anyway -- that's it for this week with's show thanks to my and to all of you for watching i'm paul we hope to see you right here next week. bartiromo's week begins right now. ♪ ♪ welcome to maria bartiromo's wall street, the program that analyzes the week that was and helps position you for the week ahead. i'm dagen mcdowell in for maria in a few moments form or white house white house anthony scaramucci is my guest and later in the show fox business all starnd to talk about everything that matters to your money. turning f to the first jobs rept of the new year, it was a blockbuster one, u.s. economy added 312,000 jobs if in the month of december. that unemployment rate did tick up slightly higher to 3.9%. but wage growth also a very

strong average hourly earnings climbed four tenths of a percent from november, the gain year over year was 3.2% as largest year over year gain strongest wage growth since 2008. here now to qaig in skyy bridge capital founder former white house communications director, author it have trump the the blue collar president anthony scare scaramucci. >> great to be here and happy early birthday to you. >> my friend fellow capricorn we make wavers here so many concerns aboutut the u.s. econoy that really started particularly in earlyy november. about what the federal reserve was doing to it weakening. what is this jobs report saying about the health of the u.s. economy. >> the health of the my is very strong underpinnings of the economy are strong very good fundamentals. and, obviously, unemployment rate kicking up because there's more labor precipitation so that wasnd one of the issues during obama yearsrs with low visitatin

so people are engages and they're making more money so this is a very, very positive thing one of the reasons why federal reserve had to move and likely will move again is that you've got to make sure tay we're taming inflation and you're ine a period of time whee federal government is borrowing this amount of money. one of the things federal reserve has to protect the united states from its dollar crisis so raising rates because of the strength of the economy also helps treasury go into capital markets in a much easier way god forbid you have a dollar crisis going on, and we're at the tail end of an economic cycle. >> having worked in the white house in washington, d.c. what does this administration what does trump administration do in termsc of fiscal policy to follw through with what we saw in the last year? that average job growth last year was 220,000 jobs per month that was evener than friar with this economic cycle that's job growth in 2015 how do you follow through on tax cuts because

people on the left will argue that that actually has helped pump up the national debt in the amount of money that we're borrowing so what do you do on that note and -- even in the federal reserve communications which the prump has been had ham forget jay powell right are or wrong. erchg yeah, listen, i understand why the president is hammering jay powell because -- i do too. habecause sensitive areas of the economy are are slowing as, president is saying to have a softer touch as it relates to the movement of interest rates. up against that, though, is what i'm saying you're going into capital market for a trillion dollars of debt so you have to make sure that people know that we're going to protect currency and not too much inflation so that -- harm any if you will is a little bit disrupting because of the way the president it tweeting at them way better off on the market if he wept to better off to brought him into oval office and they have a conversation in the den let's say or the study off the oval offices. so that's in the works potentially. >> i hope that what ises because i think it will clear the air and i also think, you know, that

the president has a -- good touch were people once he's in their presence and i think it will calm the president down. the same way the president was probably upset about rod rosenstein one of my classmates from law school in my section rod is a boy scout he flies on air force one with the president and comes back to his job so you know, all of that around him died down so i hope that happens. but secondarily what you're talking about is fiscal policy so they've done a very good job on three things and they need to do ay better job on one thing. what are three thingses number one they set a probusiness agenda and it is a probusiness person so he change whatted market psychology and bully pulpit that way. number two they're delayering administrative state taking down regulations that are actually unnecessary on the economy. very, very positive and third thing through the tax a policy, they're trying to figure out a way which really hasn't happened 100% yet but to repatriate iccapital bring it back into the united states, and have is that development takee place, and one

of the thing that's slowing that down the third, fourth thing to improve on is the communication around trade and the evan chul resolutiont of the trading situation with our largest partners which include europe and china. once we do that, you're going to tcalm down corporate america you're going to calm down industrials and cio chief investment offices to allocating capital back into the united states on three, five, ten year plan when is you have this uncertainty about trade you have this much uncertainty about -- uabout rhythm of the economy aa result of the trade you have a tend to slow down to alter the economy in the stock. >> in terms of the communication, i think that the american people regardless of the political part they belong to understand now the way the presidentt communicate and they have learned it to accept it via twitter.r. very -- firm rhetoric from the president. but they have not in terms of

the p market ins investors, allf the people around the president who love to go on tv, with who love to say things and almost as if they go on tv trying to impress the president and it cause -- lacks message does it not? and, i mean, wilbur ross and peter navarro even secretary mnuchin they're hurting -- >> i work with all of those guys. i like all of these guy an i think that they're in general doing a very good job and one found and a very shot of period of time but what i found there need to be more coordination between1 the white house and the department. so i think one of the things that bill shine is probably looking at and trying to do former head of fox news is like okay the white house qowb -- you know fox news headquarters and then branches wouldr be the affiliate or the stations that we're tied into or our offices say in los angeles or places around the country and so -- you have to have some uniformity in the messaging, and if they continue to improve on that

uniformity, that too will also be good for the stock market. >> so stop going on tv, and i don't mean the president because he was landed by some about what he was saying about jay powell andd federal reserve and months later agrees with the fed needs to cool it fed needs to cut, very good and good intuition in the economy no doubt about it. again people going on trying to juice the market because they know that market performance is important to the president trying to kind of -- curry favor with him that's how i read it and i just so -- give you the the facts on that. >> say that that doesn't work. and so -- i understand. why they're doing it.i i know a lot of people message the president through tv it and see they're loyal to the president there's a flip side to loyalty you have to be very careful because you don't want to slip into a fancy or overflattering because what i find i find this in my own corporation that word is way closer to self-preservation and

selfishness. it is not loyalty. loyalty requires honesty. loyalty requires -- constructive feed b.c. and krungtive criticism. dagen someone -- i've never liked people who jean flex -- unless they're in front of the pope -- >> we are on the same but for me i tell my staff it you're calling me tall in right i know i have a problem. if you're calling me short and wrong, now i know i have a relationship. >> but you are handsome. i protector that. you're welcome you're going to sit there to discuss your new fund we'll be right back.

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more? he has asked for...

what? well he did say please (all boys): thank you, thank you, thank you. welcome back we're continuing our conversation with anthony scaramucci you launched a new fund that invest in low income areas. known as a opportunities zones tell me about it. >> so just the top line of it is the new tax reform is bipartisan

initiative allowing people that have low bases situations that high value stocks they can sell their stock. they can put it into an opportunity zone, they get a tenure tax deferral at the end of the ten years they only pay 17% opposed to 20 but now money is in the opportunity zone dagen any money they make off the proceeds they get that taxed free provided that they keep it in the opportunity zone for ten years. so this is a huge tax benefit two people to unleash capital a lot of capital of the united states is trayed you know you bought amazon at a dollar and trading at 120. you don't want to sell it you don't want to realize that gain but you want diversity for your family so this is an opportunity to chip off some of that -- situation that can be your wine collection your home, can be a business. then you can move it into one of the nation opportunity zone these zones were base on 2010 census basically of 20% of the

population is below the poverty line, it is a designated opportunity design. it's about 12 to 13% of the country there's 8700 zones around parking the country and a fantastic opportunity for people so what we did was structure as a read to buy into all of the areas in the zone and that we can take the republic to provide liquidity to investors. whanch kind of investments and this is open to what would be called accredited investors right so they're not smaller investment. >> two dollar net worth or 200,000 in annual salary and our investment size or minimum is 100,000 dollars. so you know we're using our -- our retail platform and resale distribution mechanisms of just like we do with serious g to go out to the mass affluence say listen here's an opportunity for you. over the next ten years money that you want to lock up, you can s ship it off a of something that you bought 15 years ago that's got a very high value but

now you want some diversity and we can give you this product to get annual income, in a real estate investment for us but then you get a large tax depeferl for your family in a step up in base. >> give me an example or some example with the type of investments that you'll be making. >> yeah so there's a couple of things that we're looking at a fortou in south carolina, your neck of the woods to renovate the port. >> the south one big state anthony. just -- [laughter] anything north of the dickson lite makes me a yankee but we're lookingn: at a hotel in san francisco. i've been all over the country, my team has been all over the country there are tons of -- deals on our pipeline we have over 2 billion dollars of deals that will get high rates in returns to clients. and a require what we think a five to 35 million dollar investment to get the game started. now one of the requirements of the zone is that we have to buy

something and renovate indoor improve it so our goal in this is to, obviously, make money but secondarily dagen equally prnght a huge jobs creator and it is a huge infrastructure improvement in areas of the country that desperately need it so it is a social good going on alongside of the investment. how does all of the d this helpn this kind of tax benefit how does it help taxpayers what are taxpayers broadly speaking get out of it? >> they get a huge referral an example. the the american people like broadly speaking. broadly speaking let's say we can deploy a trillion dollars into the opportunities zones. and it creates another, you know, million and a half two million jobs. just think of all of the people that are getting add to the tax law as a result of these opportunities zones and all of the taxable income that comes from that and then all a of the commercial activity inside the zone. so reason why cory booker is for it same way president trump and steve mnuchin are for it this is a real opportunity to go into

areas of the country that need the help or you can supply capital and start that fertilizing experience and that multiplier effect in those area. great to see you happy birthday happy new year thank you anthony. anthony scaramucci don't go anywhere. more mariaha bartiromo's wall street coming up. into ♪ ♪ each day justin chooses to walk. at work... and after work. he does it all with dr. scholl's. only dr. scholl's has massaging gel insoles that provide all-day comfort. to keep him feeling more energized. dr. scholl's. born to move.

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apple sent stocks tumbling on thursday after the technology giant hit 1 trillion market cap ano few month ago and announce a slowdown in china with president trump trade dispute impacting that revenue forecast. cheers tom 10% on that day could this be a sign of things to come for more companieses? kevin head of the white house said f what should investors doo all stars from the fox business network, deirdre and connell.

connell, on this note kevin what's economic advisor said that there will be more pain coming out of china for american companies. at least he was being frank -- >> take away the speculation otherwise doing a segment about i wonder other companies will have a issue and those at the white house saying as much i guess we should assume they will.h apple report was interesting because part of it was i think apple centric and issues that company has been having and will continue to have. but the other part was kind of transparency into china we complain all of the time about how economic data we get out of that krpght may not be reliable. we have to assume that numbers that a physical is -- projecting would be more reliable than the numbers we get from chinese government so let's watch other companies. starbucks is a good example where apple is challenged with inbuy and huawei and starbucks is coffee is one of the china that challenged starbucks built a starbucks location in big cities in china like every ten

to 15 seconds. but -- how that bet goes over next couple of years should be interesting. so yeah othert companies have issues there are no tout. >> heard from fedex ceo before we heard from a l i think apple, obviously, is a lot more significant sometimes to the markets and more institutional investors hold it more retail investorsld hold it household ne most have an apple product so short shocked markets more. >> this revenue morning out of apple played into a lot of prawns that market has been trying to -- dealing with one technology stock overevaluation that was one of the things that kicked in isoff and fall and federal reserve may be being too aggressive. so the technology evaluation overevaluation even though apple looks relatively cheap at the time compared to -- >> apple still looks pretty good i think one of the things that is whatting at the same time is that apple is also going from having us all bee addicted to te hard qair to really building out this oh we are a services company. right we did here tim cook ceo

say really hammer hey we've made almost 11 billion dollars ins services alone but trick for them is that apple as we know gets about 30 to 50% of sort of the take from all of that app developers and there are companies that have developed now work around. netflix is one, spotify is another, so that's the beginning to challenge what apple is now saying is the future of its business model. >> it will, potentially it will never be as big and as profitable as the iphone. i mean that's one of the -- ways theta concern. there's company specific country specific challenges for apple i think what came out of the chinese report is that we don't all all the world operate same way with our phones so in other words if i had to change today and i've had an iphone from basically day one to android phone that would drive me crazy and upset and i would be able to accomplish absolutely nothing for t the entire week other than figure out how does everything work in china it is less that way because they operate for the most part --

inside of different apps like we chat for example has been one of the apps that is popular in china so whatever phone they have, say they have an apple phone today and p a phone made y a locale company like huawei oe of the other companies tomorrow. first thing they would do is figure out how to open that app and kind of operate inside -- tech consumers more agnostic phones are similar and maybe that's part of the debate we're having on trade all around is why is one with of the local chinese companies making a phone that essentially looks like iphone without the apple. >> like a luxury product right in china luxury product in u.s. and it is a problem for apple as well. m india another problem market for apple so but what had i was saying like the market is selling off for a number of reasons. and reasons has mounted the worries have mounted so i that overevaluation of tech stocks, with federal reserve but then also the the global economy slowing down. not just china. but around the globe. a lot of reasons for investors to be worried but then also --

the trade situation, and the trade negotiations with china. so does this give the united states and china to actually come together to get a deal because it is in our mutual interest? >> yeah i actually -- i actually do think this is a really strong tboarkting negotiating point into january 7, and 8th in beijing high level talks from both u.s. side and china side ping both sides are ing it and may bring them closer to make a compromise. >> jobs to report the friday jobs report might give the u.s., you know, at least in some people's minds more leverage to say we're a stronger economy than you china, so we're at a better position to negotiate coming in but i've gone back to this from the beginning still in the camp that chinese have a longer time frame and have ways of extending and we saw that at the a end of the week with what they it with their banking system and try to simulate the the economy. more than a hundred billion buys them more time to negotiate and to play this out over longer periods of time.

>> can i just get your reaction quickly to president trump comments about the stock market about -- you just we were going play this slot. [laughter] this glitch he said it was a glitch and -- >> a little glitch. just a little glitch. well --it again he is trying to find like -- let's play the slot. excuse me -- >> for economic stand point with the talk of the world, and we have a little glitch in the stock market last month but it is still up. i guess around 30% from the time i got elected, and it's going to go up once we settle trade issues. >> well that's the long view, connell. >> yeah.nn but whatever, it was more than a glitch. but the worst december since the glitch. 1931 that's a heck of a glitch but idea of the stock market recovering after the trade are issues are resolved to think is kind of a consensus view if anything and that's what kevin was talking about is to say until we get that's the part that deash that was off from comments until we get a trade

deal with china you have companies saying what apple said so that's why that was so important. >> i will never shame a woman or woman for being frank and honest. >> okay thank you connell. good to see you. >> really? >> thank you deirdre facial expressions say it all. don't go anywhere more of maria bartiromo's wall street next. sd operate don't go anywhere, more of maria bartiromo's wall street, next.

a big week coming up, maria bartiromo goes on the road hosting the show from the annual jpmorgan health cared conference in san francisco. maria will interview jpmorgan chief executive officer and chairman jamie diamond. you do not want to miss that. you can catch maria every sunday morning on the fox news channel for sunday morning futures. this week's special guest democratic california congressman rough kona catch that show 10 a.m. eastern fox news smart start at a 6 a.m. eastern for mornings with maria thank you for6: watching.

we'll see you next time. ♪ hello. and welcome to wall street journal at large. happy new year. and may i be the first to wish you a very successful and prosperous 2020. yes, you heard that right. 2018 ended in a dark cloud of gloom t over financial markets. and if the money and professional pundits believe you may cover your head but is it all that grim certainly or there are plenty of reasons to have sleeping pills on hand financial markets got hammered, and not in a good way. as we prepared for the christmas

holidays. last month was the the worst december for stocks since the great depression. and in 2018 as a whole equities had their worst year since the financial crisis of 2008. hangover o continues. and it is not just confined to stock markets. in a taste perhaps of the bipartisanship we can expect in the new washington, parts of the federal government started the year shutdown following a failure of democrats and president trump, withas to agrea budget that includes funding for a border wall with mexico. and we can surely expect new include majority in the house of representatives assembled on thursday to pursue aggressive investigative efforts against the president in his team. now whether you like that or not, it can only add to the uncertainties. and this week, the very first working day of 2019, in fact, we got a real are shocker from america's most successful company. when apple m said that it salesn final few months of last year will badly misa forecast.

largely thanks it a drop in demand in china. but -- as friday jobs numbers reminded us there's a big disconnect between financial market, the fortune of individual companies, even big ones, and u.s. economy as a whole. it is way too soon to rise off this year. markets poor predicters of what happens to economy as a whole as genius once said stock market has correctly predicted nine of the last five recessions. , ins fact, in the last 50 year, we've had 29 market corrections. periods when equities were down by more than 10% from their recentod highs, as we have now. but in that time, we've had only 7 reare sessions. u.s. economy had its best year in a decade in 2018 and despite the concerns in some quarters that all good things must come to an a end, there's nothing yet to suggest that the momentum won't continue into 2019. in fact, jobs report on friday underscored just how strong the labor market is.

it is so strong that men and women who for years have been discouraged from looking for work are coming back into the labor force in their hundreds ofs thousands. there are few signs now of the kind of stresses that usually derail an expension inflation, financial successes, a negative shot from overseas or at home. it will require deaf management by fed and policymakers in washington to keep the economy moving. and that's something perhaps we might lose some sleep over. but for now, there remains plenty to stay awake for in 2019. well to discuss all of these issues and to look ahead to what will be a very busy year, i'm joined by doug, doug was director of the congressional budget office during the george w. bush administration and currently president of the american action forum an economic think tank. doug thank you very much indeed and happy new year to you. >> thank you, happy new year. >> as i said we started the year a year where that was anticipated in -- in tremendous gloom a lot of

financial uncertainty, a lot of worry, and it starts with with a jobs report that looks like one of the best if not the single best jobs report of this entire tenure expansion. how do you explain the disconnect? what's going on? >>ns i think there are two thins going on.s the stock market has had to adjust to the fact that the fed is no longer buying up tons and tons of treasury and mortgage back securities pumping a lot of cash in there to then chase stocks reverse is happening normal using interest race so money is more expensive there are downsizing portfolio socking up that excess cash and volatility return to thee market and i think if take a little adjustment, and we've saw that equities have bid overvalued just because of the easy cash and that went away so -- that's just an underlying process it is in the a bad thing hard to live through i admit but not bad for economy as a whole. second piece is a harder piece which is there has a lot of turbulence in policy world so if

you think of administration trade, it shifts seemingly every day. it is part of the president's tactics to catch people unaware. you walk out of a g20 summit and a the two sides can't agree on what they agreed upon and the market sits and tries to sort out the future and what will be the international environment, what will be global and a pus growth in face of that, it is hard. that gets magnified by fact that fed is trying to figure it out too and narcotic is trying to figure out what the fed will do and a lot of policy uncertainty that's rolling in the markets. >> let's break it down to start with so jobs report on fridays was remarkably good jobs up, unemployment caught a little bit because people came back into the labor force wages were strong. you know, that -- that all point it a very strong economy. and yet some people say, you know, the employment report is a backyard looking record there are concerns and signs perhaps that economy is slowing how do you see 2019 unfolding that moment tomb going to continue through this year?

>> i think the pessimism about a recession in 2019 is completely misplaced. you cannot get a recession in the united states without having household sector go south. and a there is no reason for a very strong household sector to somehow pull back that sharply. over the final three months of 2018, payrolls expanded a rate of about 7%, and that's a greatage yulein growth rate thas strong foundation for income. and we should see continued momentum into f 2019. no question about it. will the economy ultimately slow? yes. itno is inevitably going to slow and only question is toward what will we go back to% or 2.5% that will be a fantastic long-term trend that's a issue it is not a recession but slowdown look like? what could go wrong one concern people have overseas with the market we saw in the market from the peak in a few months ago -- people will confidence is hit right they're 401(k) get hit

housing market seems bit weak as well at the moment right now. could thatnd feed through into a broader loss of confidence that as you say could hit the household sector? >>ct well you can tell stories about it all going wrong there's no question about it. so we have some weak point in the u.s. economy. housing sector iss weak no question about it has been a concern of mine for quite some time. if you look at ceo and cfo confidencece that is come down sharply and then talking about scaling back investment plans. do you layer on top of that slower global growth what we've learned about chinese economy recently you can tell a story where there's a synchronized global down shift and a loss of consumer confidence that would cause people to pull back. i don't think that's the most likeliest scenario but you can't rule it out. > one concern is the fed peoe have talked about and president most notably that the fed is overdoing it raised interest rates are and last few years -- seems to be on path especially after a the jobs report this year. somebody once said recession is

sorry expansions don't die of old age but killed by federal reserve is the fed in danger of overdoing it? >> the fed has not overdone to. so let's i talk about what we kw so far. we're in t an economy that's growing at about 3% plus or minus, thehe real fund rates is about zero there's no way that's overdoing it. so nothing that fed has -- done so far and happens so far i think should be in question. really should be what is number one pace of the hikes in 2019 and beyond that's a fair -- reason for markets to be uncertain and try to sort that out but given they negotiated end of 2018 so successfully, i'm surprised by the lack of confidence in the fed ability to continue to do that. but could have done a tremendous job but they do rapid growth low inflation. they seem to be backing off, you know, they've backed off this shady steady state of increasing interest rates markets expecting far fewer rates this yore and fed is validating that expectation what do you expect fed to do this year? >> i think that fed has said very clearly that they're going

to be data dependent but haven't said fully what that is. so that's a source of -- some uncertainty. whaing we're going to see the fed do is move twice maybe three times and it is going to depend more on what the the jobs report looks like in january, february, with march, than what the stock market looks like in those months. they are conscience of financial market condition, but they are more conscience of what's going ons in the main street economy and monitoring it closely. >> well that washington outside of the federal reserve rest of washington concerns there is, obviously, as i said at the beginning not exactly a spirit a of bipartisanship we he there. government still shutdown. what do you expect out of washington? how much can that impact the economy what do you expect out of washington this year? >> i think that government shutdown we've seen so far is essentially no impact on the economy. ithu is a partial shuttown. it is during duration won't have a big impact on performance of the economy. stepping back to the larger picture on pots, there wasn't a lot that the president had on

the agenda it's not like he had a rich legislative agenda saying we have to get this doin but essentially nothing. so i expect basically gridlock, a lot of nonpolicy investigations and efforts. a lot off testing waters for 200 presidential election, and the focus policy will be on parking lot fed and will be on the administration executive action. the immigration moves, the trade moves those are the important things. coming up, we'll talk more about with a is and what isn't going on in washington this year, and how it might affect the overall economy. stay with us. n this year and how it might affect the overall economy stay with us. ♪ -these people, they speak a language we cannot understand. ♪ [ telephone ringing ] -whoa. [ indistinct talking ] -deductible? -definitely speaking insurance. -additional interest on umbrella policy? -can you translate? -damage minimization of civil commotion.

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former congressional budget is my guest doug thank you, again, let me just one quick more question on m the fed, i see tht we saw that jerome fowl said he wouldn't resign even if donald trump askedim to can he be fired or forced to resign? >> to the best of my understanding, the president could remove him as chairman and could not remove him from the federal reserveve itself remaina member of the board of governors one would hope that's never cross the president's mind i think it will be a tremendously bad move. also not in the president's interest. i mean, there appear it be a conscience effort to set the

scapegoat if things don't go well but better to have things go well that's in his interest for getting reelected hope that's the path they take. >> attention is between the president, of the administration and the federal reserve chairman and nothing new right we've seen that a happen a few times in history.de >> absolutely. what's unusual hereee is the vey public nature of it personal nature of it you know that is this president. using his twitter account to publicly attack in a very personal way. but on policy differences, many presidents have had differences with -- with a fed chairman. you know many fed chairman have visited the president in the ovale office that's not unprecedented often they have a treasury secretary pick up phone or chairman of the economic advisors go have lunch feel are made known and fed ignores them. baling i wonder if ronald reagan had a twitter account tweeting about that back in 1980s. >> consider the great communicator of his day. found a way to do if. quickly staying on washington i want to talk about the deficit.

the -- u.s. is running a huge deficit going to be about a trillion dollars in current fiscal year it's about 5% of the gdp right in saying never in outside war or recession at the federal government run a deficit that large you used to run the cbo that looked at these numbers what's going on there? should we be worried about that? >> i'm worried about it. you know, as a i try to say earlier i'm optimistic about strength of the economy to 2019. but past that this is a big concern. the u.s. is running chronic large deficits 5% gdp on next ten years that's unprecedented it is also quite dangerous it runs risk of -- crowding out private sector activity diminishing greet and run risk of creating strain on financial system, and it is something that is simply unsustainable the only question is when capital markets -- pull the rug out from under us so don't do it i have to

convince is there's noafd that anyone is interested in fixing this problem in washington but it needs to addressed. >> seeing to be fair doug i know there are all kind of factors that go into beyond yields but that bond yield no evidence that of any kind of -- investor strike here either at home or b overseas right people waiting to buy up the governments there. >> bring back the bond market vigilantes there's nothing like that partly because we are now genuinely in global financial system and a big disconnect between the pages of growth must and pace elsewhere and any time that you see yields go up money rushes in and pushes them back down so that mechanism, the one that by which we've got politicians attention through the bond market seemings to be missing right now. going to require political leadership, and the recognition that if you run such large deficits, you will end up having interest payments for example are larger than what u.s. spends in defensese department, they restrict the ability of lawmakers to do things that they like to do.

new initiative can't be pursued but good reasons to get this under control outside of economic warnings out of the bond market. >> very quickly doug because this has the final question and answer. what can be done much of the spending, obviously, is on -- is fixed it is entitlement spending government actually controls on annual basis a very, very small amount of the total budget chai can be done to avoid this really looming crisis that we face? >> take back control. these programs take social security for examplera are crucl aspects of this social safety net and right now, they are providing economic instability and no longer solving income security but creating and doesn't cut benefit by 25% in the a little over a decade let's have one that's financially sustainable, does its job for beneficiaries and does not bleed red ink. this is something that congress needs to do.ho >> still i have to -- wrap you there doug thank you so much indeed thanks for joining us.

>> thank you. >> up next what apple is say about state of the economy and rest of the financial market means. we'll be right back. you need. great news for anyone wh- uh uh - i'm the one who delivers the news around here. ♪ liberty mutual has just announced that they can customize your car insurance so that you only pay for what you need. this is phoebe buckley, on location. uh... thanks, phoebe. ♪ only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ amazon prime video so when you say words like... show me best of prime video

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as we noted apple sent shockwaves through financial market and was first business day of the new year. by cutting its sales forecast for last three months company pointed to weak iphone demand in china had is seeing economy slowing. so is this just an apple specific problem or is there a sign of a bigger economic trouble brewing? that will look at that and what broader market might have in store with two wall street pros chief market vat gist and sam l chief investment strategist at cfra thank you very much. quincy start with with you does apple shock question saw this week does it say something broader about the vulnerability of the american economy in american companies to -- to weakness goafs? ming well i can yeah it certainly does. it wasn't an isolation. when that report came out we also had had weak numbers, the airline stocks, you saw american, you saw delta saying that there was a slowdown. we're seeing it in manufacturing

report coming through. you wouldn't know it from the employment report that we just receive that was very, very strong. but the data are softennening there's no doubt about it. the data are softening and global trade is slow, again, much of itlo stems from a weaker china. but we're seeing it out of the eurozone as well. >> market fell on the apple news and general concerns about china came back, obviously, with a very strong jobs report somewhat. how do you see the year now playing out? we have a very rough end 2018 a lot of concerns about recession a lot of concerns about about corporate earnings. how do you see the market now for as we -- 2019 really gets underway? >> i think that first two days will give investors an idea of what they're going to have to experience for the rest of the year. a lot of volatility. we were lulled to sleep back in 2017. there were only 8 days in which the s&p rose or fell by 1% or more. yet the average since 1950 was 50 and average since 2000 was

70. well, we're in between those numbers right now. andum probably going to be seeig elevated volatility in the year ahead. mainly i i think because while there is slowing going on, that comparisons are also going to be that much tougher the bar was sett very, very high in 2018 at the beginning of the year earnings estimates were about 11 and a20 half percent. and they're likely to come in close to twice that amount so it is pretty hard to get over that kind of a hurdle. >> earnings generally quincy so again we have had been a strong year 2018 perhaps helped to some extent by the tax cut. there's concern about earnings going forward in 2019 how do you see that and how do you see that playing into markets investor sentiment? >> that's interesting because we know that the economy is different than the market had. the market is always looking ahead. what's really -- in my mind important is -- is establish who is winning and

this tug of war in the market. there were those who are saying that market is telling you that there is a recession in the versus, though, saying look there's a difference between a stellar market just moving to slowing. that the market can be very well in a slope. >> just to be clear, though, do you think we're head for recession do you think market is correctly the last couple of months have been correctly anticipating that? >> well, i -- iow don't know yet but i don't think so. i think we're just slowing and slowing is fine. market can -- cool off i and still do quite well. if there is a reare session coming, the market iss going to have to sell off more. you lose about 20 to 30%. so what i'm looking at is revenue growth. because topline revenue growth is one of clearest pictures of demand how many wiget have you saw and small medium or large is once revenue growth slows down they stop spending and ultimately they let go of people. we're a few days into january

what does january traditionally tell us what should investors be looking for in opening month of thier and pretend for the rest of the year. >> there's old saying of as goes january so goes the rest of the year it gives you a very good idea of what will happen for remainedder of the year if i can is up since world war ii, the market is continued to rise almost 85% of the time. and those numbers are confirmed in a preelection year. whether things are there year it is a split environment and republican congress with a split congress we've had eight times since world war ii and average performance has been the worst onin that scenario as compared with any other governmental makeup. quickly we with wrap one word answer you a up year for the market or up or down? >> up -- do you think we're up -- good well thank you very much indeed thank you both forking us my thank you to you.

and reason you're paying more at the pharmacy this year our number of the week is next. ♪ [cell phone rings] where are you? well the squirrels are back in the attic. mom? your dad won't call an exterminator... can i call you back, mom? he says it's personal this time.. if you're a mom, you call at the worst possible time. it's what you do. if you want to save fifteen percent or more on car insurance, you switch to geico. it's what you do. where are you? it's very loud there. are you taking a zumba class?

gerry: time now for number of the week. the six number is 6.3%, average increase of pharmaceutical

prices in the us for 2019. this according to analysis by healthcare software provider rx seating solutions. more than three dozen drugmakers are marking the year by raising prices on hundreds of medicines. leading the pack with 10% for most of their products. that's well above the overall inflation rate but below the increases we saw the past two years. still, washington been taking notice of rising prescription prices. president trump cities were raining them in and proposing a plan record to tell what they charge in television ads. the regrets taken charge in house saying top priority is put a lid on drug cost. how this might be polished with changes in medicare has yet to be determined. as we kick off the new year with divided congress and fears of never-ending gridlock in washington this might be one issue where both sides can find common ground. that is it for us this week. i'll be back next week with more in-depth interviews right here on wall street journal at large.

thank you for joining us. ♪ is we thank you for being with us. jack keane among our guests monday. melissa: breaking tonight, president trump vowing to secure our borders and keep americans safe as stand firm on keeping the government shut until he receives $5.6 billion for his border wall. watch. county * wpresident trump: we we opening until it's solved. the border is a problem of national security. melissa: president trump flirts with the idea of declaring a national emergency to get his wall. but dose have the authority to do that? we are on it.