>> purely disinterested. charles: i agree with you almost every time i have to leave here at 5:00. steve forbes, fantastic. the crew was great. neil, market struggling but off the lows of the day. neil: all right, my friend. by the way i love your passion around the ism number, just quick update. it is an ism number. [laughter]. all right. might have been a fluke. you got to have to chill here,. charles: you got it. neil: one things we love about you. the passion runs through. don't get me started on that ism number. welcome, everybody, i am neil cavuto after my buddy charles payne. we have a lot of concerns about the market, apple, fears of a slowdown, manufacturing the sector recording its biggest drop in 10 years back to two-year lows and all of this as the new congress is gaveling to order. it will be a democratic house right now. in the next couple of hours, likely, democrats will rally

around when nancy pelosi to be their leader. it would be a very crowning achievement for her. first time since former speaker sam rayburn returned to pick up the baton from his old job. that was back in 1955. i remember covering that day like it was yesterday. not really. anyway, this government impasse still continues. so the partial shutdown continues. this has very little to do what is going on the corner of wall and broad. almost all of this is driven by the weakness we've suddenly seen in the u.s. manufacturing sector. this isn't just a china-centric problem even though china is a big reason for this continuing ill will that you have seen certainly expressed by the likes of apple. remember ford, remember some of these other companies talking about a slowdown and headwinds developing there so many companies is continuing. for example a few minutes ago, on cnn, not a lot of companies

are exposed there, it would make sense if things slow down in that neck of the woods things would get very problematic in our neck of the woods. let's go to market watchers paul treat trick and we have mark madison. the apple spillover is remarkable. we'll go into more detail but affecting anything and everything in its sphere, a lot of suppliers like sj electronics, and amd, nvidia, sky works among the chip stocks feeling it. is this justified in your eyes? >> this is cautionary tale for investors. one of my messages to investors don't get caught stock picking. for many years apple was the golden boy of stocks. anything can happen. the future is unknowable. what i want investors to focus on the next 10 years. that means you have to own equities, look at market crashes or market drops like we've

experienced, the s&p is down 14% since the high three months ago, you have to look at that an opportunity to buy when it is low. rebalance with high quality fixed income, opportunity, opportunity. neil: let me ask about apple, is it low enough, that is a little overdone, falling 40% from the highs is a little overdone or no, you think it has a ways to go? >> look, i can't predict apple but what i know about stocks in general, stocks that have high book to market value, meaning a lot of assets to a small price have higher expecting earnings. as apple gets more depressed it become as higher expected return long term. i can't predict apple specifically but what i can tell you if you buy distressed stocks long term you add 3 to 4% to your portfolio. neil: i don't know what is leading what here. of much conversation hassantered about china, i was kidding with

charles payne about the ism number. what is unnerving about that, a slowdown perceived to be asia centric, to lesser degree what is going on in europe might be on our shores. you don't want to overextrapolate too much from one number. for example, the private payroll surge was unexpected. that is very strong. retail sales by and large pretty strong. are you worried whatever started in china isn't ending in china? >> you know, i don't think people should be concerned about china and here's why. it shouldn't be a you are is prize to people communist countries can have economic problems but markets have not only survived trade wars, they have survived real wars. so since the low in march of 2018, market is up, s&p up 385%. markets are volatile. take a deep breath, be calm, buy them while they're low, plan for the next 10 years.

neil: paul what do you agree of that? >> i agree 100%. right now if you look and put everything in context with apple, this has been an enormous overreaction. the markets price is dune 40% as you mentioned yet what is happening in china will only affect 5% of total apple revenues? how can you have reaction of 40%. if you look what is happening in the short term, i do believe that apple will have kind of slower sales in 2019, but, not for the reasons that everyone is talking about. it is 5g will come into effect in the united states, and no one wants to pay $1000 for a iphone when we get the biggest up prayed of our lifetimes. i've seen 5g in south korea.

it's a record-breaker. it is a game-changer. and what is going to happen between 2020 and 2021 is that everybody in the world is going to be upgrading their iphoning to 5g capabilities. that will be the biggest sales and revenue driver in the history of apple. and when you can buy it right now for less than 10 times forward p-e's, this is an unbelievable opportunity. neil: gentlemen, i want to thank you both. we'll watch it closely. i want to switch quickly to the floor of the house of representatives where the new democratic majority is taking hold. they have been gaveled to order. they will slowly select their team in charge, that will likely be the next hour or two, nancy pelosi. she hopes to become the first repeat speaker after same rayburn did it in 1955. kevin mccarthy, house minority leader, now the minority leader,

republicans mo longer in the majority, will vote on pelosi we're told around 2:00 p.m. apple stands 40% from the highs. some say might be bigger than china, might be bigger than declining sales. might be innovation opportunity or taking innovation for granted as others, more prominent competitors make inroads in asia galaxy comes to mind with samsung-related phones. what is going on here? could apple becoming in danger of being the eastman kodak, it sort of frittered away dominance that juggernaut did when it came to photography back in the 70 es and early '80s. that was then, what could happen now? to fresco news founder, john meyer, apple will see declines a year from now than where we are. why do you that view. >> i've been pointing this out

for months now and really where i stand, this really comes down to two or three major forces. first, i think apple is dramatically underestimated the forces in china from a cultural standpoint and from a tech capability standpoint. they have clearly lost the game to companies like huawei on mobile. second, i think apple has continued to seriously, seriously lag behind in new innovation across new sectors and the one i will point out is ai. this is at this point my biggest worry for apple, and it stretches beyond apple. it stretches to america as a whole because my biggest worry over the next few years is that because of, just how big apple is, it is clear that they have not invested enough in ai. it is clear they have already been losing the game in ai. it is also clear this is where tech is going. neil: by the way that is an area

where anyone, samsung universe, virtual reality, which apple poo-pooed in the beginning, have enormous leads now, to say nothing of google an android operating systems where there is all the rage. >> correct. and the other thing is there is really no coming back. if america loses the ai game in part due to apple's lack of innovation in what's coming next, there is really no coming back. i hate to be in a position where i literally grown up the biggest fan of apple in large part due to my late father raising me on early macintoshes. but i hate to be in this position where now i'm criticizing apple for, not innovating as much as their competitors such as google. then beyond that, there is also the more supplementary issues such as price hikes in iphones.

so it just, there is a slew of problems here, at a much higher level i think with apple and it really comes down to i think underestimating the speed of innovation across other competitors in the u.s. as well as the speed of just how quickly things change in china. if you go to china now, i mean, virtually no one you see uses an iphone. and as tim cook pointed out in the interview yesterday, that is what they are reporting. they are reporting decreases across really everything in china, including number of people in stores. neil: in that cnbc interview i think he dismissed the talk this was a direct result of wrath from the chinese taking it out on an american company because of a trade war even though some of that might be going on. if you heard nothing but american badmouth of your country would you be inclined to way a prominent product from a

prominent american company that is not from your country? >> that's a solid point, however, what i would say these trends have been going on far longer than the trade war. apple has been losing in china for a very long time. i think even with acknowledging issues in china with apple sales i think it has been a dramatic underestimate where these trends are going and when combined with the fact that apple is, has just been so weak in the ai spice, it makes me very, very worried about apple. neil: that is interesting. >> especially because there is no indication on exactly what is coming next from a consumer level at apple other than very, very soft conversation and rumors around apple entering the augmented reality space -- neil: i would say you're right. coming to more ped danic issues,

such as a camera, i have an apple as well as galaxy phone. i find the camera on the galaxy phone is superior and a lot of features dramatically superior. that is my opinion. i still use both phones, don't get me wrong but i think apple is sitting on a lead, sitting on a cushion where they could charge more for a product and people would have the pavlovian response to buy it. they're not doing that anymore. >> sure. the other thing to point out is, i keep hearing two different reactions over the last 24 hours on business news. first, is that apple has some mysterious trick up their sleeves with quote, unquote services, and by services people refer to icloud, apple music, et cetera. neil: i see. >> reason why i don't think that is going to drive meaningful revenue at this point because to have increase in revenue from services, you have to have increase in sales for the

iphone because, there is not a person i know that is, is paying for apple's services such as the apple music and does not have an it phone. so, i see those two as, as pretty parallel in terms of where they're going, whether that is up or down. the other thing, this talk of 5g being a driver, i don't agree with that being a meaningful driver either for apple because the difference between 5g and what is available now for an average consumer, i mean people, there is no one i know that is complaining about lte speeds. so, i don't believe that will be a significant driver either in the next two to three years for apple because it doesn't really matter much to the consumer. neil: i think once they see the difference some might feel differently. we don't know yet. a lot may be looking at it, might not be willing to make the commitment just the same.

john, thank you very much. very good having you. very interesting read. >> thank you. neil: that is very bearish view of apple we want to share with you. there will be others with bullish view. that is the goal on the show. we'll not take sides. we'll tell you the bullish argument, the bearish argument, as this young man might have indicated here, john has a point. we're 40% off the highs for the stock. the fact of the matter by some people's math including his own it ain't over. quickly to the house of representatives, democrats are taking over right now. they will very shortly as they sort of gavel to make that official, start deciding their leadership. nancy pelosi is likely to return as speaker. she served in that capacity from 2,000 to 2011. she is is the minority leader when the democrats were in the minority before that, after that. she will return as speaker, in likelihood here, if she can secure at least 218 votes. they do not have to be all

democratic votes. that is usually how it goes. they have such a cushion, she could afford to lose 16, 1votes, still clinch it. the odds are she will. but the odds were apple would not fall 40% from its highs. more after this. ♪ great news, liberty mutual customizes- uh uh - i deliver the news around here. ♪ sources say liberty mutual customizes your car insurance, so you only pay for what you need. over to you, logo. ♪ liberty. liberty. liberty. liberty. ♪

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neil: all right. stocks continuing their selloff. on the left of your screen we're seeing new congress sworn in. donna shalala, among freshmen congressman, former secretary of health under bill clinton. 25 women joining democratic ranks. they're expected in next hour, hour 1/2, i think to make nancy pelosi their leader. i stress, i think, i don't know that world very well, but i know my good buddy chad pergram does. he joins us what we can expect today. hey, chad. >> they're doing what they call right now a call of the house where they take attendance of all members here. we expect the house number to not be 435 but 434. they still have the seat unsettled in north carolina. they don't expect to seat

anybody here today. shortly after 1:00 they will start the process to elect a speaker of the house. the first thing the house has to do, they can't do anything else, is elect a house speaker. democrats are expected to have 240 members in the congress. the magic number here is 218. but technically the number is majority, out right majority of entire house of those members casting a ballot by name. a name is important. if you're absent or voting present, that doesn't count. still need 218 of all 434 voting. that means nancy pelosi can lose 22. we think that number will be a lot less, 17, 16, i heard 20 minutes ago maybe even 13. she will definitely have defectors. look at people who campaigned against her. max rose, freshman incoming democrat from new york, from staten island. he argued he would not vote for her. kathleen rice, democrat from long island is one of the people who opposed her the most, argued that she should not return to

the speakership. it was time for new blood. but at some point, we expect nancy pelosi, about 2:30 to win the speaker's race. first person to return to the job since sam rayburn in 1955, neil. neil: you are an encyclopedia, you know that, right? >> you have to know the territory as they said in the the music man. this is my territory, the capitol hill. neil: i have a lot of territories. chad pergram, thank you. he will update on this change of command. it will be historic nancy pelosi returning to that role likely. sam rayburn was last person to do it, 1955. charlie gasparino was there covering that in wee days looking at financial institutions and impropriety at thises. good to see you, my trend. what is going on with the selloff? >> it is not always one thing but a fear of underlying apple earnings, but fear the chinese economy is slowing.

neil: that is a big deal. >> some of stuff you tweeted. i gave you credit. you didn't thank me or anything. neil: you write, you're a gifted writer. >> but i gave you credit. neil: i didn't see that. >> you didn't say thank you, charlie. neil: i just said you're a gifted writer. >> what i said giving you credit what you've been calling a long time, even saying listen, even if we get a trade deal with china, their economy is slowing. it might not matter. neil: wouldn't that be a kick? >> listen, the economy is definitely slowing there. i don't think it has anything to do with trump or little or smaller tariffs. this is china deleveraging the banks doing a lot of things wits own economy which is causing economy to cool. neil: is there anything in the trade working, tim cook dismissed in cnbc interview. i don't think chinese are angry at america. so any american firm like apple eschewing their iphones for

other phones but i can't help but thinknot think that is part of what is going on. >> there is some of that. remember a lot of it is the economy of china slowing down, cooling. their consumer economy slowing down. other economies slowing down. neil: i don't mean to interrupt you. fellow, sworn in, junior senator from utah, mitt romney. what do you think about the his comments, that president was not up to speed. >> i think it is unfortunate. i like mitt romney. i know him a little bit. he said it already. he broke bread with the president. neil: he wanted to be secretary of state. >> then you come out, right before -- listen, unless you really think it's a crisis time, and we've, i don't think we are, because we've been, we've seen trump, trumpism now for two years. it is a rolling crisis. you don't say something like that that starts off but i will say this -- neil: i don't get what he was getting at or his agenda.

>> i will say this, some of the stuff he said in there is impacting markets i believe. the fact that you have a very volatile president and economically inastute man. he came out and said the reason why the soviet union imploded is because they had a war in afghanistan. no. the war in afghanistan occurred as the soviet union was already in implosion mode. the soviet union imploded because it was a ridiculous economic system, that could not sustain itself. no offense they couldn't borrow globally to finance military build up as we could. that is why it imploded. the state run system, china was smarter to transition out of that a lot sooner. neil: trying to give him benefit of the doubt, mitt romney is now a united states senator by the way. first time in quite a while, presidential candidate go back to washington. he was never in washington. governor of the state of massachusetts. coming back as utah resident by

birth. now junior senator. i think what, to give the president the benefit of the doubt here, he was trying to say that was their vietnam. >> but he is wrong. neil: do you think he is fast and loose with the facts and come back to bite him. >> on economic. i don't think market cans care there were 10,000 people dancing, arabs, arab-americans dancing during 9/11 which isn't true. you remember he made that wild claim. they worry about is he going to fudge, is he so economically uninformed he will say stuff like that. neil: could he undo his own economic and market recovery? >> yeah, to an extent. but that is some of the fear. tariff man. he thinks tariffs are good. tariffs not good for markets or economy. they have never been. they may be a useful weapon you have to employ but they're not good. everybody knows it. people that employed it,

democrats in terms of barack obama and president george w. bush, tell you they suck in terms of economic tool. neil: he said it raised billions of dollars, could pay for a wall. >> it is baloney. that is what the market is worried about. is he sophisticated enough to run a economy? does he listen to guys that are like mnuchin and hassett and larry kudlow. neil: by the way kevin hassett was on the airwaves talking about a slow down for a lot of companies. >> because of trade. neil: because of china slowing down. >> also trade he said. if you factor in -- neil: what do you think of that? is that something to worry about? >> yeah. he is being honest. he will probably get in trouble with the president. one other point -- neil: although he smiles a lot as he says it. >> they do that all the time. every notice rudy before he tells you to jump off a bridge he goes -- ha, ha. remember trump said i will renegotiate debt with other

countries if i have to. you know what that means? that is default. neil: you're a hater. >> what is this never-trumper. neil: you're never giving him a breaker. >> listen, i call balls and strikes. neil: he does that a lot. he is young. when we come back here, what if the federal reserve is being looking at all of this, saying you know what? maybe no rate hikes for a while. maybe none at all this year, after this. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

neil: all right. down about 436 points and obviously some of the money, not all of the money is running to bonds. you hear this a lot, people seek out safety, whatever you want to call it. you know when you get 2 1/2%, 2.6% on your money committed for 10 years beats the alternative losing your money. that seems to be playing out here. the other expectation of china slowdown and companies like apple, ford, saying there are

problems over there, reverberating bottom line over here, now kevin hassett at the white house saying there will be a lot of stories like that, to add insult to economic injury, and ism manufacturing index, hit 54.1 in december, versus estimates close to 58. we're all up and now we're down. people trying to flip that, at least federal reserve may be less inclined to raise interest rates this year. if my next guest is right, how about not at all this year? ted oakley joining us. ted, what do you see happening? >> neil, i don't expect the fed to do anymore. i say that because -- neil: wow. >> i think they will get in a situation where over the course of the next one, two, three months, you're going to see continued weakness. i think they have been blind to most of the things, last two to three months. that is what we're looking for right now. i can't imagine they would,

unless they have some credible threshold for pain. i don't think they will raise them again. neil: you know that is an interesting read. my premise on the fed's willy-nilly, non-step pace to keep raising race to build up arrows in the quiver so to speak for this type of situation where they might have to reverse that and it wasn't really data dependent. there were very few signs of inflation, i don't know how you feel about that, and they overdid it, but in their heart of hearts, not some of them but they feel we over did it and we have to cool it. >> you're right about that, exactly. they were looking at wage growth which is late in the cycle. neil: right. >> unfortunate part about that. that is late in the cycle. that is not something to look at. they have been looking at commodities, housing index of manufacturing, really the world economy they would have noticed this thing is coming apart here. we need to back off a little

bit. they didn't do that. i think powell was so headstrong wanting to show he could do this, unfortunately he came in at a tough time too but that's where we are. neil: how would you feel as someone who follows this thing very closely, if the president makes good on his promise to meet with jerome powell? some might read into that as pressure cooker situation for the federal reserve chairman. other as polite meet-and-greet. i don't know if you're in the latter camp. how would you feel about that? because that is a situation from which powell can't win, at least in my eyes but what do you think? >> no. he can't win. if you remember or read in the volcker book about meeting with reagan, he didn't say anything. neil: right. >> baker said, hey we need to get rates down. and he said, he didn't say anything. he just left. and so i'm guessing all jerome powell can do.

neil: do you think powell worries about being reappointed? i know it's a stretch to say that the president can fire the guy. at very least he could refuse to reappoint him. would that work in powell's thinking? >> we, i don't, i don't think, i think if he fired him, the entire fomc would be up in arms on this. i think he would have tough -- that will be tough to do. but jerome powell seems like a good man. seems like he has his head on straight. unfortunately he came in at a rough time and you have to look at that, he followed two people that just juiced this thing to the max. he has to come in and clean up. neil: but you're saying when it comes to cleaning up, this year the rate hikes stop? they're not going to reverse but they stop? >> i think they actually stop. i think by the second half i think they reverse. neil: wow. >> you get deep into enough into an economy like this, i know they sound tough and everything, but when things go bad, people

turn quickly. the fed turns very quickly. if you look at their history, they will turn in three or four months, five months, if things turn poor on them. neil: that is very interesting. happy new year, thank you very, very much. >> thanks, neil. neil: we're following another development in china. this manufacturing index that surprised a lot of people coming in a lot weaker than expected. still strong, any reading above 50 still considered strong. it hit 50.1 in december. most people thought it would be 57.9, not meeting expectations. there is hell to pay for that. we have separate issue going on with airline stocks. i mean, really serious situation. they're tumbling. we connect. you decide. smoking with chantix.

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neil: what did you think about that? >> you know i think calling the president dishonest for, senator romney to come into the senate, even before he is sworn in to call the president dishonest is not productive and i think it will backfire on him. i think there will be a backlash from conservatives across the country. neil: you said worse things when you were running against mr. trump for president. >> i have choice words and i still have choice disagreements with the president on occasion. but since he has been elected president, i try not to have personal character assassination or attacks on him. neil: rand paul, that should be example for republicans when it comes to dealing with a president duly-elected by the president of the united states. mitt romney, sworn in moments ago, as junior senator from utah. kristina partsinevelos with

latest changes on capitol hill as democrats take charge in the house. hey, kristina. >> definitely busy here today with families milling about as 116th congress convenience today. one of the most notable figures here is mitt romney. he is 71 years old. he ran in the 2012 presidential race as candidate. today he spoke to reporters just before the swearing-in process. seems like his tone has changed of so slightly when it comes to the president. listen in. >> working with republicans and democrats. working with the president, members of the house and the senate. we'll have some differences. i expect that each senator and each representative will express their own views as they think best a but i'm not worried about what other people think what i have to say. i want to hear what they have to say about their priorities and perspectives. reporter: appears mitt romney and president trump seem to be waffling between friend and foe. we also had a "washington post" op-ed written by mid romney,

where he is literally critiquing president. quote, with the nation so divided, so angry, presidential leadership of qualities and character is indefensible and incumbent's short fall is most glaring. many people taking to comment, commit romney become the next jeff flake senator? president trump made one comment on twitter, be a team player. directing to senator romney at this point. the topics will be shutdown as well as border wall funding. however at this moment, it is about families and photo-ops as the swearing-in process continues. back to you. neil: kristina, thank you very much. louisiana republican senator bill cassidy with all the changes going on behind him. senator what do you make of the dust-up between mitt romney and president. >> say kerfuffle. that is what i consider. there is business for the country. we have to secure the border.

we have to make sure the economy keeps going well and lower cost of health care. i think trump and romney are committed to that. i think we'll work together. neil: why do you think, now senator romney did it? >> i have no clue. i joked with him when he came on the floor, you had active couple days. he chuckled. there was nothing going on. i thought i would write the editorial but purely a joke. i don't pretend to guess what is in his mind. neil: hard to guess what will be in democrat's mind. they want to end the government shutdown. shuttle the measure over to the senate side but it will include no funding for this wall. so is it dead on arrival with you guys? >> yeah totally. they do include $45 billion for u.n. fund which, used among other things to support abortion activity. so this is a political statement. the fact is democrats have been a little cavalier about safety of the american people when it comes to issues of immigration. whether caravans coming north or

whether the mayors notifying folks that i.c.e. is coming in and we see the consequence of officer singh recently dying. so, so that said, it is part and parcel we should move beyond stunts. we should do something to protect the american people. neil: when you look at the shutdown issue, since there is no light between the two parties, it would seem, senator, you are closer to this than i of will be, is there a sense it could drag on quite a while? >> i think it could. it shouldn't have to. we should all agree it is important to say for the security of the american people to secure that security. there is not that much money. if 5 billion for a u.n. fund, there would be five billion to help secure the wall. it is clearly not an issue of money. the principle shouldn't be, we don't want a wall, how the we make the american people more secure on common ground. neil: i'm sorry, sir.

i wasn't sure you were finished. you tell all your colleagues, democrats and republicans we're slipping into something bad here? china's slowdown could have pervasive effect here in this country on a number of big names, ford, apple, among them? and we get a manufacturing number out today that seems to hint to very same kind of a slowdown here. what do you think? >> there clearly is a concern. we want the economy working for the american people. i attribute most of that to the negotiations with china. the fact is the government at some point will reopen. i think the more kind of, house is it going it turn out issue how things go with china. not just trade negotiations, but weakness in their economy. hopefully our trade negotiations go well. neil: as we watch, nancy pelosi's name being put in to nomination, leader of the democrats, she would be the first, former speaker to return to her old post since is sam

rayburn did it back in 1955. she said it would be a, a limited time, that she wouldn't be looking to be speaker, democratic leader for life, that sort of thing. do you believe that? >> yeah, i do. she had a very difficult time getting there. frankly i think part of the reason they're so intransigent giving money for border security. i think it would have offended part of her voting base. unfortunately it gets tied up. it should be about safety of american people. whether or not she could get enough votes to become speaker and misplaced priorities. but that is the way it goes. neil: do you think in retrospect, it is easy to play monday morning quarterback, senator, to stake the entire government on funding for a wall where the separate operation was a couple billion dollars in a better than 4 trillion-dollar budget, was it worth it? >> i can't answer that.

we won't know that answer until the resolution. but on the other hand, when we have 60,000 folks coming from central america over the last few months, and we see them rushing the border, climbing over the, climbing over barriers, the american people feel as if they're being assaulted by folks and they don't know what to do. so clearly the president seemed to feel like he had to draw a line in the sand. it had to happen sometime. i guess he chose this moment. neil: senator, thank you very, very much. happy new year to you. thank you very, very much. returning to the house floor right now where nancy pelosi's name has been placed in nomination to be the leader of the democrats which essentially means the leader of the house of representatives. liz cheney among those right now speaking. republicans she will be in the leadership of the republican party but in the minority capacity. nancy pelosi will need at least

218 votes to secure that leadership position. she is said to be guaranteed of that. that she could lose as many as 22 votes. she want lose more than 22 votes. she is not likely to do that. we'll see. after this.

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neil: all right. apple coughs and rest of the industry seems to catch pneumonia. sky works solution, universal display, down up to 10% or more in today's trading. a lot of the chip-making stocks including amd, nvidia, are also feeling that. a good proxy for the semiconductor industry, semiconductor etfs, there are quite a few of them, down anywhere four to 8% today. i think by last count there were at least a dozen of these type of etfs and they're all feeling the pinch today. all that because of china and slow down of china. fears what is happening there, will reverberate here. to market watcher alicia levine. what do you think of that? >> what we saw last day or two how the u.s. is importing weakness from china. we had weak pmi numbers coming

out of china over the new year. then apple reported a day later that the quarter was going to be weak. i think that is a perfect example of how the trade issue is filtering through companies and being magnified in earnings. neil: so if it's a weakness thing, that i can understand. but do you think it is compounded by the trade stuff in that a lot of chinese consumers would be less disposed to buying, let's say apple products, because they see us as a villain? >> so i don't think it's a political issue. i think it's a economic issue. if you look at data coming out of china, weakness is centered on all the consumer side. so autos, and purchasing and everything else. and don't forget, china was trying to slow its debt bubble over the last year. and it is being shown in the consumer sector, where consumers just don't have as much to purchase. so any company that is exposed to china right now will feel it. neil: so when, you know, the

president council of economic advisors chief kevin hassett today is talking about many more companies than just apple or ford, feeling this pinch, that this could be widespread, is he right? >> so i do think he is right. one of the things that we're concerned about for the markets in 2019 that we think earnings are actually too high. right now, the estimates are for 8% earnings growth in 2019. we think the real number is closer to four or 5%. as the weeks go on we should see numbers come in. when they come in we feel it is safe to go back into the market. as of now we're cautious. neil: looking at bloomberg report, i am getting it correct, i hope it is bloomberg, i think it is bloomberg, they're saying now the fundamentals are called into question. now it is not just a market sort of a fluke event. do you buy that? >> i think the ism number this

morning was a great example how we see the fundamentals weakening perhaps at an accelerating rate. there is growth i think we see in 2019. we do not see recession in the u.s. a big part of that is whether the fed is going to stop. not just stop, but also communicate it's a little bit more open to incoming data. so what is happening in markets, rather than just looking at their traditional models. because the traditional models show a very item employment market. with that comes rate hikes. neil: how much of drama playing out on capitol hill do you pay attention to, in the house under democratic control now? they're choosing their respective leaders in the various parties. the senate under republican control. and government impasse that shows no signs of being resolved anytime soon? what do you think? >> so in general markets really just don't like uncertainty so to the extent that the shutdown continues that is not great for markets n general i would say, that in terms of regulation, with a democratic house and

republican senate, you might see some further regulations. so the first two years of the trump administration were focused on deregulation, the second two years could have deals made between the democrats and republicans, whether on the tax side or frankly on the pharmaceutical side. and pharmaceutical pricing. so that is something that we are looking into for the next two years. neil: looking at just the market environment in general, and particularly the technology route where so many prominent names are not only into bear market territory, but deep into it, with apple down 40% from its highs, is that overkill? >> so it is interesting because we get asked this question all the time about fang and my answer -- neil: i thought i was only one smart enough to ask that. that bums me out. >> look it's a great question because fang led the market high every. so not surprising it is leading the market lower. the other thing you really have to unpack fang because these are very different business models, with very different margins.

on the apple side i've got a cyclical model. you know you have a product cycle. you've got social media. you've got monetizing your base or not. you've got advertising or not. they're very different models even though we call it technology. i think you have to really look at cash flow. you have to look at the sustainable models. i do think the threat of some regulation will keep a cap on some of the social media stocks. neil: alicia, thank you very, very much. alicia was referring to the "fang" stocks, so-called apples, facebooks, googles, off the highs and deep, deep into bear market territory. we'll have more after this. cleas about potential investment opportunities in real time. fidelity. open an account today.

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dreams you we are watching the drama play out on capitol hill. not that the two are really connected here. it seems to be taken as a given that the shutdown would continue for a while. the message from the democratic houses that they want to go ahead and pass legislation to and it, but it has to be approved in the senate and mitch mcconnell is on the wire and he said this before but confirming now the senate majority leader is in the senate will not pick up any proposal to shut down they cannot get a signature from a signature from the president feared were already told they will not get the signature from the president so mitch mcconnell isn't going to put it up there in the united states senate, which means

essentially they are going to hurry up in the house to vote on something to put into the hands of the senate and the senate will not take the baton. so there we be appeared meanwhile, stocks are falling on weak manufacturing data from the concerns of what is happening in china isn't just in china. it's beginning to pick up global stamina is already up the likes of semiconductor stocks along with apple suppliers including a lot of multinationals. 28 of the dow 30 stocks we've got market watcher joining us as well. susan, this does seem to be indiscriminate. anyone and everyone. i was just looking up at the up volume and we're pretty much in line. pretty much vehicle at this point with this horrific factory index but the biggest decline in 2008.

to buy, to style is three to one and was much more bearish at that point. coming back to these even levels is pretty encouraging and there is one sector by the way that is gaining today at the regional bank in advance, believe it or not. neil: that's very interesting. craig, i remember when we were in the middle of what to be a quick albeit limited spike up you weren't buying it and part of your rationale was there a bigger headwinds than we know right now. do you still see the same headwinds? >> i do appear than the slowdown definitely has an impact. this announcement from apple was not good news. in germany, japan, i run chicago pmi at the top of the hour is often said things are slowing. there's a bigger impact in it happens to be the federal reserve. people are forgetting that i'd like to remind your viewers with

the federal reserve's mandate is. it is full unemployment, stable prices and moderate long-term interest rates. the fed is doing its job. they're reducing the balance sheet, raising interest rates and he has chosen his tool chest for a three-point 7% full unemployment. we are 3% growth. the fed has done their job. they need to be raising rates. neil: don't think they've overdone it or they risk over doing it? >> how can they think they've overdone it when the rates are 2.5%. that's about half what they should be. neil: already come you scare me when you yell at me. >> i'm getting emotional about this because i believe the fed has got its foot on the front of the market and maybe that's a good thing because the market was very spoiled for 10 years with a fed is giving free money. neil: that's a very good point. it's interesting if you think about it because we all got used to that. i know you're too young to remember this.

we got used a 0% interest rate. i daresay there's a lot of folks who couldn't remember much, much higher rate than returning to a different norm here. what are you hearing on that? >> so we were talking about this. as the economy ok for 2019 especially with the factory numbers and i would say taken a survey from traitors i talked to on the floor here. most are saying yes would look at growth in 2019 but were not out of recession. a lot of negative sentiments right now on the market and that's setting the bar pretty low in the first quarter. expectations are the fed is not going to move this year so we could actually see a pretty good scenario that could see a first-quarter balance as we get trade deals on. neil: are you in the camp that says markets can change the fundamentals? in other words we certainly saw

financial issues during the melt down that it did affect their available capital because their capital was evaporating in something like that could be employed here. a bloomberg report that it is turning fundamentals negatively. do you buy that? >> i'd have to speculate on that but it may well be the case. look, we have to think about what the federal reserve is doing here. it's not like they're out to lunch. they started reducing the balance sheet in july. anybody who didn't anticipate that was going to make the markets often was not paying attention. this federal reserve, chairman powell is being clear he's got to put tools back into the tool chest for when we do hit the next recession. i remember you talked about rates. 9% or 10% the stock market was doing fine during those times. neil: suzanne, are the markets ready for that possibility that in order to put more arrows so to speak and you bring things up

to a more accepted norm or 5% let's say versus 2.5% now, that might still be historically low. that's going to pinnacle of people. >> they have change to a really ugly december are banks and oil. that's indicative of a growth scenario for u.s. economy. obviously don't want to miss turns and trends and there is the more money rotating into oil and banks. that seems like a more positive picture. not a recessionary one for 2019. neil: susan, final word. great from a final word to you as well. thank you very much. neil: edward lorenz has the latest in how the white house has been responding to all of these market developments. the president yesterday was calling it a little glitch.

>> exactly. they're trying to minimize taking the optimistic view. we are hearing out of the white house that this is normal procedure for the market going up and down. the president watching this volatility today, yesterday also. kevin hassett says there's warning actually at the january job numbers and other economic data take a hit because of the government shutdown. the advisor kevin hassett says first the impact of young growth. the gdp will go down. listen. >> our estimate is gdp is the first quarter could go down by about a 10th of this were to resolve the next few weeks. right now it is a shutdown for government dinner leaving the national mostly open to the private sector repercussion seems like they're going to be pretty small. i don't really expect to see big economic effects of this assuming that it ends relatively quickly. >> you take in the optimistic view about the only one who believes this is going to be a short government shutdown. hassett says it will affect the

job numbers in january because the household survey goes out government workers will not feel it out, so it will look like the government has lost a number of jobs when in fact it hasn't been all this is over government workers will then go back to work. the president tweeting that this is all a little for the democrats seem the democrats in the shutdown is only because of the 2020th presidential election. democrats know they can't win based on the achievements of trump said they are going all-out on the desperately needed while in border security and presidential harassment for them strictly politics. democrats want the president to support their version of the funding bill coming up that allows $1.3 billion for border security. read the 13th day of this government shutdown. it's an impasse. both sides dug in very hard in their situation. the president has invited again the house and senate leaders back to the white house tomorrow to have negotiations to settle

all of this. we'll see what happens. neil: thank you very, very much. 13 days and this could go on quite a while. if you think about it and there's nothing bridging the two sides. mitch mcconnell already said whatever you guys do in the house too and the shut down cover where not even going to take it up if it doesn't look like the president's going to sign it. where is this going? >> it does seem like the government shut down that stretch on for quite a while longer. the president met with congressional leaders yesterday, but nothing seemed to come out of the meeting that was super productive and of course they may be meeting again tomorrow to discuss how they can fix this and come up with a solution. as far as we can see both sides have dug in on their stances for $5 billion for a border while a democrat to have control of the house insisting on not giving him any of it.

it's hard to see there'll be compromise anytime soon but this is obviously always changing day today and we'll see whether the president is willing to accept fun and for anything other than a concrete wall or what the democrats end up giving him more money for a while. neil: you know, the president has shown some flexibility on this. some interpreted as the political pressure blinking where it doesn't have to be a wall. there are other ways to look at protecting our border. democrats apparently were to use with the possibility of doing something for the so-called dreamers, the kids of illegals who came here through no fault of their own are kind of stuck in a twilight zone here. but then it all kind of crumbled. so where do you see this going? >> we've seen over and over again with the president a while ago been willing to sign a short-term funding plan but then pulling back the last minute and

again insisting we have the money for border while up front. even with democrats right now they're voting on bills that reopen the government didn't keep dhs funded until next month but allow negotiations over the border while to continue. at this point the president aims to not even consider that. he wants to make sure he gets this done. maybe one of the last times he can fulfill her promise to the base of building a wall with government funds. we've seen him sort of seem like a least a compromise but then kind of go back to the original event. we'll see if he is going to democrat -- compromise senate and if democrats are willing to compromise as well. neil: something that will ultimately be five times that amount, right? >> certainly. $5 billion is a lot for democrats to sign on for. they've offer different amounts at 1.6 billion for border security generally which is something we've seen happen and get past congress a few times

already and there's other ways that money can be used. whether they're able to work with trump and whether that's enough to satisfy the needs of the department of homeland security to ensure the border is protected and that there are barriers there. neil: all right, we'll watch for it closely, steph. happy new year. thank you very much. >> thank you. trade to emanuel cleaver is coming out. of course you know him as a democratic missouri congressman, but it's also a preacher by training and today was looking to try to get both sides to act like adults and be mindful of the responsibility before them on this day. he is next.

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neil: a lot of you want to know if it's not going into stocks down around 543 points. of course apple in the area after the week china. where is it going? a lot of it is going to the relative state your bombs by comparison. you might not get a lot of rain for your pocket, but it certainly harassing times like these that's okay. stanford school of business lecture dave.then on what all of

this disdain. very good to have you. is it your view that hans or the markets for the funding are telling us are a safer bet than stocks? i know that's obvious today, but that might hold outcome of the people will seek out relevant security affixing government investments rather than roll the dice on stocks. >> sure, we've had this very interesting balancing order with the interest rate at an all-time low for nine years we have this bad sugar high for nine years. there's been nothing in bonds. so of course there's in this migration to the equity market. as interest rates come up with the migration from the equity markets to bond, which is healthy for the economy. what is happening here is not the fed cranking up interest rates and naturally. we are unwinding nine years of fed policy very permissive in terms of interest rates and liquidity for the market and that's what we're seeing. if we stop focusing on our obsession with what happened yesterday in the stock market last week's job report and

instead start thinking about the long-term health of the economy would say this is perfectly fine. neil: that as well put that of the lies the fact we have all these fancy graphics and music so if you'll just endure that. professor, one thing i wonder about is how the fed is in this proverbial box here. there might not be inflationary reason to keep raising rates. much of it undo what has been done over the last roughly a decade with 0% rate and that is the rationale behind whatever hiking we would be that there's very little inflation out there. i don't know if you concur with that and whether that's a risky rationale, but what do you think? >> i think the issue is i don't think the fed thinks they're in a box. its time as i said to unwind this nine-year sugar high. normally fed rates are between 3% 6% and we need to return back up there and bring about a trillion dollars of liquidity

back out of the market. one of the reasons we need to do that is if the economy reaches a point where we do have some trouble, the fed has cut them levers to pull. look, if we are not willing to unwind this one we've had five straight years of gdp growth, when unemployment is at an all-time low, when the stock market over the last two years have done quite well, then when are we supposed to do it? neil: so could new unwind it and just sell back a lot of those notes insecurities rather than cons of money raising rates and may be encouraging a slowdown. >> yeah, well there's certainly been some criticism they don't need to pull in both lovers at the same time raising interest rates and pulling liquidity out of the market. we have a massive amount of liquidity in the market right now. i don't think you find any see how statement having problems because they can't get that through the banker have enough cash on the balance sheet. the fed has said were going to bring about $50 billion for the

liquidity out of the market month after month after month a nice predictable way. by the way we talk about how magical liquidity is and how magical low interest rates are, but while we've been doing this, corporate debt has reached $6 trillion. that is 45% of gdp. is that a big number? unprecedented. we've never had that before. our national debt and we need to focus on long-term indicators are national debt of $22 trillion has now reached the point for interest on the national debt exceeds our entire military budget or the worst part of this as we have no plan to get out of there. neil: i think you're right about that. i will say this as well the republicans and democrats are looking the other way. they are doing about $5 billion for a wall where we are looking up the next two years trillion dollars plus deficit data to the $22 trillion in debt we have now

it's happening in corporations, leaving out companies that are taking on the debt at a level that's become virtual junk for them. you've got to worry prohibitive of taking rates is going to put the cabal shut all that. >> absolutely. you shouldn't be worried. you should be petrified about it. your network reported that the $5 billion is going to buy about 215 miles of steel fencing on a 1900-mile border. it is pathetic that the democrats and republicans have closed on the government, for like 800,000 workers over 250 miles of fencing. by the way this whole talk about a daca for 200 miles of fencing is probably the worst outcome we could have because it do nothing to address our long-term issue of a southern border. taking care of daca is nothing for the 9 million other people here in two miles of fencing doesn't do anything to address the coarseness of our border where the incentives for people

to come over here. but it's a wonderful excuse for senators and congressman and president to ignore the mundane part of policy and put into a long-term solution for borders and that's what we need. that would produce market stability. tree into your right. i am wondering just your collect their thoughts on what apple is telling us, while ford is telling us, a lot of technology concerns and because of what's going on in china. do we have to worry about that? this is something kevin hastert has said today is going to hit a lot of company earnings and we are not going to like it. >> i think a couple of weeks ago it distracted us from what is happening where we got some very uncertain issues and part of it is i've got no problem with trade agreements.

you can do that from the standpoint of firmness. you don't start by poking your trading partner in the eye and expect to come up with an agreement where the two signatures on the end of the page. one thing is that markets are worried about her relationship with our trading partners. another thing happening to sometimes we forget what's happening in europe. europe has had a decade of gdp growth and now it's negative gdp growth in places like germany and italy. so we've got unstable -- not only unstable trading agreements, but unstable economies in europe and we need to depend on it. those are the kind of things that are troubling the short-term markets. the long-term outlook as i said should be more focused on where we going to fund a $12.5 trillion to cover social security's shortfall. how come 1% went from owning to 40% of the nations while they gutted upper-middle-class. these are the policy issues that

i wish our 535 congressmen would be focused on in her president. now with the stock market did yesterday. neil: well put. professor would've loved to have been in your class. thank you very, very much. happy new year. very good. the stanford school of business lecture they are joining us today to talk about these mixed messages the markets are sending us in more specifically what the federal reserve does or doesn't do this year. in the meantime the voting is an silly now to find out who's going to be the new democratic leader of the house of representatives. in that case the majority will be the next speaker of the house. despite a few defections we have six by latest count will be nancy pelosi very likely. we will have more after this.

neil: all right, democrat taking over the house of

representatives. there were other factors there that have nothing to do with what's happening on the left side of your screen. having said that they are electing their respective leaders of both parties right now the battle is to find a new leader for the democrats who now control that body. it's looking like nancy pelosi. there have been venerate defections. i think up to 22 technically than nancy pelosi would be in some trouble but that does not look like it's going to be the case. real clear politics cofounder tom bevan. i think it's more perfunctory than she will be the first speaker to repeat and sam rayburn in 1955. is that a safe conclusion? >> yeah come i think so. there were some tense moments before the holidays where she really had to work her tail off to put down a rebellion that bubbled up around her. i think this is a mere formality were watching now. neil: what do you make of the fact she was pretty sure the way she went about it.

right away holding this press conference on election night to sort of put her face out there, to sort of take a bow for that and never making the assumption as others had that she would not get that olive branch. >> will come in nancy pelosi is a shrewd operator. she's very asked areas. she knows how to manipulate folks. she played the gender card against members of her own caucus here she is willing to what needs to be done to corral the votes and not why she's in the position she's in. she's very shrewd, very effective as a legislator and fundraiser. and so i think ultimately that was the reason i think democrats do i turn the page. they did want to look for someone new, but it was not the time. nancy pelosi's skill capture's skill at capturing opposition when they were willing to look elsewhere. neil: i know there is a great deal of attention and what

committee assignment was given to ease her concerns. but obviously the pelosi forces were able to clear the feel of any potential threat. >> yeah, correct. this is nancy pelosi doing backroom deals, finding where she could make those compromises that she was only going to a placeholder. she's not going to be there forever. they were going to last in changes to the way the house operates to placate some of the rebels. she effectively got that done. she's going to face some defections within her party. we'll see it on them impeachment. she's going to try to be taped back down the other will be pimping forward on impeachment. she's got her work cut out for her moving forward. in addition to putting forward a legislative agenda that shows democrats have something to offer them being against trump

100%. neil: you're way too smart to soil yourself with those types of things, but i do notice this is building up steam. obviously that's an understatement and apple is cut up almost in half close to 40%. but there's something big going on here. the president called it a glitch. but how is this resonating politically or is there? >> i absolutely think it's resonating politically. this was his mistake in the beginning tie in the rise in the stock market to the success of his policies because now the market isn't doing as well, folks are pointing the finger at him and say in bloomberg -- trump slump as opposed to the trump bump. we at-large, the market does not like uncertainty and we have total chaos in our system right now. we have gridlock and there are

no areas of compromise so it's hard to see and with trumpet the top is a very important figure in politically speaking were in a very a certain moment not only in the current situation of moving forward into 2020 and that gives the market and upset dominick. neil: that's the word for it are a couple words for it. great seeing you. happy new year. >> seem to you, neil, thank you. neil: it looks like 29 or down. verizon is up. why is that? we think we know. after this. shield℠ annuities fro brighthouse financial allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

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♪ memories. what we deliver by delivering. neil: all right, if you ever in the middle of the fellows try to find some common news. kevin has it, the president's council of economic advisor currently spec i always smile spears that he was smiling talking about underlying fundamentals are good, et cetera, et cetera, but smiling to route its just going to be

the apples that are going to feel the pinch that is going to affect scores of u.s. multinationals and they'll see it pop up in their earnings. they went back to the white house and never once had what. anyway, the economist and author of the capitalist code, lawyer, genius, actor, just a funny guy come in a brilliant ben stein. you know, you're looking at this. what are the markets you think telling us? >> they're telling us that they're scared to death for a few hours of a slowdown in the u.s., they slow down waiting for the size of capitalization as the enormous back your a while the stock market indexes and they're worried about policy. federal reserve policy has been far too loose for far too long. they're worried they're going to tie it into quickly. there's lots of legitimate things to worry about. i would say that today's fears and prizes are not unreasonable, but not the other hand if they

were to revive and come back in a couple days i don't think i would get reasonable either. an incredibly important comment by jpmorgan when he was asked about the stock market is that it will fluctuate and its fluctuating like crazy. the long. we have for watching our children grow up if they do ever grow up. we don't have that much to worry about. i think overall the economy is very strong. neil: come you know it uncanny that is word for word what i said at the heart of the show. >> well, and we've been on together for decades and i've learned a great deal from you. neil: please come and the other way around. you know i'm wondering a lot of people looking at the crazy market. the president referred to it as a glitch yesterday.

they can be tempting for president to marry himself to a market that's running up a little less so when they're going down. but either way, don't you? >> the unusual personality will claim -- [inaudible] but the fact is he does own it and it's a good economy. it's a good economy and you should not be ashamed if we have a bad day or even a few bad days that does not reflect badly. that is just the nature. neil: but do you worry that markets -- i'm sorry, but due markets get ahead of them selves. bloomberg report that even in other words the market itself can lead to a change in the fundamentals.

>> there is a very famous effect, which is to say how much change to the stock market with changes in business and household and being and it's found its not very much steeped in a have a very large change in the stock market with business and household spending very much. it will affect them but not very much. we still have an economy that is finding plenty of uses. this is an economy that is not anybody's idea of a bad economy. it's an economy that is strong, low inflation, almost no inflation, planning of liquidity. a very, very good economy. but somehow we are here and weren't a good position. neil: the trade posture were taken with the chinese risks do we not?

i think china is too smart to let us grew up their economy very badly. were too smart to let them mess up our economy very badly. we're both big boys, both smart boy spirit i don't think there's any danger of china leaving the worldwide global war involving trade that's going to bring down our economy or their economy. there is serious trouble in terms of government debt, corporate data. they do not want to get get themselves in worse than they already are. we are going to get through this. we are going to get through this in a year or two and laughing about this and scratching in maine will be fine. neil: i don't know will be lasting. we might just be relieved. >> i don't think there will be crying. do you wonder that china is telegraphing -- neil: you cannot be this funny expecting not to laugh. neil: this is basic cable. i can be whatever you want me to

be. do you look at what is happening with china right now and saying that it is slowing down and that's maybe what's happening with apple and what's going on with some of these other companies. kevin hassett telegraphing more problems to come. the company is exposed. would it be a cake that we do get a trade deal with the chinese, but the benefits we wanted to get from that don't materialize because china stumbles into a slowdown or worse. >> i don't think china is going to stumble into anything bad. china's going to do just fine. china is a very, very strong economy. china will not let itself become a weak economy. people forget a number of years ago suffering through a stock market crash to support the market. everybody laughed and screamed and said this is the most ridiculous thing they've ever seen. it's an entity. they make trillions of dollars on that transaction.

there's a market behavior and i think there will be again this time. this is a world, which is a world of extraordinary prosperity by and large. if we have one or two bad days. it's not good. but it's nothing like even comparing with bad times in the past. neil: they're not the only ones to use the government to get the market to do their bidding. we did that for them all done by forcing rates down to zero. >> we essentially did that during the meltdown. we didn't buy stock in huge, huge amounts. maybe we should have.not. what other people and new democrat house of representatives is one of government spending to prop up the economy. they're already propped up.

the economy is already extremely strong. we don't need to do that. if you were to say to me i have gone up your goods to your head, what's the number one problem we face with a inflation and i'd stay closely connected to that a real serious meltdown in terms of government financing. you and i know we've talked about this in the past many times. eventually there's going to be a default. we cannot avoid a default at this time. we can't go on with this. all you have to do is say i'm not going to give your cheeseburger for lunch today. but i think we have a real serious overspending problem. neil: you are not my friend. thank you very much.

we are also looking at auto sales. there is concern here that they might be peaking out. we just finished a year where we had better than 17 million vehicles sold. that is not bad here that's been the case for three years running. this is the market that wants to see the half-empty glass. why? after this. zicam is completely different. unlike most other cold medicines... ...zicam is clinically proven to shorten colds. i am a zifan for zicam. oral or nasal.

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neil: all right, real quickly nancy pelosi becoming speaker again for the first time since 1955. that was then. this is now. jeff flock and i were there in 1955 for that historic event revisiting it right now. jeff is here to talk about what's happening on the auto sales front. a bit of a mixed breed. all of this cross currents. whether looking like? >> i was similar to the year millard fillmore was the lack did. as for auto sales, which weren't even invented back then, it's been kind of a mixed year in some ways as we look at the automaker stocks mixed today as well, but as he reported before the break, the focus on where

this momentum is going for next year. so we look at sales for december. ford was down 8% in december. fiat chrysler was up 18%. gm doesn't even report monthly anymore. i think they figure if you're going to have bad news, let's have a four times a year quarterly reports rather than monthly reports. so a mixed bag. but what is the headline? to me they say when it comes to some things, size doesn't matter. when it comes to auto sales, size does indeed matter. these are the numbers for q4 now for gm. if you look at their numbers come in the smallest vehicles they make, which would be the chevy sonic in the chevy spark down 55% and 40% respectively. the suv come equinox and traverse both out. that is not just true at gm. it's also true of ford. take a look at those numbers. the ford focus, one of the vehicles it will just about go

away or get rid of small cars down 67% in december. mustang down 40% as well and it was the suv, expedition, the big one ford makes him ford makes in the lincoln mk exit 13%. why is all of us? it certainly doesn't hurt that gasoline prices are now 80 plus days of consecutive decline now at 224. there is recently as a month ago these prices. what happens if we get $4 gas again. gm is getting rid of a number of them. i would point out that even the suvs these days are much more fuel-efficient. maybe it's the right thing to do. i don't know. i've always had an suv except for the convertible i had. neil: i noticed premium gas prices have not touched or they don't seem to budge as much.

rich people don't care. they'll spend whatever it takes. they'll get by with regular now. you don't have to use premiums. neil: hugest nonstarters in the backseat. >> that dodge caravan he's got. that was around during the fillmore presidency. neil: up slowly. he goes way, way back. thank you very, very much. a pleasure my friend. nancy pelosi is said to be speaker of the house again. after this. with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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or visit kohlerwalkinbath.com for more info. neil: she's back. nancy pelosi, speaker again. almost official. hasn't quite dotted the is, crossed the ts, second time returning as speaker, leader in the house of representative, a roll she filled back in the early 2000s. now the question how this will fair. when working with president bush they had a tense relationship. now working with president trump, some are saying it will be even more so. "wsj at large" host, gerard baker. gerry baker. >> how neil. neil: there was concern with rebellious democrats, and every one seemed to get in line by large support. you surprised. >> whether you like what she stands for you have to admire

the resilience. lost this job, i don't know what you think, when i'm 78 years old i don't know what i will be doing but not trying to get my old job back. somehow admire, there is no stopping them. i think it will be rough, right? there is going to be tremendous pressure from her base to be really tough, really anti-trump. they will have all kinds of investigations. all the committee chairs. neil: house renegades want that. >> they're salivating for this. she realizes this isn't necessarily good politics for the democrats. she will be under pressure to go after trump in every level. i think it will be pretty unpleasant year. neil: talk about the environment. in the middle we have a big selloff. not anything to do what is going on the on the house of the floor a lot to do with slowdown in china. concerns of apple, or semiconductor stocks or apple

suppliers or ford, that it is big. >> yeah, two things, one days say worrying things about china. or if you like, take positive view, this is exactly what some in the trump administration are trying to do. trying to force china, in you like, to play by the rules, make it tough for them. make them realize the penalties. i do think what the apple story tells us, is china is getting hurt. it is being hurt by these policies. i think it probably will come to the table. i think xi xinping will come to the table, get a deal. tells you that side of things are working at least from the point of view of the trump administration. i think apple, to some extent it is blaming china for its problems. that's right. neil: saying has to do with the weather. >> exactly, something, they are clearly, apple is losing its dynamism i think. i think innovation, people are replacing their phones more slowly now. partly because they're more

expensive. how much more, you know, how many more bells and whistles has the new iphone got compared to the iphone 6, or 7, or 8? some but it is not that today mat i can step change when the first iphone came along or made major changes. neil: i see much more innovation coming out of their competitors. that is not to hurt apple by any means but whether others are hungry, doing more innovations with the camera and other stuff but they got caught flat-footed. >> that's right. they have been resting to some extent on their laurels. incredible machine, the iphone. generating profits for them still even with this down, with this down-scaling of expectations. neil: chinese consumers are saying we're so angry as americans, per sonscation of america we'll not buy the product? >> tim cook denies that i don't think there is a official campaign against apple. the chinese are pretty

patriotic. we've seen that in the past. they had a major political dispute with japan, smashing toyotas that, boycotting toyotas that. couple years ago when china objected to south korea deploying american missiles they had a huge standoff with south korea. once again boycotting south korean cars. boycotting other south korean electronics. samsung had a hard time ad that point. when china is involved in major dispute, people rally around, you know what? we'll stand by our government. we'll not by buy the products. chinese phone manufactures like huawei coming up. that is probably kind of a patriotic dimension. neil: have a great show. >> thank you very much indeed. neil: gerry baker, "wall street journal" at large host.

definitely low rate, but it beats losing your shirt. that seems to be winning out. to charles payne. charles you were just on for 17 hours. what the heck? charles: took a quick water break. started to crunch more ism numbers. neil: all right, buddy. >> good afternoon, i'm charles payne. this is "making money." which have a lot coming up. a major selloff after a bunch of of things including economic data adds to fears the u.s. economy is slowing but a big question are the machines overreacting selling big time on negative headlines? also of course weighing on the markets. apple shares of tech giant plunging after they cut their sales forecast. will this wake up apple and tim cook to become more innovative. new congress starting today