the dow up 645 points. thank you to fed chair jay powell in part. a strong jobs report gave a great start to the trading day. guess what. coming up to noon. who comes up at noon? liz: who? ashley: one and only neil cavuto. neil: thank you my friend. we had 29 down components yesterday. now verizon only one down, others pretty much up. this is from the much better than expected job news. jay powell sounding friendly. edward lawrence with ongoing talk to stop a government shut down dragging much longer. good luck with that. hey, ed. reporter: lawmakers are here. a stunning number out of the jobs report. 312,000 jobs created in december, blowing away estimates of 177,000. the largest increase in health care.

50,000 jobs created in health care. that is record pace, as far as we kept records a record number increase. put us on pace for creating 254,000 jobs over the past three months. that totals 2.6 million jobs added for entire 2018 calendar year. partly because of tax cuts. white house quickly taking credit for this. some economic advisors believe the fed is moving too fast with the rate hikes. still they say the market needs to take a breath. >> they are realizing their mandate. their mandate is full or strong employment, with low, stable, domestic prices. that is precisely what we're seeing. that is just what we want, just what we want and they're carrying their freight with improved productivity. it doesn't get better than that i would urge people to reconsider their pessimism.

reporter: federal reserve chairman jerome powell backing off comments he made last month about further rate hikes. saying an hour ago that the fed is flexible going forward. >> there is no preset path for policy. particularly with the muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves. but we're always prepared to shift the stance of policy, and shift it significantly. reporter: the other big news white house is following, breakthrough scheduling trade talks with china. monday and tuesday, representatives from the u.s. trade representatives office. commerce, agriculture, state, senior white house representatives will go to beijing, meet with the chinese delegation. we're told from the spokesperson from chinese minister of commerce if the talks go well, then the chinese delegation will come here before the end of january. neil. neil: thank you very much,

buddy. ed lawrence at the white house. maybe it was just me, i noticed back and forth with jerome powell fed chairman, he was reading carefully from scripted notes. in other words he wanted to get the language exactly as he intended. a more dovish language, a more friendly language. but the wording would be careful, careful parsed by markets. he knew that i don't think it was an accident he kept referring back to his notes making sure he would say just the kind of things just the kind of response he has. to forbes publisher rich karlgaard. maybe i'm only one that noticed that or made a big deal of it, but seemed how careful powell was to make sure he got it exactly right? >> i think you're absolutely right about that i think he make rookie mistakes speaking off-the-cuff. i have to think it was emotional response to trump tweets. powell wanted to show he has independence. we got into a little bit of you

know ego match. there i think he did the right thing and glad you noticed. it is showing that he is growing. neil: shows that he is growing he is feeling his oats a little bit, asked if he resigned if the president wanted to do that, the president hinted he might do that, he said i would not resign if the president asked me to. a lot of people question whether the president can even do that. one thing not to reappoint the guy. another to fire him midterm. but what do you think of that and his answer? >> look, he is trying to show independence. he is between a rock and a hard place. federal reserve chairman role does not appear in the u.s. constitution. trump has the ability-one way or another to do that anyway, i'm glad the tiff between trump and powell seems to be over for the moment. i think it will be over for the year. i'm actually pretty confident now. neil: when you say the tiff is

over, only way to keep it over, fed stop racing rates. consensus would be two more rate hikes. given volatility in the markets, clearly the federal reserve responding to that volatility even though powell saying he doesn't pay attention to the markets, what did you make of the new sort of con enis sus developing that we might not see hikes this year? >> we, i think we may see one or two, but i don't think we'll see more than that. if we keep producing jobs numbers as we did in december. just negative expectations, economy is going into recession, in fact growing at 2.5% or higher, maybe we'll we'll see one or see another. it is not a bad thing if they're wisely telegraphed. the fed doesn't look like they're lurching down the road.

it is nice to have that in the bank should recession comes and you need to lower from somewhere. neil: 2 1/2 points isn't a lot of wiggle room. lending rate is at that level appreciably up from 0% but you don't have a whole lot of arrows in the quiver, considering the normal range for that rate historically is in the vicinity of 5%. what do you make of that, and how little room there is is make mistakes? >> well, that's true. if we had, if we had collapse of credit bubble in 2008, something that catastrophic, i don't see it out there. by definition they are black swans. neil: right. >> you don't see them, then they have got, then they have got less maneuvering room. when i look at the strength of the economy, you know, because i've been on your show quite a bit, that i have, i'm a conservative with mixed feelings about donald trump but i think you have to give him crate credit for the regulatory roll

back and tax cuts and as incomplete or perfect as they were. this was sugar high that propelled higher rate in 2018. how are they a sugar high? they are gift keeps on giving and they have lot of money to invest an they're not looking over their shoulders for regulators knocking on their door. by the ways democratic congress will not be unable to undo those measures. neil: the lower tax rates are gift that keeps giving. you can quibble with them, but they're paying huge dividends. they will continue, less money obviously they have to fork over to uncle sam. so we can argue pros and cons of that. no denying on the regulatory front, what the president has done on tax front, what continues to happen in the economy, those are sugar highs. that is something i know. >> i think stock market will soon reflect that.

we are at or near a bottom. one thing to look at the colly wobbles the past month, look at what happened in fall of 1987, we had one day 22% drop. then the market kind of rotated. i think the market, consumer tech leaders like apple, facebook, they're being rotated out of and enterprise tech leaders like microsoft and amazon, considering amazon web services is about 80% of the profit of amazon, now they are the two, the two most valuable companies in the world. neil: very well-put as us is by you, rich. thank you very, very much. good seeing you. happy new year. >> happy new year, neil. neil: anytime. one thing that could be very positive for the markets, beyond just what we're seeing today if the united states and china score trade deal, sort of any trade deal here. what is monkeying up that picture is a slowdown going on in china, yesterday people were worried were permeating to our

shores. we got weak data and apple complaining about it, ford complaining about it. kevin has zit, president's chief economic advisor says you know, what a lot of companies whose earnings will be impacting by this. now we have the trade talks. they could get serious come next mon and tuesday. point bridge capital founder hal lambert doesn't see a deal though anytime soon. so what are we looking at, hal, in your eyes? >> i think next week all we'll see is positive press release. there may be some negative coming out next monday or tuesday, but this will go to march 2nd. at the end of the day, it comes down to president trump decides to two with steve mnuchin or bob lighthizer. that is where we're headed. neil: bob lighthizer trade visor wants to nail the chinese to the wall on this. steve mnuchin is a little more pragmatic. if he sides with one or the other and you still get a deal, does it matter? or it would obviously mean very

different deals, right? >> well, that is what i would say. i say, if he goes with lighthizer there will not be a deal. what we're asking china to do, what we're asking them to do, change their entire economic model, let's be clear here. it is is a communist regime and state-run. you can't just do this and take lan and subsidize all these industries as you want. we're asking them to take power from the top down. that will not happen by march 2nd, let's be clear. it is just not going to. ultimately this will come down to hold the line, can't operate in the markets the way you're operating in state move run company. ultimately they don't believe in private property if you're communist regime. so things are owned by the state. that is the way they view it. if you have intellectual property it is owned by the state. and if they're going to change from that model, it will not happen by march 2nd. it means it will be steve mnuchin's deal, something along

the lines of adjustments on tariffs, things like that, which i don't think long term will solve the problem. we could say let's take tariffs to zero on automobiles let's say for instance in china. great, they take them to zero. they can put word out to china don't buy american automobiles. neil: you read my mind. so far ahead of this. hats off to you. i have never trusted data out of china. i don't know i'm cynical or jaded. when they say we grew 18% this quarter. reminded me of jon lovitz skit, that's the ticket. we're growing triple average rate of any superpower in the world. they made similar promises to george bush, sr., his son george bush, bill clinton and barack obama and they cheated each and every time. so leaving aside the fact you can't truth them, the next issue becomes, whether they really want toso if it's a face-savingr

over our substantial differences kind of a deal, that will not move the meter, right? >> it is not going to move the needle. it may cause the stock market to rally. because markets, wall street will love to have status question, hey we'll not have any props with china. we'll kick the can down the road. neil: wall street love as problem out of the way even if it's a silly way to get it out of the way but that could be short live, right in. >> right. i mean look, we have to decide whether we want to be a country or colony, right? if they will buy soybeans and natural gas from us? come on that is 1700s. they have to get moo the modern era quite frankly. i don't see them doing that by march 2nd. neil: march 2nd is the drop ted deadline where the tariffs all kick in if nothing else is done, right? >> that's the drop dead deadline. that is the next round of tariffs are supposed to kick in. we can push that out if they feel like talks are going well. but at the end of the day like

you just said. there is a whole trust factor. larry kudlow said we have to be able to verify they're doing these things. neil: good luck with that. >> how do you do that? neil: hal, you're one of the few who said it. it does explain the president's tough position. a lot of people quibble with that i think it is warranted here. let me ask you one quick thing, i mentioned it on the show. wouldn't it be a quick, i keep repeating it on my shows. we score a trade deal with the chinese and they're too weak or their economy is softening up to the point, even recession they can't deliver the goods, whatever their promises? wouldn't that be something? >> i, exactly. you know, that would be ironic, right? we score this big trade deal. ultimately china can't even buy any of our goods anyway. so it is, look, long term, this has got to go the way that i think lighthizer is pushing, the way president trump is pushing. at the end. day they have to join the rest of the world. this isn't just the u.s. everyone should realize. the rest of the world is on the u.s. side on this deal. everybody knows what is going on

in china. look, they sell final products in the u.s. that cost less than input costs of a particular product. that doesn't even make sense, that a global commodity they're selling a finished product less than the cost of a global economy. clearly it is being subsidized. neil: even larry kudlow is convinced some apple technology has been picked off by the chinese. he is part of the team negotiating. >> sure. i think the chinese, i think they are probably hurting apple. i think apple is exposed there. they can put the word out, i think they have put the word out, don't buy apple products f you're a consumer in china you will listen to what your country and communist party is telling to you do. neil: you're absolutely right. it is tony soprano moment we don't think it's a good idea for you to buy anything apple. you can do what you want but don't think it is a good idea to buy apple. hal, have a happy new year. >> hal laid out valid points on chinese trade deal.

the president is right to go after them. the issue comes whether they respond in kind and deliver something that will deliver the goods, more of our goods over there. the way things stand, we're nowhere close. we have separate issue nowhere close on a shutdown that has now entered its 14th day, after this. ♪ shield℠ annuities from brighthouse financial allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

neil: my buddy in the studio we were noticing mirror opposite yesterday is happening today. 29 stocksdown, that would end up being 660 point selloff. we have only one issue. verizon up on the day. now all issues. dow stocks are up. making more than 40 points off in addition to the selloff we had yesterday. meanwhile the president meeting with top lawmakers from both parties. speaker pelosi we're told is offering a number of solutions to end this impasse, whatever you want to call it. they're the same old solutions we're told. from mitch mcconnell's office we heard dead on arrival with us, the president would not sign it anyway, why should i put it up for a vote in the senate? day 14 of the partial government shutdown. "daily caller," chris bedford. good to have you. happy new year.

>> happy new year. neil: what do you make of this, how long it goes on? >> i heard disconcerting things, from senate staffers, people didn't expect to it end until the state of the union or after that. depending president trump wants to use this, democrats want to use this to make the national show of the state of the union, make it a part of that, which is disconcerting. that is very long time to have the government shut down. neil: it is only partial government shut down, but partial government shut downs more they drag on, more you notice. more the press will pay attention. we're after the holidays now. people are, already feeling some of the annoyances around it, leaving aside parks and all that are closed but some of the inconveniences like getting a passport, all of that. >> or a marriage license in d.c. neil: absolutely. so that is the kind of stuff people do kind of get annoyed about. the annoyances build. who will take the brunt of this you think? >> most like -- right now people

according to polls are blaming republicans but i'm not sure those polls matter that much. you can write a poll if favor of school prayer, or in god we trust, that doesn't mean people vote it on in especially two years. neither side has much to draw them to the table, when they're only worried about election in two years. democrats got elected to resist, #resist, they have to resist right now. president trump got elected to build a wall. president trump has to build a wall. where will the two find some -- compromise? neil: a lot has to do with the much better than expected employment news but the fact that jerome powell is saying that the federal reserve is going to be patient when it comes to interest rate hikes in the future, which is exactly what the president has been demanding. what do you make of that? >> my friends who are involved with this. they were really worried about

interest rates going up. obviously the president was too. seemed like happened too soon, like the fed got antsy or little ahead of its skis and they will slow it down. that will be good news for the markets and for the president. but the president as you said in the show, tack himself to closely to the stock market ups and downs that is a dangerous thing. the president is unfortunately not in charge of whether the stock market foes up or down. he can take the credit or get the blame. neil: ronald reagan said famously stocks go up, stocks go down after the '87 crash. he said after two terms stocks were higher. let history record it that way. >> that is good way to score it. neil: thank you very much. chris bedford. >> thank you. neil: the dow is up 722 points. all 11 s&p sectors are urge ising ahead. financials leading the way. former federal reserve economist

vincent reinhardt is with us. a lot of this is talking about dovish comments and hinting i will be very careful going forward about hiking rates but what did you get out of what he said? is the market petting ahead of itself here, or how do you describe it? >> so it is interesting jerome powell said a lot of things he always said. the fed will be patient. it will make decisions meeting by meeting, it will be data dependent but this time he also gave examples, when the fed paused in 2016. neil: right. >> because financial conditions tight inned. he basically telling you we did it before, we can do it again. don't be surprised if the fed pauses from the succession of quarterly point rate hikes they did in 2018. neil: you know, vincent, i noticed weirdest thing, when i listen to any federal reserve chief in your days when you would speak to people. i would read into between the lines their body language, maybe

overly so to my detriment but i did notice that powell was constantly referring to notes and kept as if he wanted to get the wording exactly right and not leave any doubt and not say anything off-the-cuff that would be misconstrued. what did you make of that? >> hey, this was supposed to be a panel conversation and led off with opening address. neil: right. >> he didn't want to make any mistakes. he did want to say, there was a precedent for pausing. done it before. in fact there are precedents from two people sitting to the left of me. don't be surprised if we don't do it again. so he was sending a message. even though he said many of the words he said previously, even though it wasn't that much different than a press conference statements, he was telling you something. when the federal reserve chairman tells you something you should listen. but you know, neil, if you step back, what is the most efficient design principle ever constructed?

it is a market economy. a water point up or quarter point down on the fed funds rate is not going to derail a very robust expansion of the employment report showed we had 312,000 jobs created last month. that is above trend. it shows the vigor to the expansion. we added 2.6 million workers in 2018. that's an economy that will be tough to derail. neil: yeah. also tough to ignore if you're in the federal reserve. i don't want to be half empty glass guy here i find markets reaction a little interesting, because if you were to accept face value they're interpreting this comments dovish or market friendly, he is less inclined, the federal reserve is less inclined to raise rates, even in the face as you point out, spectacular jobs report, confirms recovery robust as it ever was, couldn't you read into that they might be getting behind the eight ball here? >> the same people who are

worried about the momentum of the fed tightening in december and january, will be worrying about the fed being behind the curve in july and august. if they do pause. you know the plain fact is, if you pause it is hard to restart. and in some sense -- neil: are you worried that is what they're doing? sorry to jump on you my friend. are you worried that is what they're doing, if they pause now it will create problems later? >> it is harder to restart a process once you stop. it is physics a body in motion stays in motion, a body at rest stays in rest. the fed stays at rest. the headlines will not be the fed pause, it will be the fed stopping and it will be hard to restart. you shouldn't listen to what they say. look at what the macro economy is doing. and we've got a macroeconomy growing above trend, with pressure on resources and wage gains inching up.

that's, that's an economy in which the fed will have to tighten, at least a couple times in 2019. we should get over that. neil: if they don't, that's a problem? >> that will be a problem later in the year. neil: all right. vincent, always good chatting with you. thank you very, very much. >> thank you. neil: vincent reinhardt, chief economist over at mellon. by the way our chief stocks editor charlie brady gets underneath the averages and numbers. the thing i love about him the guy is wicked smart. talking about trade related stocks doing very well at prospect a trade situation might improve between ourselves and the chinese or the trade environment might improve. among them advanced micro devices up 10% today, nvidia up 7.25, about that. micron 5.8%. intel 5.31%. if these issues kind of ring a theme or bell, these were the same ones getting caught up in the apple downdraft yesterday.

among issues vulnerable if the chinese economy slows down. now just the opposite. charlie is amazing. i found that amazing. after this. ♪ memories. what we deliver by delivering.

>> we're listening sensitively to the message that markets are sending and we're going to be taking those downside risks into account as we make policy going forward. neil: all right. that was jerome powell, the federal reserve chairman, sounding as cautious to the point and market friendly as he could be. reading from posted notes making sure he was saying exactly what he intended to say, and that is the fed will continue to be obviously data dependent and it is in no rush to raise rates. that was a signal. pretty unequivocal, the markets unequivocal in their response. phil flynn on how this is all weighing on investors at the cme. phil? >> it really is. i don't want to make any

mistakes, neil, so i will read off of this here. but, that is amazing. that really tells you what this is all about today, for the marketplace. a lot of people think jerome powell created a lot of turmoil we've seen in the last few weeks. it wasn't raising interest rates, but it was his press conference that suggested they were on autopilot coming to buying debt and there was no wiggle room in their policy. he didn't really mean that. but the markets took him sorry rusely and created a lot of fear and panic. i notice how laid-back janet yellen was ben bernanke, we don't need notes. we can say what we want. we're cool. that seemed better today. the market definitely taking this as a positive. if you see the fed getting control of the market, realizing turmoil in the marketplace, they're ready to react to it, that will be a real positive for the market. its also his acknowledgement of the importance of the china

trade war, how that slowing economy is actually affecting other markets right now. just that acknowledgement realizes that the fed does get it. jerome powell knows what is going on in the marketplace. that is bringing that confidence back to the market. interestingly enough. this comes on the same time that we're going to have these trade talks with china next week which is going to be very, very important. if they can get a trade deal, the fed gets it, that will be very positive for stocks. we're seeing risk come off in the marketplace right now. gold of course, for the last couple days has been on fire, risk control. that is down big today. we're seeing bond yields rising in recent weeks. they're coming back down again. across the board you're starting to see this movement. in my favorite, the oil market, it is also on fire today. it is rallying as well because of a strong economy means strong oil demand. that means higher oil prices. so that is a good thing. neil: if gold isn't falling all

that much, think about it, less than half a percent, you would think even more on a day like this, right? >> this is the market underwater neil for the last year-and-a-half. it hasn't really reacted to concerns about the marketplace. we went above $1300 an ounce for the first time in many, many months. i think there is other reasons to be long gold here. if you're worried about uncertainty in the global economy, if you are concerned about all the ramifications with china and trade war, gold is still a better hedge against your portfolio here. i still think there is a case for gold to move higher, even if the economy continues to grow. people are looking for diversification. they're looking of course to take off risk and gold is a good way to offset some of that risk moving forward. neil: indeed it is. thank you very much, my friend. always got chadding. phil flynn in chicago.

apple up more than $4.40 a share, after having the worst day since 2013. is this beginning of something or a blip in something else? after this. alerts -- wouldn't you like one from the market

when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. >> i'm lauren simonetti on the floor of the new york stock exchange. we're seeing a broad-based rally. the dow jones up 718 points. it was up more than that moments ago at 729 points this market is juiced by several thing right now. the jobs data, comments by the fed chief, those u.s.-china trade talks happening next week. that is being reflected in the sector. everything is higher. technology is leading the way. i will get into that in just a bit. let's start with trade. materials up in a big way. take a look at stocks like boeing and caterpillar and 3m. in fact if you look at boeing, 3m, apple that is making up 25%

of of the dow jones gains today. if you're talking trade, 50 days or so left when the march 1st deadline when the trade truce expires. that trade issue also affecting technology. this brings us to that sector. apple saw the worst day yesterday in six year. today it is up nicely. the stock is up almost 4%. it is gaining back some of that market cap. first company to hit a trillion dollars. it is behind microsoft, amazon, behind google. nonetheless great day for apple and big tech names we like to watch. neil? neil: you know what is interesting? over the last month or so, lauren, you think about it you reported early in the morning as well. >> yeah. neil: this idea we'll have these huge swings, hundreds of points, 1000 points or more and getting routine. how are traders adjusting to that? >> status quo. getting used to it. volatile will be the theme at the end of 2018.

maybe react to it a little bit more on the downside but it happens on the upside as well. we've seen it all week. just a few trading days into the new year. volatility is certainly here. a lot of the moves that you -- everyone was talking about a recession. the markets were trying to tell us recession was coming. maybe trying to create a recession. a few traders that i spoke with a little while ago, look at jobs data today. there is no recession. taking a nice day as we're seeing today, for what it is. not selling off with good news. sometimes the street interprets good news as bad news. they're not doing that at the moment, lauren simonetti. to lauren's point apple shares are rebounding. it is slipping to the fifth biggest phone seller in china. with concerns about slowdown there and took a lot of shares wit yesterday. to market watch tech editor, jeremy owens.

where do you think apple stands now? >> neil, making a lot of money. $37 billion of revenue in the fourth quarter and people are freaking out about it. the mobile boom ended a few years ago, apple elongates mostly by raising prices. it managed to increase revenue despite units staying the same. pretty much same amount of iphones. it staved off end of mobile boom they're going through right now. they have to admit the smartphone market changed. they're finally showing that. everybody else showed it a couple years ago. apple showing it now. neil: jeremy, i wonder this is analogous to the early days of deck top pcs. you had 286, 386, 486, pentium. people were saying enough already. what i got is fine. i don't need every 12 or 18

months follow moore's law, bet the next latest, greatest thing. >> for sure. we have not seen smartphone sales increase since 2015, 2016. 2016 was last year we saw major increase in smartphone sales. people say i don't need a new iphone every year or maybe every two years. as that stretches out, harder to make that money. we've already seen that this is not anything new. this we've seen that happening last two years. it is finally affecting apple and the pocketbook. neil: i wonder whether after pell is innovating enough. it makes great products. i have an apple phone and galaxy phone. i find the galaxy phone has more bells and whistles. this is subject tiff. the camera is better, innovated more than apple has, i'm wondering if apple, problem not so mentioned about apple, i think you have gotten to it, that it might have been sitting on its laurels and the

comeuppance is now? >> it is hard to reiterate a smartphone at this point something brand new that will make people excited. it is about the next device. apple put a lot of money into automotive technology and augmented reality. we haven't seen the fruits of that. don't expect that they will never come out with anything. you know just hope they, if you're an apple investor you hope they get there before anybody else and are able to put out that magical augustmented reality product or the next device that connects to a smartphone and makes a big difference. if you're an apple investor you're hoping they get there before anybody else. somebody else gets there first, they're able to do it better. what apple has done for years and years. neil: could always do something boring and buy content, right? if it expands what they're doing on line, buying a movie studio, buying a network, a little outside of the traditional box there, what do you make of that? >> sure they could. you are boosting revenue but you may hurt margins a little bit.

apple makes fat margins with the iphones. they make so much money on everyone sold. if they go. >> best with lesser margins they will hurt that. that bigger profit why they give so much money to ininvestors. whether apple is value stock. it managed to grow revenues and become a really rare value growth stock. now is it just going to be go back and be a value stock? neil: real quickly, larry kudlow had been mentioning earlier apple technology might have been picked off, his words, by china. now if that is is true, i wouldn't doubt it, that is long-term issue for apple well beyond this latest drop, right? >> sure in china you can get cheaper phones that do the same thing. in the u.s. you can as well. apple is status symbol. to have the phone with the apple on the back is a status symbol. china is showing itself willing

to buy the status symbols to pay the extra amount, now is it though? if you have chinese phones do everything apple does and is homegrown, you could find the national listic sense of, it's a chinese phone, so i feel better about it. that is where you will run into issues. neil: very well-put. jeremy, thank you very, very much. all dow 30 stocks to jeremy's point right now, technology included, apple included, in the green. we should pause and talk about china. it is no accident that chinese consumers have been eschewing a lot of american products. there is some truth to that. whether that is a carry over from the trade war back and forth or a government not so subtly reminding its citizens, might be a good idea to buy something that is not from the united states. it is resonating. the chinese are seeking out alternatives. what worries apple, by extension apple shareholders, they're doing so aggressively.

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neil: we should hear shortly an update how the shutdown will resolve itself. the president meeting with congressional leaders. might be a the meeting at

white house but looks like they're miles apart. you think this is having effect on corner of wall and broad. it is not. encouraged about a economy really strong jobs report and virtually every major sector going along for the ride and then jerome powell, the fed chairman, saying earlier today, he is still very much watching data but the data doesn't tell him to pounce and move rates up quickly. so that one -- one-two punch put stocks up 760. robin end with you let me begin with you. robin, underlying economy, which is the president's point is sound, markets can gyrate all they want but the underlying economy is sound? >> yes the economy is sound. my only concern right now looking at everything overall is the reverse mortgage market

because it closed 18% down at end of fiscal year 2018 with fha insured loans. that makes up of 6% of all fha-insured loans so that is concerning. overall that is great news. i never bet against the usa this is great chairman powell didn't raise the benchmark rate and the jobs report is looking fantastic. so that is great for all americans, neil. neil: eric beach, as a republican strategist here, what are your thoughts on a president who has been telling the federal reserve to say and do just what it said and did today? because it is not warranted, hikes are not warranted? >> look i think the fundamentals of the economy is strong. i think powell did the right thing. that is what the data is showing, that decision last week or two weeks ago to raise interest rates may have been political or in the face of the administration. that is not healthy either way. the president is not the first president to talk about the fed and raising rates, especially in

the last 30 years. so i think the fundamentals of this economy are very strong and there has been temporary risk factors. neil: first to say so publicly. >> well, he has, but again, did powell make the decision a few weeks ago to really push back against this administration? that itself will be political. that is a debate some conservatives have, many economists have. the size of market, what powell did today, what they have been signaling to the american people over the course of the last six months. neil: yeah. robin. there seems to be interesting message, maybe internal party fight from newly sworn-in house democrats that have control of house. many are kite militant in their views, i don't mean militant as pejorative that the party should take a hard left, raise taxes on rich, et cetera. where do you stand with regard to that?

>> that is just not good for anybody, neil. i understand, these are freshmen. they're just getting, getting their sea legs right now. that would not be good politics t would not be good for the economy at all. they can bounce that, float that as much as they want. it will never pass the senate. i'm not all that concerned about it. looking at the overall economy, my only real concern right now is the health of the reverse mortgage market. because it is showing signs of a possible crisis. that is one of the things helped pull us out of recession of 2018. that is one thing i really think investors need to be looking at, neil. neil: having said that, think about it, eric if the federal reserve stops raising rates, leave rates roughly 2 1/2% that is half the normal range for that rate.

you heard the argument before fewer arrows in the fed's quiver to reduce the meltdown like we had a decade ago. does that worry you? >> it does but the data is showing different. i think that is what powell did today. i will contradict robin here, if the democrats overreach, like republicans repeal obamacare over 60 times and they brought it to the senate, never got done, the rhetoric and tone will be at risk, not just to the market but their overreach will be a risk to them politically. i don't think they have a choice in the democratic caucus what to do with the freshmen senators or liberal side of the caucus. going back to the data, i think what powell did today, demonstrates the last six months they have been seeing at the fed. so i think they have a better plan in place. and i don't see recession the way they had it decade ago. neil: real quickly, robin, jerome powell mentioned if the president asked him to resign he wouldn't. what did you make of that. >> oh, that is shocking.

but good for him, i'm glad to see him taking a hard-line approach. he has been doing a fantastic job. he is of very sound mind. basically i support that neil. neil: how but, eric? >> depends, if he is making decisions because they're political decisions then the president has every right to say, look, you know, i can say what i want as president. other presidents have done so. so, as long as powell is acting independent not making decisions one way or another in the political spectrum, he should stay on. to reflect in the course of public opinion the president has every right to ask him to step down. neil: gentlemen, thank you both. happy new year. >> happy new year. neil: we have at session highs. the dow up better than 777 points. we made back yesterday's losses and then some but another 170 points on top of that. all dow components are up. be careful reading into any really strong good day or bad

day like yesterday. a guy camed -- named carl icahn is not caught in the vagueries of the moment. i will ask him. because we do tv interviews, he is doing a big one with us on monday. carl icahn, friend of the president. one of the most brilliant minds in the market. his read what looks hot and what doesn't. what was promising and what doesn't. and whether china is a threat or not. ♪

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2018 by so many measures was a good year for the united states economy, and most of the hard data that we see coming in remain quite solid and suggest ongoing momentum heading into 2019. neil: all right. jerome powell earlier today. he was joined by a couple of people who had that job before him there, of course, ben bernanke and janet yellen. they know the pressures of that job. of course, they didn't have to contend with a president who wanted public reviews about firing them. having said that, you might notice jerome powell constantly referring to those notes of his. perhaps i make too much of a big deal of that but he wanted to make sure he had the wording exactly right, that the fed was going to be still data-dependent but the signal clearly, whether that was exactly as he intended, was to pretty much say we're not going to pounce too soon,

responding to any of these developments, including a very strong employment report today, where we had better than 312,000 jobs enter the u.s. economy in every major sector from construction to restaurants and bars, manufacturing and retail, and at least 40,000 jobs. we got michael lee and dave nagy joining us. this was a very strong report so the fed chair's comments were all the more revealing that he isn't necessarily going to pounce and raise rates. what did you think of that? >> i think it's good news. i think it's really good news. i think where i sit out here in colorado on main street, i think the average entrepreneur was kind of thinking oh, boy, are we in the bubble zone, are we in the bubble zone. the last couple of months for i think most of america, in the business community, has been hey, this is good, this is a soft landing, this is a let the air out of the bubble, this is let's not have another 2008. so to get continued good jobs news in the face of market

weakness to me has been a really confirming, nice beginning of the year signal. neil: when you look at it, michael, i had a guest on earlier who said as much as the markets like this today, not trying to be a crepe hanger, just quasi-quoting him, it might regret it down the road. there's a hint here the fed is looking like it's ceding to the president's demands. what do you think? >> you know, neil, look, i think all presidents have back channels into the federal reserve directors. however, we just know exactly where trump stands. it would be nice if these things were a little bit more pleasantly discussed but that's just not the situation that we're in. that being said, i think the fed has to raise. maybe two instead of four this year, but we need to get that front end up to 4%, otherwise we're looking at a japan-like scenario where we have no growth and no inflation, and national debt that's 230% of our gdp.

so look, what i think needs to happen this year is people need to sit back and just look at the data because the data will be a lot better than most people think, you know. this jobs number, for example. i like to describe what powell did today as verbal karate. he just does what he planned to do anyway. he just says it nicer. neil: my father used to do that but i still couldn't borrow the car. dave, i'm looking at this, and the markets are clearly not factoring in i think even the two rate hikes expected. could i be missing something? what would happen if rates did in fact go up, whether it's in march or whatever? what do you see? >> a softish landing. ben bernanke said at that same panel today that business expansions don't die of old age, they get murdered. i think that, you know, keeping the gas on in some way is the

best way to potentially drive off the cliff. so to me, you know, look, the market is fully discounting, the news is out there that the current plan is continued rate increases, but you know, not in kind of a hell-bent way until for powell to say yeah, we're probably going to do it, we're just going to keep our eye on the data, it's like you know, captain obvious stuff. of course you are. neil: i hear you. michael, is it your thought that without saying so, we're up 800 points now on the dow, that the fed does pay attention to markets much more closely than it acknowledges? >> i know for a fact they do. they are watching markets every day. they have a whole team of people called market participants to figure out what's going on there. the fed is, you know, they are keeping an eye on the short term, but there are long term problems at stake and i say to a lot of people watching out there, what's more important, that the market goes straight up

like a percent or two every single month, or we have a couple ugly months and then return to our 3% to 4% gdp, 2% to 3% inflation for the next two years, and end up in a situation like japan. people have to be careful what they wish for by keeping rates too low. neil: gentlemen, thank you both very much. the dow up at session highs, better than 801 points. you saw as well that interest rates are backing up a little bit. that flight to quality we saw yesterday that was really going into the ten-year treasury note, unwound a little today. gold is down but that's what you would think. it was in and out of six-month highs. it's down about half a percent as we speak. jpmorgan chase chief economist anthony janis with us now. anthony, the federal reserve, stability is its desired goal, doesn't want inflation to get out of hand, has a very tight rope to walk. rarely does it succeed. it can either overdo it or underdo it.

what is your sense of where the fed stands now? >> well, monetary policy is always a blunt instrument. that's the reason why they err sometimes on the side of causing recession, unintentionally, of course. right now, the federal reserve i think is doing pretty good, because they are not raising rates at the normal pace that they usually raise rates. they are raising rates at a fraction of the pace they are -- neil: enough of a fraction to tick off the president. >> well, that's the political situation. but in terms of the economics, the federal reserve seems to be doing less rather than more, and today's employment report, not only was it a good one but it suggests the economy is still going. keep in mind, though, neil, when you look at employment, employment is a coincident indicator. when you look at some of the leading economic indicators which today, nobody wants to talk about, like the ism manufacturing index that actually got a lot softer, it does suggest things could get a little bit softer later on. that's one of the reasons i was very impressed with the federal reserve today saying that

they're really going to be more data-dependent. that's exactly what you want from a central bank. in fact, they see some of these leading economic indicators getting weaker because changes in policy impact the economy a year, year and a half later, they will adjust policy. that's exactly what you want. neil: i ask a lot of very smart folks, certainly include you in that, about the president and his relationship with jerome powell. it has been acrimonious to put it mildly. jerome powell said even if the president asked him to resign, he wouldn't. do you think it will ever come to that? >> i think at this juncture the economy is doing very well. there sirnis certainly a lot of discussion on both sides. i don't think they are anywhere near a situation like that. by the way, if they did get to that point, today we got that answer. powell said he simply wouldn't resign. that's off the table. neil: at the end, if you don't raise rates, it's because you are intimidated by the president. if you do, you are spiting the president. he can't win. >> i think he could win. today he made it very clear he's

only going to change rates, they are going to be patient, if the economy gets stronger. i think he basically hit the financial markets with a two by four to try to convince everyone out there that the federal reserve will only move if it's justified. we know that in 2019, i don't see any signals that we're likely going to a recession. there are some things out there that are lingering that will suggest there is risk of a recession in 2020, but for 2019, i think an expansion -- neil: we're due one at this point, right? >> well, again, recessions or expansions don't die of old age, as ben bernanke reminded us. history shows it, that economic expansions die of some sort of catalyst. so the catalysts that are sort of looming on the horizon is something that could probably hit us in 2020 if not in 2019. in fact, one of the things i was very impressed with, many people were looking for weakness in the cyclical sectors like manufacturing and construction,

and both of those sectors' unemployment came in pretty -- neil: i was shocked by that. construction, 38,000. manufacturing up 32,000. retail up 24,000. in the decades we have known each other and talked, i always feel that whatever downdraft comes in a market is because of a bubble that was building that most people didn't see coming until it was too late. you can talk about real estate, talk about some say today, what happened in the bond markets. are there bubbles that you watch, are there problems or people returning to ways that worry you, what? >> i really don't see a lot of bubbles in the equity market. the federal reserve puts out a weekly index on financial conditions and that actually has been getting tighter and tighter and tighter. so less likely of a bubble. neil: seven, eight-year car loans going on right now. not exactly no doc adjustable rate mortgages, but fewer doc adjustable rate. >> these are all things we're

watching. by the way, they are a much smaller share of the total pie than they were back in 2008 and 2009. if you really want a catalyst, i will give you one. if you look at corporate non-financial debt as a percentage of gdp, it is higher and by the way, that's one of the reasons why when you look at high yield debt spreads, they have blown out. neil: particularly among those who might be least prepared to pay back the money. >> well, you have seen energy prices coming down and of course, we know we have between 15% and 20% of the high yield market basically accounted for by energy so if energy prices are down, that certainly has an impact. to the extent that we see the economy improving a little bit, some of that will go away and in fact, we have seen a little bounce-back in energy prices. these are all things we're watching. there are certainly some things out there that tell us 2020 is a danger. neil: did you find it odd during the holiday period where treasury secretary mnuchin was trying to reassure the banks there was adequate capital to

protect them, just in case? that scared a lot of people at the time. i know his intentions were good, but did it show the administration is worried about this more than it lets on? >> that's the way the financial markets interpreted it, but i actually viewed it as a very transparent move on the part of the treasury secretary. he was basically telling people we're minding the store, we're watching everything, we're making sure we don't wait until it's too late. i actually applaud the search for things that could be a little bit of a problem. but again, i know some people who interpret it if you're looking for a problem, you must think there's a problem. neil: you are optimistic right now? >> over the near term. i think some sort of mild, not global financial crisis but mild recession in 2020 is certainly a strong possibility. neil: all right. you just have to hurry up and start aging because i can't do this alone. anthony, we have talked for decades. jpmorgan chase chief economist. very good read of the economy

and the market. tough to do to get them both right. the president is meeting with lawmakers from both parties. you know what they do, they set up microphones outside the north portico. you go through that door, go down about 30, 40 feet and you're in the oval office. they will come out of there and chances are if they see a microphone they will run to it. when they do, we're there.

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neil: i'm trying to see if the president's commented on the market or tweeted about it. he certainly didn't yesterday, outside of blaming democrats taking control of the house for the market selloff we had. but you know, he has not as frequently mentioned the markets when they have been spiraling out of control. that's going to be attached to him one way or the other. when they're good, they're on him and when they're bad, they're on him. so far, they're pretty good today, more than making up the ground we lost yesterday. is that fair or right, whether we can attach it to the white house? swan street strategies partner erin mcbride and "wall street journal" bill mcgurn. the president is fond of saying

when it sells off, it's not on him, it's the federal reserve or the democrats taking over in the house. i would do the same thing if i were him. i guess i wouldn't be so fixated on it one way or the other because it can always come back to bite you. >> it can always come back to bite. absolutely right. neil: what do you do? >> look, i think it's a mistake, obviously. i think that if things do get soft toward the end of this year or early next year, democrats will attack him for it. he put that on himself. it would be political malpractice for democrats not to attack him for that at this point. and that's true of all economic indicators. if we do have a bit of a slowdown, he will suffer the consequences for that. neil: bill, when you worked with president bush, george w. bush, how much did he follow the markets in general? >> well, he followed the markets but i agree with erin, the market is not the economy. the stock market is not the economy. it's a very dangerous thing to hitch your star to that wagon,

because when there are downturns you will be blamed for it. i would rather the president focus on more fundamental things, jobs growth, that sort of stuff. but he's paying the price for it. neil: you mentioned the fundamentals. you and i can recall, i'm sure, sometimes the markets, especially if they tumble, can change the fundamentals very quickly. the free-fall in financial related issues that compounded their problems and magnified the meltdown and that changed the fundamentals. is it your source we can avoid that? what do you think? >> i think so. look, i was encouraged more by the backtracking we saw from the fed today. one of the things i think that the "journal" has talked about, we actually agreed with president trump that now is not the time to hike rates, you know, without getting into cause and effect you can cia see after the rates were hiked we had a lot of volatility in the market. we also agree with the general

overall goal of mr. powell that he's trying to wind us back from this great monetary experiment, so it's a delicate thing. when the president sort of suggests he should do a, b or c, it's kind of hard to do that and still look independent. i'm not sure the president made it easier, but i'm glad to see the move that we had today. neil: erin, i will defer to you and bill on this. you seem to know what is allowed and not allowed as far as firing a federal reserve chairman. the president hinted as much that he wanted to do so. mr. powell was asked about that and said if the president asked him to resign, he wouldn't. i'm going to maintain that same position here at fox if someone gets the idea. i'm just going to stay in this chair. i did wonder about that. what did you make of his answer? it was fairly direct. i'm not going. what did you think? >> well, i think we have seen a number of high-ranking officials

make the same move. that's the line. i think that's exactly, speaking of jeff sessions when he was attorney general, said he wasn't going to resign. others have said they have to be kicked out. neil: but that's an official that can be kicked out. >> absolutely. you are asking -- neil: this is the fed chairman. >> no, no, no. he's not going to take any bunk from trump is what he was saying. trying to do it nicely. that's all i took from that. neil: i like that. bunk from trump. bill, what do you make of that? >> i agree. he had to say that, right? the fed chairman, not just this fed chairman, all fed chairmen, pride themselves on their independence. there's no way they can say this. i kind of think this is unnecessary noise. i think a lot of presidents are not happy with the moves their fed chairmen make at the time. they're not always as public as

this. again, i'm glad the bottom line, i'm glad to see a little corrective. as i say, we generally agree with mr. powell's overall thrust. he's trying to wind us back from this extraordinary experiment and get us back to normal times, but now is probably not the time for the kind of hike that he wanted. >> can i go back to trump for just a second? neil: sure. >> as we were talking about trump and how he's attaching himself to the market, he's working so much as an analyst and not really being a leader on this. i think one thing that's going to come back to bite him is that with the economic growth that we're seeing, with these good indicators, he should be doing something with it. he should go to capitol hill, he should talk to mitch mcconnell and actually try to go for some kind of infrastructure bill. he's not actually doing anything positive with the growth that we're seeing. i think that's the reason he's going to face some more trouble later this year and early next year. neil: we'll see. the president just tweeted

something about you. erin mcpike is a loser. no, i'm kidding. i had you going, didn't i? thank you both very much. as for the decision if someone wants to fire you, no, i'm not going, but maybe you will keep all the cameras on, make it seem like i'm on the air. hell, no, i'm not going. i did like that about powell. he can fire me but i'm not going anywhere. more after this. had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

neil: all right. mitch mcconnell passed the microphone, left the white house, so the republican leader, not inclined to talk to the press after that pow-wow with the president. the president meeting with leaders of both parties, including the democrats, here in the situation room. they were to talk about the border wall, funding, security, partial government shutdown. so he's not commenting. maybe they will when they leave. they could have gone out other

doors, obviously. that's the amazing thing about the white house. they have several front doors, they have a back door, they have side doors. it is amazing how many doors the white house has. there's even a tunnel. but i don't want to go into that here because i'm sworn to secrecy. meantime, we have the ten-year treasury below 2.7%. so it's ticked up here. but not as much as you would think. we had the flight to quality certainly yesterday that saw that break down to 2.5%, but it's not going crazy. the same with gold. it gave up a little bit of its six-month gains yesterday but not much. it's down about half a percent. susan li, and mark hamner. susan, what's interesting, stocks are soaring, bonds aren't getting killed, gold isn't getting annihilated. you could argue here this is a stock-centric rally that has not hurt the others to the degree you would think. susan: risk-neutral as i will

call it. we have a big rally under way for stock equities and you know, what i found really surprising today, if you take a look at the fed funds futures, neil, they are still at 36% probability investors are pricing in a rate cut in 2019. so 50/50 if you want to hash that out to six months. i guess that's kind of keeping the treasury yields contained. neil: you know, a lot of people have looked at this and said these are just the way market days are going to be. you will have a huge fall like we did yesterday, a huge rally like we do today, a lot of thousand point swings like we did last week, and just get used to it. what do you think? >> i think you're right. i don't think there's much getting away from volatility and uncertainty until we get into another one of these periods where we had a lull a number of months back where everybody was saying where is the volatility. we go through these mood swings not unlike what the president goes through, where there are periods of calm, then periods of

storm, and a lot of it does seem to be very emotional. we know not only the u.s. economy but the global economy and markets are working through a number of uncertainties and big challenges right now. neil: you know, a lot of the technology stocks are coming back today. they are still down appreciably from their highs. apple is still off 36% from its highs, well into bear market territory. are you talking to anyone who is nibbling at some of these stocks that have gotten beaten down so far? are they convinced we're not out of the woods yet? susan: well, take a look at apple today. just in 24 hours, the mood has now changed. people rethinking the growth prospects, the known knowns, we already had like a china slowdown, also concerns about a trade war, those have been in the market for six months to a year, so people are rethinking right now these cheap levels, cheaper than they were two months ago. there is a bit of nibbling and i would say more optimism. neil: mark, as an economist from

jpmorgan chase was talking about, i don't see a slowdown in 2019. more likely one next year, in 2020. even though no matter how you slice it, we're due for one. i'm wondering, the longer we go without one, just does wall street get nervous about that? >> well, i think there's a lot to be nervous about right now. as the old saying goes, you know it as well as anybody, if not better, these expansions don't die of old age but they do die, and just like any good estate planning, we should be ready for that eventuality. today's jobs report was like a good shot of adrenaline and jerome powell came in and almost stole the show. neil: you're right about that. susan, one thing i do know is the market isn't worried about this shutdown. maybe because it's a partial shutdown, maybe because it's not affecting directly the things that would rattle the markets. but they're ignoring it thus far. to their detriment or they have other bigger worries? susan: bigger worries. we have been here before. it's a story that's been played

out already. i want to note the positivity today. take a look at the internal market dynamics which really tell a positive story. i look at the up volume versus the down volume. today, we are 15:1 in terms of going up versus going down. the small caps, i want to point this out quickly, russell 2000 up 9% since they hit their bottom of that bear market since christmas eve day basically when we had the worst christmas eve session ever. neil: you're right. that could be a ringing endorsement for small company stocks that would look like they were down for the count. they might still be, but it is important to point out that comeback in just a brief period of time. these are the market conditions to which you both, you know, alluded. we are following that, we are following the fact that all s&p sectors are up and up appreciably but it's one day. we are waiting to hear as well what happened at the white house at that meeting, whether they are making any progress bridging the gap between the wall or no wall, whether it's going to be

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to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! neil: all right. they're coming out of the white house. nancy pelosi, chuck schumer, the democratic leaders. >> -- open up government. we made that very clear to the president. services are being withheld from the american people. paychecks are being withheld from people who serve the needs of the american people and our border security will suffer if we do not resolve this issue. we are committed to keeping our borders safe. that has always been our principle, to honor the oath of office that we take to protect and defend our country and our constitution. we can do that best when government is open. we've made that clear to the president. mr. leader?

>> yeah, i basically, same thing as what the speaker said. the bottom line is very simple. we made a plea to the president once again. don't hold millions of americans, hundreds of thousands of workers, hostage. open up the government and let's continue the discussions. i pointed out to him, for instance, a call i got in my office this morning, a fire dispatcher from upstate new y k york, wife is pregnant, signed a mortgage, can't get the faa to approve it now -- fha to approve it, because the government is closed. this kind of situation is happening in millions of instances across the united states in one way or another. so we told the president we needed the government open. he resisted. in fact, he said he would keep the government closed for a very long period of time, months or even years. the discussion then, we

discussed a bunch of issues as the leader said that were somewhat contentious and we will continue discussing, of course, but it's very hard to see how progress will be made unless they open up the government. reporter: did you make actual progress on a dollar figure for what the president wants or what you all want from him? >> how do you define progress in a meeting when you have a better understanding of each other's position, when you eliminate some possibilities. if that's a judgment, we made some progress. neil: all right. it does not appear much progress

was made despite what nancy pelosi was saying there. we would have to check this, if the president did indeed tell them i'll keep the government closed for months or even years to settle this. that is to get that wall or wall funding. he's come off the figure for th that. he's come off the wording, whether it's a wall or something electronic or a combination therein or fancy fence, whatever. nevertheless, it does not look like much progress was made. you might wonder where mr. mcconnell is. he walked out of the white house and left. he said he wouldn't take up the house legislation on this because he was convinced the president wouldn't sign it so why should he waste the time in the senate when the republicans have a 52/48 margin and waste their time with something the president would reject regardless. charlie gasparino is here. this is not a market-moving event. could it be if it drags on for a long time? >> yeah. listen, if she had her way, she meaning nancy pelosi and chuck

schumer, they would want no trespassing signs. that's really what they're going with this whole thing. the president has a base to worry about. you do get the feeling, though, i think this is some of the underlying volatility in the market, that investors believe the lunatics control the insane asylum essentially on both sides. on one hand, you got to see the raft of stuff that came out of the democratic congress today, proposals. eliminating the electoral college. ocasio-cortez, why anybody gives her credence is beyond me. this is a freshman rep that barely knows where the capitol building is. she has no idea about economics. just go back and listen to her musings which are idiotic. just some of the other stuff. neil: you're not a fan. >> somebody called trump an mf'er. this is like really -- then on the trump side, all you have to do is listen to his musings on afghanistan yesterday. they were downright idiotic. listen, he thinks that the

soviet union collapsed not because of its economy, which everybody knows, but because they invaded afghanistan. then he said russia had it right. i mean, this is insane. so markets and investors are looking at this. neil: they are miles apart on this, aren't they? >> in the old days, when you had newt gingrich on one side that was considered a rabble-rouser and bill clinton on the other side, say what you want, that was normalcy. they even closed the government at that point. contrast that to -- neil: they did a lot of things together. >> but this is more insane than obama and a republican congress. both sides really out there and the markets are reflecting that. neil: i'm wondering whether that rabid part of the democratic wing that puts nancy pelosi's feet and chuck schumer's feet to the fire. don't give an inch. >> absolutely. impeach him and do whatever you can. neil: the president's base, equally adamant about not budging on the wall. >> what's fascinating about the

bases is how out of touch, i mean, if you listen to them, they make no sense on half the things they talk about. the other thing i will say is this. i will tell you, this is where i, you know, these market-moving events, you listen to commentators, we cover it, everybody covers it like baseball, you have to, right, but for the average investor just kind of zoning out a little bit because there are so many known unknowns here. we don't know if we're going to get a trade deal. we don't know if interest rates are going to go markedly higher. we actually don't know if the global economy's going to slow enough to screw us over and impact corporate earnings. stocks trade off two things, corporate earnings and largely interest rates. whatever affects either of them. we don't know where they're going. it's nice we're up 700 points and i wrote a whole column about how democrats were popping champagne bottles christmas eve and how it was stupid to do that, because you just don't know where this is going. you know, it is really, we are in uncharted territory with fiscal and monetary policy right

now. so it's funny watching cnbc and us go through this. weave to cover it. neil: i always like to remind people, i keep a map of the market. from when i first started. the market goes up -- >> generally. a lot of this. neil: the closer you get to it, the more jagged through oil crises. >> that doesn't mean don't keep your money in the market. neil: you need the longer term perspective. don't get too caught up in it. >> just so you know, we try to like pull apart, pick apart what's going on but we don't know where interest rates are going. we don't know -- neil: who knows exactly? >> nostradamus? neil: i will put it on a podcast. what is a podcast? >> everyone has one. it's a millenial thing. i was on one which was informative. neil: i'm sure.

he's the best. there's a reason why he's an institution. we want to put him in one. charlie gasparino. i love him. we are just hearing, by the way, the president has called the press to the rose garden. so he's going to talk to them. that's a development that's happening right now at this second with the dow up 725 points. so we are down 100 points just since charlie gasparino was talking. that's why we're focused on tick by tick movements. you're welcome, america. more after this. shield℠ annuities from brighthouse financial allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

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neil: all right. we're still waiting to hear from the president. he's called reporters to the rose garden, where he will no doubt be talking about the jobs report, which was off the charts robust, better than 312,000 in the latest period. all sectors of the economy including health care, construction, restaurants, bars, manufacturing, retail surging as a result, adding anywhere from 24,000 to 50,000 jobs each. we also learned a little bit about what mitch mcconnell, even though he did not talk to reporters leaving the white house, what he said was concluded there. not much, it would turn out. the republican leader saying at this point, there is no way there could be a reopening of the government before tuesday, since members need to be here to vote and a good many of them will not be here to vote. whether the president addresses that, all this other stuff, too soon to tell.

we will see. former chief of staff to paul ryan joins us now. dave, good to have you. who's getting the better of this back-and-forth? i know that puts it in simplistic terms but what do you think? >> nobody right now. however, it is important to look and take this apart piece by piece. speaker pelosi proposed and passed two bills yesterday, one of them which is less than the senate had passed and allows no wall. the other one had a poison pill in it so that republicans couldn't take it. so she is trying to act like she's looking to solve the problem, but doing everything she can to keep the liberals, the most liberal people in her conference, happy. and that's not going to solve the problem. you're going to have to have something in the middle here. the president has actually said he will come down off the $5 billion and the republicans in the senate have looked at different options as well, and the republicans in the house have looked at different options. so where you've got a situation here where it's not being solved immediately, but hopefully,

speaker pelosi will now decide that she can put together a coalition that can pass something in the house. this is what the democrats used to say for years when the republicans ran the house is just take a few of our votes, do it our way, and we will get you what you need. well, that's where the situation is. if nancy pelosi would put some money in for the wall, doesn't have to be five, obviously something below that would be possible to be signed by the president and passed by the senate. but she doesn't seem to want to compromise. so that's where we stand right now. neil: you know, if they are having all this over $5 billion which the republicans are not going to get, and this wall, whatever you want to call it, is going to be closer to $25 billion when all is said and done, is this ever going to happen? >> i think you're going to have to have some changes in security on our southern border. that's going to include in some places a fence, a wall, something, and it's going to include more high tech things like drones and it's also going

to include more people on the border. but you're going to have to do something about the border because it is not secure as it is right now, and we need to change it. now, we also need to change our policies for immigration. that's going to take a lot longer. they can solve the border part of this but it's going to be slower and take a longer amount of time than the president might like or some others might like. neil: for those of you watching at home now, wondering what's going on, this is the rose garden outside the white house. of course, roses are out of season for the time being but the president is going to address reporters, we're told. it might be an update on how the ongoing talks are going to avoid a government shutdown that could last beyond the 14 days it has. at the very least it's going to extend until next tuesday if we're to believe mitch mcconnell because a lot of people are out of town so they would have to come back to vote on that. so until at least next tuesday. he would also likely crow about the jobs report, no matter how you slice it, whether you're republican or democrat, it was off the charts strong. 312,000 jobs added to the economy. what's more, prior months were

revised up. we are now averaging monthly jobs gains 'in excess of 250,00 so that is quite strong. that is what he is going to say, no matter the volatility in the markets, the underlying economy, the fundamentals are just fine. >> the fundamentals appear to be very strong and continuing to grow. we are getting more people back in labor participation which is great. the unemployment rate went up but that's actually a good thing because it means more people are coming back to the economy saying i want a job right now as opposed to the people who are just so despondent during the obama years they didn't even look for a job. there's some really good information out there. i'm fearful, however, that the 2%ers are fed are going to say we have to have a couple more increases in the fed funds rate. i'm hoping they will look at the economy and the fact inflation is not going up and draw the right conclusion, which is we can grow at more than 2% with

good policies. tax policy which is now set in stone and going to continue on, and also getting rid of some of the regulations which were hurting and restraining our economy. these are good things. the fed ought to look at how much, how excited some of the businesses are to try and improve themselves to add more people, to grow their businesses, provide more jobs and opportunity, and not simply up the federal funds rate because we have growth over 2%. that's a concern that i have. neil: we'll see on that. they are still holding their breath on that. i want to bring in dan gelbreath who follows the markets closely. the president made it clear he's not inclined even in the face of the strong jobs report to change the picture, what do you think? >> i think it was a good move by jerome powell to really take a wait-and-see.

right now, the economy based on the reports that we got today, we are in such a great position. i really think if it ain't broke don't fix it. why would we want to start messing around with such strong numbers and everything is going in the right direction. if he starts to mess around with those rates in terms of raising them, it will only lead to less impressive numbers going forward. i agree with the position that he took today. neil: what about the president's position, we have not been able to ascertain whether he really said this, but chuck schumer says the president said i will keep the government closed for months or even years if i have to on this whole impasse over the wall security. what do you think of that, and whether that could come back to bite him? >> i think that's a little unreasonable. i don't think the american people are going to accept a partial government shutdown in perpetuity. at some point in time government has to get back to work. i think the two sides quite frankly are being perhaps a

little unreasonable, maybe more on the democratic side, but still, we're going to wait and see what the president has to say about how the meetings went today, but i think that we could probably conclude they didn't go so great in terms of trying to come to a compromise. it's all politics, neil. they're not putting country above party and that's a problem. neil: now, traditionally, you always say it hurts the president when this goes on, but i don't know, the longer it drags on i think it will be a pox on both their houses but it does show how disconnected and dysfunctional washington has become. the president might seize on it as he did yesterday, meeting with border patrol agents and the like to say look, this is a life and death issue. some of them even saying we're not getting paid as this drags on but we think it's that important. does he need to do more things like that to get the pendulum to swing back in his favor on this issue? >> you know, what i think here is that the president's base is supporting him not 100%, 1,000%

on we need a wall and they don't want him to bend. i think you have the other side on the left taking the same position that they don't want them to give in. so i'm not sure either side gets hurt politically by holding their position and holding their ground so steadfastly. so that's where i think the problem is. i think if each side started to look that their support was crumbling based upon the hard positions that both sides are taking, maybe you would get some movement. so i think the government is going to be shut down for some time until there's some political reverberations that impact these people. neil: meanwhile, back to the market, do you believe yesterday we were down 660 points or today, when we're up 760 points? >> well, it's just amazing what's going on in the market, neil. i think everybody is sitting around scratching their head, trying to figure out exactly why the market is reacting the way it does. i mean, today, there's a basis

for the market's move with the report, that jobs report we got today, but really, when you look at the market swinging the way it does from one day to another, what's really changing of substance? it's not all that much. so it's really hard to figure out what's going to happen next. neil: now, kevin hassett, white house economic adviser from council of economic advisers hinted it's not just apple or not just ford, a lot of companies have china impact on their earnings. was he telegraphing whether we get a trade deal or not, the reality is the china slowdown is a problem and it is going to reverberate? >> i think we have to look at this and say that the world economy certainly is going to affect our economy. i really believe, i have been saying from the beginning and you and i have talked about this on a number of occasions, that we are going to get a deal with china and it's not because the president needs to make a deal. it's more because china needs to make a deal.

their economy right now is not where it needs to be. there is pressure there. they need to come up with a deal. they need the trade more than we do. so i really expect when we get to that march deadline, give or take of what was set, that we are going to have some type of deal and that the world economies are going to pick up at that point in time. now, maybe those comments were a little bit of a hedge today, neil, but ultimately, i have no doubt in my mind that we are going to get a deal with china done in some form. neil: jerome powell said he wouldn't leave if the president asked him to. what did you think of that? >> i don't blame him. you know, he's got to have some thick skin with the comments and the tweets that the president's going to make. that's part of the job hazards when you're working for donald trump, whether it was in private industry and now in government. i don't think the president has changed his style. i think that he expects

performance in how he interprets someone doing a good job, and someone doing a good job means doing it his way and getting the results that he wants. i think jerome powell was right to say that even if the president asked him to step down, that he would not do it. the fed chair has to be independent from the politics that neil: there is a distinction with the fed chair. he might get appointed by the president but technically doesn't work for the president. >> no different than the supreme court. they have to drown out the noise. they have to do what is best doing their job. neil: dan, i said the same thing. if my bosses asked me to leave, no, i'm very comfortable. i don't want to leave. >> i think you should keep that position, neil. neil: my stage manager, said will keep tvs on, make me think i'm still on the air. he had nothing else he could say about that. >> i don't think so. you're much too popular to be forced out, neil. neil: please, yeah. >> not that you need the money,

you need something to do. >> my wife tells me the same thing. talk to the camera, see what happens. see if they talk back. dan, thank you very much. ed lawrence at the white house right now. ed, we're running a little bit behind schedule here but do we know what the president is going to be talking about here. reporter: obviously will talk about what happened with the meeting with the depth crass. this will be a statement we heard by the president. doesn't sound like he will not take a lot of questions, when he did yesterday came out with border patrol agents. you heard from nancy pelosi and chuck schumer. democrat side saying that the democrats can't negotiate over border security when the government is shut down. they pitched the president again in there and chuck schumer, the senator says, let's listen to the president of the he is walking out. neil: all right, buddy. >> we had a very productive meeting. i think we have come in a long

way. i will discuss that. i imagine you have all seen the incredible job growth, 312,000 jobs, which took everybody by surprise. estimates range from 160 to 180,000 and this really took people by surprise. this is a great number. has a lot to do with factories and companies that are moving back into the united states who have left. now they're coming back to us, instead of being in other countries. i can't tell what you that does to other countries but i'm the president of this country. so 312,000 jobs was a tremendous number. and obviously having a big impact on the stock market today. and, i do want people to remember that we've had tremendous success despite the fact i'm in the midst of negotiating incredible trade deals for our country that should have been negotiated many years ago. by both parties to be honest, many years ago.

we are doing very well in our negotiation with china. we pretty much concluded our negotiation with canada, with mexico. we have done the deal and signed a deal with south korea which a lot of people said was not going to happen. it would be impossible. it is a good deal. it was a horrible deal. it was a good deal. a lot has to do with the fact already companies are moving back into our country, that have left our country in some cases. in some cases they're moving back because they want to be here in many cases they're automobile companies that have left and coming back to the united states and it is nice to see. one of the things that is so beautiful to watch is 3.2% wage growth. that hasn't happened in so long. for our country. that is an incredible thing. that means people are actually getting more money,