exactly are they? we'll deal with them next. ♪

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charles: check out shares of facebook now under fire for blocking reverend franklin graham for hate speech. this is post from two years ago. listen to this. >> well, it just came out of nowhere, just came out of left field. all of sudden got notification we're blocked from something back in 2016. now facebook acknowledges that they get billions of posts every day and they have, i have heard from 7500 to 15,000 people who monitor and they have just a few seconds to catch a bad post. well, why are they going back then to 2016? i think it was, just really a personal attack toward me. charles: come on in, steel house ceo, mark douglas.

is this really further proof that facebook, their so-called hate speech policies are just a tad bit biased? >> i don't think it is proof at all. i mean they have an impossible task. people are posting literally like just listened to billions of comments a day. i think their foal is just to try be fair, to try to prevent speech that could lead to violence. charles: and you think reverend graham in any of that speech that could lead to violence? >> i can't say that personally. and i doubt that's the case but i think, you look at facebook, everyone is critical of the company right now. everyone is trying to find their pound of flesh, their way to direct the platform to their means and facebook is trying to balance all of that, and it is literally an impossible task for them. charles: i think the issue here is that all of sudden they found a 2-year-old tweet, right, but post, rather and that bothers people. you know there is secret rule book out we learned about that

moderates political speech. it was leaked to "the new york times." it is like 7,000 people monitoring billions of posts and somehow they have time to go back and through all of these, it bothers a lot of people who believe they have been biased against conservatives. >> it is interesting, just about all the news about facebook is from years ago. so, i mean that is, you don't hear really anything from actions they took this year, maybe with the exception of some things that sheryl sandberg did this year, but this is all the past while the company was growing and basically, learning, what they had to do to satisfy all of these competing demands. charles: are you comfortable now that they are there or at least getting close to that? >> i'm comfortable they want to be close to that. i think there will be more. charles: you feel like legitimately they do want to be sincere? in other words, be the sort of platform where everyone with, different ideologies can go and share information and not be

mistreated or treated differently? >> yeah. if you, one interesting thing about facebook is when mark zuckerberg testified before congress, he had, he kept talking about all the international demands. not just what he has to do in america. it is what he has to do worldwide. there is no incentive for, i mean he -- he is not trying to mastermind the entire planet and it is just ridiculous to think that. charles: thank you very much. we'll talk to you real soon. by the way apple also having a tough year. down 7% in the calendar year but our next guest, a big apple watcher, says that stock will make a huge bounce in 2019. he's next. ♪ hey, who are you? oh, hey jeff, i'm a car thief... what?! i'm here to steal your car because, well, that's my job. what? what?? what?!

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charles: 11:00 a.m. on the east

coast to abm out my spirit on charles payne and here we go. the last hour in the last "varney & company" show 2018. we are well off the height of the session to the dow up 140 points. of course we want to check the big tech momentum we check all the time. specifically apple. we know it's been a rough year, but tech watcher gene munster says it will reclaim the crown as the best tech stock in will make its case in just a moment appeared international consumer electronics show kicks off in las vegas this week geared coming up we'll talk to gary shapiro, president of the consumer technology association. i wanted know what new tech trends will see in 2019. check this out, hong kong were even the new year right now. it looked great. >> they spend millions doing that every year. charles: looking great, fantastic good getting excited about tonight. let's talk about apple appeared

a down year, but we do have news that it may make india. gene munster, you were saying that apple will reclaim the crown is the best tech stock next year. make your case. >> is pretty straightforward, charles spirit every 10 years or so there's a new paradigm investing in apple appeared the existing paradigm is to focus on iphone units. they recently announced will no longer provide the longer provide that disclosure. and so we think in 2019 there will be a greater focus on the revenue and earnings, which really is this holistic view of apple as a service. when we talk about apple as a service, we don't refer to 15% of their business data services. it's the other 65%, the hardware piece also starts having services like character was the in subscription the visibility. our basic cases this. investors focused more on revenue and earnings growth. they will start to understand than this operates more like a

consumer's able company and consumer staples tend to have higher multiples. if you look at clorox, for example or coca-cola they have multiples of double where apple is. so are cases in 2018 there's going to be emerging view of apple as a service in the emerging focus on the consumer staples multiple which potentially could double shares. not saying that will happen in 2019, but i think the pats will be laid. tree into to your point, when apple on the last earnings report said we are no longer going to break out these iphone sales, it was a shock. the stock has not yet to recover and it feels like maybe they've reached some sort of peak with respect to the cult following and maybe even now the average selling price for what's selling price while it's going up is starting to impact volume. how can wall street make this tidbit that you're talking about because the consumer staples are seen mostly as a safe haven area for the most part.

this year in particular in part because they don't have any pricing power. so is that really going to be what drives investors to buy the stock rather than the growth narratives that really has driven the markets in general? >> so i think again this is a transition. we think 2019 is an important year in the transition but it will probably take two or three years to get there. we do believe there is a risk to the march numbers. that would suggest that our calls premature. in fact, the way investors are going to think about this is look at the summit look at this over the period of two, three, four quarters and think about the apple store in that context versus hyperfocus on any given quarter, which i think is the iphone units that tended to create the hyperfocus on something that doesn't matter. i give you a quick example. amazon doesn't disclose how many swingsets they sell at any given quarter and clorox doesn't disclose how many gallons of floor cleaner that they sell.

what investors look at his revenue and earnings growth. the simple takeaways yes, i do believe that over the course of your investors will get increasingly more confident that we cannot live without technology in that this is in fact a new paradigm around consumer staples. tree into let's take a look at tesla and perhaps talking about paradigm shifts. on friday after they announce this major board shakeup come is a pretty good names on there. of course larry ellison standing up a time. this change the narrative with respect to this as an investment? >> surprisingly it does. we have been critical of you and it's easy to be critical of him more recently appeared targeted if there hasn't been a driving force for into unhealthy behaviors. larry ellison is unique. he's a personal friend of elon musk. that doesn't mean there's necessarily a grave conflict of interest.

larry ellison was on the board of apple from 1997 until 2002 and close friends was the job. elon musk is very unique. ultimately about as someone but elon musk will listen to appear when he veers into synoptic territories, that is the critical piece here. the product itself, the production of cotton through those issues. it's keeping out of some behavior and larry ellison is one of unique people that can do that. >> gene, can i ask about cash position. we saw the convertible that means a billion dollars is paid in the first quarter. the stock prices get up to 359 each otherwise you have to pay out. it's not a concern for the market? if that be not reflect that here? >> is probably not reflective as we inch closer to the date with

more anxiety around that. the good news for tesla is they'll have reported their december quarter before that payment you're talking about comes due and that should be a positive force to get the stock above the hurdle. if they do not achieve that, let's say that 360 or whatever the price is isn't achieved, they do have the money to pay for that. i can them into very tight cash position that they can get through that critical debt payment. the simple takeaways on the cash question is is that there are a much better position to undertake all 2019 to get there. i think tesla is still a great story and renewable energy which is a great product roadmap. >> they have so much in common. another stock that's taking it

on the chin, netflix. this new drama, bird box, said viewing records 45 million accounts launched it. obviously huge numbers or the stock has been as much as 10 bucks today. a lot of questions around netflix. where do you see this going next year? >> we think this one will house a more headwind. this is not in the camp of fundamentally changing the world. they have in the past, but not other life or world inflection changing they will the next decade. 45 million is incredible. they're talking about a third of their subs have watched it. we don't have much metrics because they really give up those type of metrics. if you fast forward 12 months from now you'll have apple with 25 or so. they'll have their own service and amazon will be more aggressively invest in the video appeared. competitively like it's much

tighter. there is one headwind against apple's original content. "bird box" is a horror film and that's not the type of content it does well for viewers but not the type of content apple will come out with. charles: is there a chance apple could make a bid for netflix? >> that's talked a lot about. i think it's unlikely. i think a more feasible bid, even though it's very unlikely would be tesla. charles: okay, good one. the journal reported amazon plan to expand whole foods stores nationwide amenities like megastores. how worried should the traditional stores be about this? >> they should be very worried your traditional brick-and-mortar should be worried. amazon obviously has dominated online. it's about 15% in amazon has a much greater ambition to be a bigger retailer in offline. if you fast-forward a decade now

it's probably going to be 45% purchased in traditional brick-and-mortar. amazon needs to do a lot to wrap that up here 480 stores with whole foods. 110 stores with their own pop-up stores, so collectively cost 600. that's far less than wal-mart has in the u.s. about which is 4700 stores. it's not just grocery stores that need to take heed to this development in "the wall street journal." traditional brick-and-mortar. we still believe we are wrong on a prediction that amazon would acquire target in 2018. i still feel that will eventually happen because that will give amazon another 1800 stores to be more competitive to wal-mart. charles: that would be huge news. we wrote it all down. we will hold you accountable. u.s. soldiers held accountable. >> fantastic. right on. thank you. charles: a big cyberattack on some of our country's largest

newspapers causing publication delays over the weekend. we will tell you exactly what's going on in the outgoing chief of staff john kelly says they plan to build a solid concrete wall on the border was abandoned earlier administration. you'll see what he's saying. the the government shutdown now entering its 10th day. i went inside. president trump dig in his heels on the wall and blaming democrats. 12 hours to mount a scene in times square will look completely different. it's starting to get path already. stay with us for the last hour of "varney & company." ♪

charles: at the start of the mother is 6200 migrant rain in the city of notable t-1 is the city of immigrants the caravan is having a very hard economically. white house chief of staff john kelly saying plans for a conquered border wall were abandoned early on. here is president trump street in response. an all concrete wall was never abandoned. as has been reported by the media. some areas will be all concrete by border patrol and see-through

thereby making it possible to see what's happening on both sides. make sense to me. joining us now, oklahoma congressman markwayne mullen. congressman, if not a wall, the idea is we do need some sort of physical barrier they are to help stop and also dissuade illegal -- illegal crossings. is not true? >> absolutely. we know that works. in san diego since the wall was built using a 92% drop in illegal crossing and an apostle of 95% drop in illegal crossing. no question that needs to be there. in urban settings, you do need a large physical barrier to prevent people from just running across and burying themselves in neighborhoods. but in open areas in the middle of the desert when you're miles and miles away from any population, you know, you can have a different type of wall like i've talked about on here.

you can have the wall that astro technology has proposed. a high-tech wall. charles: how would a high-tech wall be different than say one we see with these fonts? >> in a setting where the drill your hundreds of miles away from any setting of population, you have the astro technology, the wall that when you come across it and immediately gives you the technology to say that the human or animal it will tell you how much a person weighs if they're carrying a pack how many individuals are there and put eyes over the top of it and give border regions in time to apprehend. it is much less and a lot more cost effect if any can be cut. if you do cut it will immediately bounce back and then you can't build underneath it because it can detect up to 250 feet deep. at a fraction of the cost that is one type of wall and like i said in urban settings you do need a physical barrier.

charles: representative mullen, i know when it comes to security the first and foremost is to deter. so theoretically fort knox could be robbed. there's a lot of reasons anyone deterred from trying. this and that's where i think perhaps the democrats may be really off base suggesting drums and a third technology alone would do the job of the wall. >> there's always a difference between a hard target in a soft target and you want to make yourself a hard target in our border should be, too. in 2006 you had barack obama, hillary clinton, joe biden and chuck schumer all voted for literally a secure fence act. in 2013 you had 54 democrat in the democrat controlled senate vote to increase spending on our border by $40 billion to build

no less than 700 miles of fence. the only reason they're not doing it now is because of the political point at this point. they think they went on this, but they put security the american people behind their politics. charles: somehow in the last five years has become a medieval solution. >> is ridiculous. look charles commanders in the same briefing we do. we apprehend literally tendo terrorists or reprint of entry ever single day. we are talking about securing places in our point of entries. before catching 10 from the point of entries, how many are crossing the border illegally that we don't know about. that should be a headline everyone in america should know that number. it's a shocking number. first time i heard that number. amazing. real quick if i can come in this government shutdown looks like there's any progress being made good when you get to washington dems will be in charge of the house. >> we've made an offer. we've made an offer to the

democrats to do idaca. allow them to have a permanent status. the point is that chuck schumer, nancy pelosi don't want to talk about it all. as i said come and they think they went and put american people at risk. i don't know what else we can do will make offers to say listen, we'll give you daca and these other things that you want to secure these orders. they're more interested in keeping the government closed and securing our borders. charles: that speaks volumes. really appreciated. >> thank you, charles and i appreciate you. charles: 10 terrorists today. gold is up as the market rallies starting to lose a little bit of steam with the inverse relationship. how about bitcoin. patrick morrisey is leaving a 30

state coalition urging the supreme court to protect them historic cross honoring world war i veterans. the decision in this case could affect monuments and memorials all across the united states. coming up, attorney general patrick morrisey himself. 2018 was a big year from an exodus for high taxes. can we see people in new york and california. it's not a rhetorical question and we had the answer for you when we come back. plus the world record nassau, new horizon set to make history by making it the most distant flyby ever. i new year's day. we'll be right back.

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"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. charles: tamara new year's day the horizons spacecraft expected to make history by the most distant flyby ever. it will barrel past a space rock on the outer ridge of our solar system. we're talking a billion miles past bhutto. new horizons in 2006 which is no longer a planet. some americans say no to high taxes texas, washington. no state income tax. jeff flock is in indiana where illinois residents are moving as well. are they moving? >> charros commend beautiful day here for you along the illinois, indiana border.

they're moving to indiana. scooping up the ante and a back there behind me. u.s. population growth overall hit an eight-year low based on census figures that have just been analyzed. some states doing worse than others. new york, california but when it comes to loss of population is indeed the biggest loser. in 218,114,000 people moved out of illinois even with births and people living in a net loss of 45,000. worst in the country and its fifth year of declines for illinois. and yes, they are moving not far away. governor cuomo in new york says people leave new york because the weather is bad. illinois and indiana have just about the same whether if you check it out. yet, if you look at it. i've migration, illinois lost about 8% were of population,

gained about 3% and neighbor to the north wisconsin with even worse whether i'll tell of 2%. it's all about the taxes. for a lot of people we talked to, high property taxes, sales tax in chicago, some of the highest in the nation. people just move over the border. they don't have to go far. we should go to california even though the taxes are worse. sure into gap, but there's always sunshine. jeff, thank you for a match to my. happy new year's. >> the international in las vegas and coming up we'll talk to gary shapiro, president of the consumer technology association. i want to know what new tech trends will see in 29 team. here's an only in california for you headline. already a major burden to the legalized marijuana industry. next we have a ceo who says

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charles: check the big board here. nevertheless, the dow was given up over 100 points from a tie about the. let's take a look at the big tech names. the international consumer electronics show kicks off next week in las vegas. joining us now, gary shapiro,

whose that the consumer technology association also author of the book ninja future. let's talk about trends because it feels like a lot of them out there. which one is the most prevalent? >> well, we are entering a new era. 5g technology will be very big. we'll see the heads of at&t and verizon and others talking about this great technology. every 10 years were just going from 4g to 5g inserting the transformation and you'll see a lot in 2019 and 2020. the ingredient technology of the future is artificial intelligence. a.i. will not only have it separate area, will also be pervasive throughout the show. it's an ingredient technology for the future that will change our lives, keep us safe and do so much more in every aspect of our lives. it's something where there's an international battle going on and we think the u.s. is very,

very well-positioned because we have a good balance between privacy and sharing of information and data and a focus on technology. if you want to see the future you should focus on the chip companies. amd. also in the video, qualcomm, intel and they are the ones who really drive where we're going, how technologies can be integrated. and of course you'll see it in my book, ninja future. charles: let's talk about this. is this part of the next evolution of the technology that were really causing a lot of anxiety among main street? in other words, this is where you start taking away jobs from human beings. isn't this the part part that's really driving us? >> there's no question that there will be some anxiety as with every new technology from the car -- even a credit card. that's why we have to have a discussion. the fact is in history every new

technology has taken some jobs away but created new ones and raise the level. its length in our lives, cap is healthier and allowed us to travel and communicate with people around the world. it's gotten us a lot smarter. we no longer dying in her 20s. it's about progress in improving human condition. we have to have discussion and talk about jobs and privacy. we have to talk about the appropriate role for government of the for government of the guard rail funds were born to play by the same set of rules and have a standard to keep you as competitive as we have these global battles going on. that's really important as we move forward with a.i. and other technologies like cells driving, robotics. all these great things that we know will happen and basically keep his healthier and happier. charles: tried to keep my inner king at bay because i agree with everything you said. history has proven that out. it's hard for a lot of people including myself to see where

the jobs will be created. you know, that history has proven that's always been the case. i want to ask you just alluded to china, trade and impact on consumer attack. >> of course china is very big. they had a history of taking our best ideas with unfair trade practices. but as they got their own innovative companies they've definitely gotten better. they definitely want to see a trade deal the way we do when they recognize the way we do when we're feeling that these tariffs to president post or taxes. we've kept in a 10% for a few more months and if they got a 25% will see inflation, unemployment, something not only recession and that is why we have to cut a deal the way we did with mexico and canada. it's necessary to preserve our stock market, but right now were paying a billion dollars a month as an industry because of these tariffs and of course affecting the american can do rental raise

prices in the future. charles: what is interesting is how china was able to supercharge its economy while still having double-digit most-favored-nation tariffs against the rest of the world. so we know all the economic books they tariffs are bad. how did they pull that off for so long to have massive terrace of their own in the massive protectionism to power up to the second-largest economy in the world. >> 1.4 billion people categorized as a developing country. i agree with time to look at that and make it an even playing field between china and the u.s. and the rest of the world. we're excited about that. we are ready to gather with over a dozen countries and have a free trading zone. president trump did kill that idea. maybe the canadian mexican meals will be the basis of that. china is ready to step up and getting more responsible over

year. and make sure we win it. charles: i want to focus on your book, ninja future, secrets to success in the new world of innovation. tell us about it. >> raceway this is the second in a ninja series that i've read. it focuses on the fact everyone is dealing with the new world technology. and to be really good added you have to act like a ninja. you have to be clever and break through walls and understand technology. ordinary people, business people and government because every company is a tech company. we'll have over 4400 companies exhibiting the largest business event in the world. almost to .9 square feet of business space. we'll see not only vertical electronic companies. we see every type of company ceo from around the world because this is how business is done.

you cut deals and you have to be flexible. charles: gary shapiro, thank you. appreciate you spending the time with us. we'll see you again, soon. switching gears here, one year since california legalized marijuana, but our next guest says overregulation overtaxation is now doing more harm than good. joining us, as adrian taplin has come and ceo of knesset. you're on the luxury end of the marijuana business. how is it hurting your business specifically? >> there's a number of things. first a lack of resolve is because of local regulation been imposed by a number of different cities. for example there's only 500 retail outlets in the state of california and 60,000 points of sale in the alcohol industry in

the state of california and the lack to get product is very difficult on top of that. here's a standard acer product in a retail shop would be out the door price for my product will be without taxes. 1500 or so are still being allowed to operate the out the door price for a product of equipment quality would be about $45. so that's a 60% price could just imagine if you woke up one morning and everything was 60% more expensive. that's a california consumers have had to deal with so far. charles: what will make this change? there's been a big money poured into your industry. you've raised a lot of money for your own come me. california has to be the leader

here. what's going to make them puts emergency on making sure this is a growth industry that is supposed to be? >> california cannabis is absolutely a growth industry. we started in 2016 and a grown over the 725% compound annual growth rate, so the growth is most certainly they are. however, there are a number of opportunities to regulators have an beginning to capitalize on them. i'm cautiously up to mystic to california is beginning to make the right steps. first, s.b. 215 is going away so that makes the 1500 illegal stores operating for the last year no longer able to operate. as all of you operate illegal stores where you don't have a permit, it is moving from a misdemeanor to a felony as well allowing statewide delivery. >> so it sounds like they are

moving slower but they are moving the way you want. i've got some breaking news. we'll have you back on real soon. >> i appreciate the opportunity. charles: fox has learned house democrats plan to advance a plan to reopen the government wants to get control of the house on thursday. they will finally package sometime this afternoon double tackle six appropriation bills for the rest of the fiscal year. these are brand-new bills, not temporary bills in the mirror with the senate already completed on the floor or in committee. the house will then do a second interim plan to fund dhs, which would include $1.3 billion for the border wall. not 5 billion. take a look at oil at 46.50 at some point earlier in the session turned down along with semiconductors pressuring this market and change for the most part. now the national average for

regular gas, $2.26 per gallon found 82 straight days. senator elizabeth warren taken a major step towards a run for president in 2020 and we've got the story for you coming up. the cyberattack on the country's largest newspapers causing publications, delays over the weekend. next we'll talk to the former national will chief of staff. ♪

susan: earlier, peter murray c. compare the u.s. and china negotiations to world war ii. take a listen. >> look at the cybercommercial espionage deal of 2015. now it is turning out to be as worthless as some of those nuclear arrangements with russia. they are back at it again. the bottom line, the very bottom line is china was fundamentally a criminal regime. it doesn't have to play by the rules of civilization as a war. cheating, stealing, lying, anything goes. it's like chamberlain dealing

with hitler. i'm skeptical and disappointed in the united states. not having put in place the terrace in december.

charles: senator elizabeth warren taken a major step towards a 2020 presidential run, releasing the video saying she's launching an exploratory committee ahead of the 2020

election. the video focused on the things that will define her presidential run, economic justice, government accountability and reining in big corporations. a cyberattack disrupting production at several major u.s. newspapers over the weekend. the target in these attacks was publishing, the parent company behind papers including the "chicago tribune," the "baltimore sun" and the new york daily news. on to news. under bringing fred white, former national security council chief is not. great seeing you. >> charles, it's been too long. happy new year. charles: you, too. initial thoughts are speculation into the launch from overseas. it just feels a reminder of how vulnerable we all are to this stuff. >> that is right. a lot of major attacks in 2018 including a huge one against meredith a couple months ago that was half a billion stolen. this one appears to be a ransom or attack including experts than just an initial readout and may

have originated in eastern europe. we don't know about just yet but it shows how increasingly vulnerable we are because so much personal data is being placed on the web for multiple devices and frankly companies and american citizens have to exercise better cybersecurity practices. charles: there is this sort of rollout there that you don't ever pay for people who kidnapped. you never pay the ransom and yet i read over and over again were companies are paying ransom ware paying ransom wherein they pay a pretty quickly. >> the cybercriminals are targeting large companies with an urgent need of data that can afford to pay ransom. that's why hospitals are being targeted and i suspect that is why these newspaper companies are being targeted and in many cases these companies have no choice. charles: well, what is going to happen? ultimately to your point as our

data, personal information, everything. it doesn't feel like corporate america stepping up to the place. maybe they've made a determination somewhere that it's easier to occasionally pay ransom rather than to make the investments needed to safeguard her information. >> well, companies have to have better cybersecurity. they can have the best antivirus around, but just one employee has to click on a spear phishing e-mail and a virus gets all over the corporate network in the ransom ware program could be in the system. it isn't simply a technical challenge. if the password needed to educate employees that they have to be very vigilant to cyberwarfare. charles: next one for you, fred. president trump responding to critics to pull troops out of syria. here is what he treated this morning. if anybody thought donald trump did what i did in syria, which was an isis mess when i became president, and they would be a

national hero. isis is mostly gone. we are slowly sending troops back home to be with their families while at the same time fighting isis remnants. what are your thoughts on this? >> you know, charles, one of experts rushed to attack the president over this decision before it came out. senator graham had a long meeting with the president and that was explained by the president that he is not going to precipitously withdraw to give isis an advantage or hands. to the iranians. the president has raised some valid points. are we going to be in the area forever? what is our mandate there? when people say they will hit syria to iran and russia from this year has russian troops in the country because president obama allow them to get in there and it was not going to flush them out. charles: i look at photograph images. it is a hollowed out shell. hard to imagine any human beings could still live there and it's

all happened while we were in the country. while there is gassing children, it's all happening. we don't have enough force to police the entire country. so it feels like it is very precarious situation. we know we want to deter any action against the kurds. they fought violently, but it's also difficult for the average american to accept putting our men and women at risk like this. >> i think there's a reason to have u.s. troops there, but the question has been answered how long are they going to be there? the related question is why are we doing this alone? were the german and french and british troops because the more effect if we are in syria, and a few refugees go to europe and i frankly think if there is a western presence in syria, should be a multinational presence. it should be mostly european. charles: fred fleitz, great seeing you.

we'll see you again this afternoon. charles: attorney general patrick morrisey is leaving a coalition to protect the cross honoring world war i veterans. the decision in that case could affect monumental memorials all over. next we will hear from the attorney general himself. we'll be right back. ♪

charles: a federal appeals court ruling that a cross shaped monument in maryland honoring soldiers who fight and died in world war i needs to be removed or destroyed.

now 30 state coalition is pushing to have their ruling overturned. they say the cross -- of course they wanted to stay. but in the coalition's west virginia attorney patrick morrisey. joining us now, mr. patrick morrisey, what are you doing to protect this monument? >> as you indicated there was a 30 state coalition dedicated to ensuring that this cross, the peace cross has the ability to stay because the implications for the entire country are very significant. all states across the country actually possess memorials that honor the dead and there were quite a few cross memorials. what we're arguing here is that this specific memorial passes the first amendment test. it has a secular purpose for a long period of time in the implications if the plaintiffs are successful would be that you'd have to literally raised

tons of crosses down across the country. these are memorials meant to honor the dead. we think the first amendment allows these crosses to remain and we think that the position being espoused here on the other side is pretty extreme. charles: the administrative ruling, what was that based on? is it on public land using public money, how does this decision come about in the first place? >> most of the focus has been that the nature of the memorial because i think the court wrongly concluded it was inherently and really only religious in nature. i think if you go back to the history, even look at world war i, the types of memorials that were set up, and he is cross memorials, the history of the cross always have a secular purpose as well. i think that the court erred when it said this is a large

cross. it would have a predominant religious message and we don't think that's the case. if that's the position the supreme court would uphold, their crosses and arlington and west virginia. the west virginia state capitol places across the country that would fall. charles: the notion of religion and state. a lot of people have suggested may be a re-examination of the cons to tuition may be to take a look at this interpretation and see if we are applying at the right way. you have any thoughts on that? >> when the founders set up the constitution and the establishment clause, they were trying to provide some form of neutrality for various forms of religion. i think most people agree with that basic concept. but what you have here is there are efforts underway to raise all form of religious symbols from public property.

that goes way too far not only not what the founders intended, but not consistent with supreme court rules. keep in mind some of the cases we've seen with the supreme court we've seen the 10 commandments have been upheld looking in the context of the rule of law. charles: we have to leave it here. we are coming to what they call heartbreak. i do have to say good luck with this. i really hope you prevail. thank you very much. >> thank you. a big issue for the whole country and west virginia. charles: thank you. we are not done. more "varney" when we come back. ♪ and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet?

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♪ this holiday season, families near you need your help. visit redcross.org now to donate. tons per year by 2025, requiresr lan innovative approach. our0 approach employs the best analytical tools that can be applied. the smackover formation in southern arkansas may hold one of the most significant lithium resources globally. the key to unlocking this resource lies in deploying advanced lithium extraction technologies and standard lithium leads the industry in the application of these processes. learn more at standard lithium com. charles: 2018 is almost over. thailand ready to ring in the new year. of course we're not that far away. susan. susan: countying down, five, four, three, two, one. higher on the year. charles: for the day.

susan: for the day? i think is a. charles: that is ready for the new year. david asman. is in. >> welcome to "cavuto: coast to coast." i'm david asman filling in for neil cavuto. there is a long way away. there is thailand, wow. they are also doing the same in. >> cart tax indonesia. -- jakarta, indonesia. they're in the same time sown