market is doing fine. looks likes today you don't have to change anything in your portfolio. charles: no you don't. there will be a lot of pressure on folks out there to get in this market. passive investing works both ways. neil cavuto, give you 300 points on upside. neil: i hear about people that write nasty emails. charles: never to you, neil. neil: just to me. the dow is up session highs up 300 points. what is driving that indications china wants to make amends to the united states. bloomberg reported it committed to a six-year buying spree of imports to the united states. they have to make good on that. e we've been talking even though the treasury shot this down yesterday, about easing tariffs ahead of whatever deal is announced. that was deemed to be a step in the right direction, ease the tensions between the sides before formal talks kick off next weekend. talks started off with a

separate issue, a north korean representative getting country to denuclearize. there was criticism north koreans were dragging their feet. we'll see what happens with the one-on-one with the secretary of state. that gets back to the president of the united states who lives in the white house, outside of which we have blake burman. what the is latest there? reporter: a little bit of activity. we'll head headlines from all over the world. right here at the west wing, president trump is set to meet with treasury secretary steve mnuchin this hour. i'm told this is considered a routine meeting between the president and one of his top cabinet secretaries. the opening of the world bank is one of the items that the president will discuss as treasury secretary is leading search for that sudden new position to lead the world bank. it is certainly good timing for the president and treasury secretary to be sitting down, coming on the heels of this report from bloomberg which says that china would be open to drastically reducing the trade surplus, bringing it down to

zero by 2024. here is what i can tell you, neil. there was this major trade meeting, a major trade meeting two days ago i believe over here at the white house that lasted a couple of hours. i'm told that at one of the major things that i've been directed to, remember, it was the treasury department that shot down along with the white house that shot down yesterday that "wall street journal" report. then you got this report from bloomberg which is the white house is not commenting on. strip all of that aside, what i'm told is one of the crucial moments in all of this is going to come in a couple weeks, about 10 days from now, when the top negotiator for china comes over to the u.s. and meets with the u.s. side. that i am told is going to be a pivotal moment when china's top negotiator combs over here and both sides sit down face-to-face to hash all this out. you have all the headlines but look couple weeks from now when

that meeting occurs. speaking of top negotiators, the top negotiate for for north korea is we believe right now meeting with president trump, if not at this moment, certainly soon as the secretary of state mike pompeo met just a little while ago with kim cho. that delegation ended up making its way to the white house. we'll see what comes between that meeting with president trump and number two in north korea, at least number two as it relates to the denuclearization talks. whether a second summit comes from it. neil: i didn't know it was moved to the white house. that is interesting. thank you, my friend, blake burman at the white house. markets are pouncing on the trade news. the prospects of trade dictate the future of this market even more than government shutdown that seems non-event to investors cruel as that might be with people. with tension between nancy pelosi and president. much is focused on trade with

china. any story looks at this being a promising development, chinese commitment according to bloomberg to buy more american goods next six years, to erase the trade gap. second report we're doing something to help the chinese out as well, easing tariffs ahead of what would be any trade deal, that is a one-two punch the markets welcome and like for now. to chief global market strategist, katherine rooney and scott martin. what do you make of the latest developments and wall street pouncing on them? >> this is good news. not surprised the market likes them. we have been here before and made progress, taken a couple steps back later. i can't get excited to run around in the streets. reality this is progress. i really like how your setup was, the trade deals, tariff

wars fading away to get over some other issues out there with respect to issues with pelosi. obviously issues with the mueller report. other things can help get the trump agenda going. more tax cuts, infrastructure spending potentially. this is one step, maybe other steps that markets can take with respect to finally getting past some of the malaise we had upon us last couple months. neil: i don't see anything happen in the layout scott brilliantly talking the tax cut part. i don't see that much happening that front with a democratic house. i could be pleasantly surprised. i see prospects after trade deal. the question what does someone like you wan to see that? the market is so far past writing off on any deal it better be a good one, right? >> right. neil, i will say the following, trading narrative that armageddon is coming because of a trade war has been narrative, especially the media the past three or four months.

it is one of the clutch reasons, if not the primary reason for the market correction. we almost hit top to bottom 20%. we almost hit bear market territory. that was because of a trade war which was being spread all over the place and two, fed. now we're talking about recession. a lot of media, not talking about you guys, but the word now, zeitgeist, the exciting word for everyone is recession. we're going into recession. what i'm telling my clients, i've been on your program saying same thing, buy this market. a year from now we'll look back, saying you can make a lot of money on this false narrative and this fear of recession and trade war. neil: that's very interesting. what i always wonder about too, scott is we get a trade deal, it might be a very good one and it might be very solid and the chinese might make good on their commitment to buy more stuff from us but they fall into a slowdown or worse, no matter what they do to goose their economy and they're doing a lot

with upwards of dollar equivalent, nearly $90 billion worth of stimulus just to prop things up and they can't, then they're not going to be able to make good on those promises, right? >> yeah. all of sudden that deals loses a lot of its punch frankly, you're right. china is already there. if you want any evidence of a slowdown in china look at their stock market. my goodness, 30% off highs and going down further that is the issue too, neil. it is how china comes to the table, how do they pay for it? more currency manipulation which they have been famous for? is it printing of money to just create funds to pay for this which really isn't economic growth. depending on how this pans out really whether to your point this deal is a good one. it is good progress. it helps with kind of overall global outlook with respect to us getting along with china on trade basis, could even lift the global economy to some degree.

neil: one thing, catherine, the thing in the picture which doesn't jibe with all the bullishness, i'm not a glass half empty person, market, interest rates are very low, and short term eclipse those out of long-term rates outside of fed's control which generally presage as recession or at the very least a slow down, so that might keep the fed at bay but i'm wondering if stocks are running away with something here based on all of the wrong things? what do you think? >> well the fed has met its dual mandate, neil. we have full employment and we have tame inflation. really the fed doesn't have to hike more aggressively than the current pace it is dictating which is maybe one more next year. i would say combination of a strong economy which we in fact have. if we push through kind of all of the noise that is surrounding us, just as an economist as i am, look at the numbers, the economy is strong. i don't see recession on near-term horizon. if we look at earnings growth, by the way, neil, look we had

one week of earnings reports but earnings are up 19% year-over-year. i like to look at places where they have been battered by fear, industrials. because of trade war. financials because of a fear of recession. these are cyclicals. so these are sectors that can make money for a portfolio in 2019. i would say energy is as well. we've seen energy come back up. communications, that's another name, another sector. i would contend we have to look at fundamental analysis here. look at fact, china, neil, has been decelerating. now we're talking about as if it's a new thing. china has been decelerating for the past 10 years. look at a chart, an economic growth chart in china, been decelerating from 14 1/2% to 6 1/2% every year because of readjustment to the chinese economy. i'm not going to say they won't continue to do so, in fact they are, but they have the capacity

to execute stimulus to large magnitude. i would contend if they see deceleration coming below 6% you will get a fiscal stimulus and large one. neil: from your mouth to the market's ears. scott, one thing we learned about the chinese over the years is they talk a good game but they don't deliver the goods and they will talk about doing all sorts of stuff and they don't do it. that is the history with the republican and democratic presidents alike so much is going to be up to us to trust by verify and make sure they make good. what if they don't? >> it is going to be a problem but probably more of the same you're right, neil. they don't deliver. if they don't deliver, guess what, they steal. that is the one thing going forward. look at ip stolen from great american companies every year from the deals they have to make to sell goods in china and trade secrets. i'm worried about enforcement. glad you brought that up. as great and happy as deals could sound we'll construct with

them, enforcement part is where rubber meets the road. if history is any guide, they have not been able to be allegiant to those promises. hopefully we get better enforcement this time because these deals are moot if you can't. neil: thank you both very much. there is a lot in play as we close in on second anniversary of donald trump as president of the united states. also time to look back, and look at a show will be a year old at that point. a live show, neil cavuto live. it is ridiculous, it is not about me but the show with my name in it, we'll look where we stand two years into the trump presidency. some of the issues we talked about a year ago are germain today. what china will do to make good on threats. whether earnings keep up with a market running at a fast pace. we would know later on by the end of the same year that pace would be tested but it is being reversed right now. and we're looking at the

strongest january start, strongest start of any year since 1987. curiously enough, we'll explore this, this weekend, we all know what happened at the end of that year. both sides, all side, tomorrow, live, after this.

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neil: maybe declare an emergency be done with it? >> i don't think that is the best way to run government either. what i offered is the shutdown prevention act, if would do, got to a cliff, got to a date government funding was not done, government funding would continue with 1% cut. 90 days later if you still hadn't passed your appropriation bills, it woo go to 98%, funding, 97%, would keep going down a percent every 90 days. my guess we would get the appropriations bills done quickly. neil: that is not a bad idea with rand paul on "your world." the programs they held near and dear health captive with 1% decline on daily basis until they resolve it. if it is more than one issue

like the wall or a lot of your issues height not be the wall it behooves you to get something settled. obviously, republican support for that is senator rand paul was telling me, not a single democratic taker. i don't know where that is going. he also posited alternative for president of the if nancy pelosi is not allowing him to the well of the house for the state of the union address. he could hop, skip and jump over to the senate side to speak. there i don't know how you are familiar there with the structure. a lot fewer seats. not nearly as big or accommodative to the press or what have you. it would be tough but it could be done. we have not heard anything back from the white house on my idea to hold it at an olive garden or ihop. because you meet with the people. you know it, and you get the special. but again, we're talking to the president, still has plans to deliver an address to the american people. one way, shape or form, many also calling and emailing about whether the speaker of the house can disinvite a president and

technically some say yeah, she can in this case because she could be inviting him into her house. democrats control the house. others are just as obestin meant say this is not etched in the constitution, this is a perfunctory thing. sort of like an invite courtesy thing. technically involves the speaker inviting the president to appear in the well of the house, you're just talking about niceties that are easily, you know overrulable. i don't know who is right. i do know that the white house is considering its options. still wants to give a speech. doesn't want it a written speech. doesn't want it written update on the state of the union. so one way, shape, or form in couple weeks the president is going to deliver an address to the nation. we just don't know from where, again, olive garden stands. ihop stands a little more after this. steal your car because, well, that's my job.

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neil: you know the trouble with

netflix these days, kind of like the apple problem. if you're selling a lot of stuff let's say in this case you're signing up nearly nine million new subscribers it is deemed a disappointment because the market expected you to sign up hundreds of thousands more. so there is disappointment about the pace of your growth, whether you can maintain the torrid pace. the company already indicated it will charge folks, existing customers, new ones coming on board up to 18% more on privilege of being a netflix customer. maybe there is resistance there. it had been weighing on the stock. kristina partsinevelos looking at all of that. >> it comes to about 2 bucks a pop. we'll see if subscribers say, hey, i don't want netflix anymore. that will probably show up june quarter because it takes three months to prices to go higher. we saw the selloff immediately after earnings yesterday, part of pockets of concern. you have got cash burn for the company.

$3 billion. hooks like they continue to spend a lot of money. you have a possible saturation, a lot of talk about saturation in the united states. yes subscriber growth has increased but have they hit all the potential in the united states especially with all the competition we keep talking about? hulu, disney, hbo and the like and even apple getting in and concerns about the price hike, neil, you raised could people leave the platform? so what is wall street saying? there is a bunch of reports, mixed reports actually. let's start with wedbush. they are more negative on the stock. the price hike that the company will be vulnerable to price competition. there could be potential bidding wars for content, the way netflix ands out from the pack is having great content. goldman sachs, bank of america say pretty much the same thing, a lot of strength for the company because of international growth. bank of america highlighted the cash burn. they are spending a lot of money to keep us locked in and it is interesting, reed hastings, i

think about a year ago the biggest competition for netflix was sleep. now he is saying it "fortnite," "fortnite" being the videogame. we talk about the negatives and end on some of the positives for the company. international growth, the fact they are creating content globally, so that could help reduce margins. you have the possibility of putting those movies in movie theaters like they did with "roma quote, neil. neil: not too bad. we'll see where they go with that. netflix is worried more about "fortnite" than hbo or disney. to john meyer. why is that, john? why is fortnight a bigger threat than some of these others? >> "fortnite" is bigger effect, because netflix has premier market on streaming but only thing second to netflix, other products taking users attention away such as young people,

millenial teenagers, et cetera, who at this point are completely glued to netflix. neil: what is it with "fortnite," it withstood the 15 minutes of fame, right? i wonder how that happened and how much longer it continues to happen? >> yeah i think the statement by the ceo of netflix is probably a bit of a comical half-joke statement. i think what he is trying to say is that netflix is just so far superior as far as product goes, at least right now, than original content goes it is not going to be another media company that is doing content such as netflix that poses a threat at least in their opinion right now however the thing that i'm, i would say, if there is one thing i'm concerned about right now with netflix it will be the unknowns around what apple will release because other than that i remain very, very bullish on netflix especially because of the fact that, you know, while 10% is a big number

when you look at the, you know, just how big of a market che they have of u.s. viewing hours, i think there is a lot more for them to, to grab for themselves over the next few years, again especially as continue to invest in original content which in my opinion is the thing that netflix is making a very, you know, strong stick in the ground for as a strength. neil: i know they obviously committed to buying more content, paying a lot for that but you have to get a return on that. you look at a stock investors last day or two notwithstanding are convinced their strategy is a good one. many liken to amazon early days building up infrastructure to help this retail behemoth. i don't know that applies, but buying a lot of content makes it second to none for streaming and all that, will justify for all that. do you think that is right?

you can pick up lousy content, right? you can pick up lousy shows you're doing on your own and they don't register with the public. >> correct. absolutely you're completely right and i think what is making a bit of a difference for netflix, in fact a pretty significant difference is the fact that netflix has over the last decade, you know, they perfected this model of coming out with not just content but content that fundamentally causes i'd say waves in social circles, friends, family, et cetera. you see this with originally with "house of cards." you saw it with "stranger things." it is clearly a repeatable model for them, it is not just content they're releasing. they continue to release content that fundamentally causes almost the social revolutions around their product, which is incredible, especially considering that in my opinion, as you talked on this network a

few days ago, there is still lots more growth for netflix, especially as more consumers get even more time on their hands to watch content from other interesting, you know, advances in tech. such as the fact that you know, in the next few years we'll be using netflix even more as we roll out into more self-driving car use and we have to find a way to pastime in these cars. so i think just netflix has monumental head start on this i compare this to, you know, blockbuster, you know, way back when and how late to the game they were. neil: right. >> and i think that could be the same with some of the competitors. i think the big unknown right now is apple. neil: when you say the big unknown is apple, whether it gets into the content business, either buys content or starts making its own? >> well, thank you for asking me to clarify. i think what i'm referring to on apple's front they have already put in a massive amount of money

into starting a content machine. the thing i'm questioning is whether or not apple is going to know what they're doing as far as marketing this content and creating similar social revolutions around the shows that netflix has been so great with. there is a part of me that looks at apple's track record of some of their testing original content and tests in creating social revolutions of sorts, if you recall, apple had a pretty big flop when they tried to create a social network around music. neil: right. >> and then lost a lot of their market share to spotify because they were too late to the streaming game for music. so this is a big point for apple, big point from netflix over the next few months as we see what apple is going to release because it will being in my opinion will be almost dead on arrival flop within the first six months of apple releasing this, or, if they could capture

some of the attention from consumers in a way that netflix does where you're creating again these social revolutions around these shows like "stranger things" and, there is now, i mean you cap count, the list is increasing on the number of shows where you walk on a sidewalk, on a subway, in your grocery store people are talking about these netflix originals. neil: no, you're right. >> because they figured out this, this model behind how do we not just create great content people want to watch, but how do we create content so compelling that our market something done for us as netflix. neil: sandra bullock and that special, people are running around in blindfolds, it seeped into our culture. >> correct. i think they are incredibly, incredibly in touch with millenials and the younger generations which is something that i also worry about newer entrants with disney because,

that, you know, see this even in politics where you have some democratic politicians, trying to be on instagram and they are just dead on arrival because they're so out of touch with the way millenials like to interact with this kind of communication. and netflix does that well. we haven't seen if any of these competitors will do that yet. because of that, i remain very bullish on netflix over the next few years. neil: that is interesting. you know your stuff, john. i appreciate just stepping back -- >> thank you. neil: intricacies of wall street looking at the big picture. we'll see. john, thank you very, very much. >> thank you. neil: john meyer. meantime we're looking at the weather, a big snowstorm about to hit pretty much the entire country through the weaken here. harper as he is known, did they assign a sex to the storm? it is so massive, everyone is going to get rain or snow or i.c.e. or something attached to

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neil: all right. it will be a doozy. we're expecting a lot of parts of the country with heavy snow, certainly bitter cold and all hitting continental united states hard. fox meteorologist rick reichmuth with more. hey, rick. >> a big storm we were watching. yesterday it was across parts of southern california. parts of california will dry out, non-california, pacific northwest remains active with more storms coming in. maybe half-inch to an inch for some people. this back here is the one that we're concerned about and is getting organized. we have winter storm warnings across parts of central plains, iowa, missouri, illinois, wisconsin, and parts into minnesota. as that moves forward, you see all the pink? that is winter storm warnings as

well. winter storm watches in the blue. less exactly where the track of the storm goes. that said, neil, most of indication is pulling it a little bit interior. that has big impacts especially across coastal areas. a lot of rain on severe weather, southern side, could be flooding, eventually towards parts of the northeast, out of here by sunday afternoon. look at it closer on big cities, d.c., baltimore, philadelphia, new york, boston and portland. all of this getting going in saturday afternoon for cities. you notice by saturday, 9:00 p.m., a little bit of snow here in new york. rain likely, in philadelphia and d.c. you're pretty much rain this entire time. right now the storm track goes a little farther in. that bringings little more area and more rain. snow across the interior ex-is. one other thing to tell you, most model guidance is decreasing storm totals a little bit from this.

yesterday we were saying 24 plus inches of snow, now we're maybe saying 18 to 24. still a lot of snow but maybe not quite as much. you notice here, right there, along the i-95 corridor, maybe southern parts of connecticut we're talking a little bit of more rain with it. that would keep snowfall totals down a little bit. two most reliable models, a inch or so in new york. boston might be a little higher than that a big concern of this a lot of places will get that snow, some people see rain mixed in. that will create a slushy mess. look what happens as we move forward into monday. the storm getting out sunday evening. sunday night cold air comes rushing in. high temperatures, 10 degrees for monday. 12 degrees in new york city. 22 in d.c. moisture on the ground, snow, sleet, slushy pez will rapidly freeze. that will be with you a number of days after that. sunday afternoon once the snow is done, i encourage neil, get

outside, have the kids get outside, shovel the snow out right away, otherwise it will freeze and not get it out of there probably for couple weeks. hear me? neil: you know how difficult it will be to get two teenage boys to do that but i will try. >> guilt, bribes, whatever. make them get out there and do it. neil: i love your report. you know why? you don't sensationalize it. call it as you see night do my best. neil: my producers weil not do dramatic music going into this until rick's gone. >> bring it in. neil: thank you very much. >> storm of the century. neil: darn it, you already heard that. thank you very, very much. >> you bet. neil: another guy doesn't overplay it, joining us out of chicago, jeff flock, where is the storm will hit and it is going to be a decent system jeff, what you got? reporter: we have always seen something worse, neil, there you go. i suspect that will be the case. as you sigh behind me, they're ready in chicago.

we're the first big city in the path of this storm. storm warning goes into effect three hours. that is pile of salt not used very much this year so far. 350,000 tons of salt in the city of chicago. they may need some of it here in the next few days. we're looking between three and 8 inches according to rick and his forecast. it will hit us starting in about three hours. the hours between 8:00 p.m. tonight and 6:00 tomorrow morning are going to be the worst of it. and as rick pointed out, it is going to get cold and that is not going to be pretty. take a look at cancellations thus far. amtrak, a lot of trains canceled. so far in the u.s. according to flightaware, our friends over there, approaching 2,000 delays so far at u.s. airports, and approaching 300 cancellations so far. the worst of it at laguardia, atlanta, here in chicago at

o'hare. i will leave you perhaps with a picture of a guy playing with the salt out there. 350,000 tons in chicago. you know the snowplow drivers, neil, have been disappointed so far this winter. a lot of these guys rely on money they get from plowing snow. i guess they get their wish in the next day or so, neil. neil: do we know what he is doing with the salt? i don't see him putting it in trucks. is he moving it around? reporter: seems to play with it at moment. they have to have it, they don't want it congealed or stuck together, get lights and ready to rock. that is my guess. neil: i could spend my whole day just watching that. jeff, thank you very, very much, my friend. what is he doing? they will need a lot of salt because it will be, a lot of snow. federal workers meanwhile who are interested in being helped go fund me page for them,

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♪ neil: all right. now a month now, the longest government shutdown in history and a lot of folks are doing what they can to help better than 800,000 federal workers affected and more. 2200 gofundme campaigns have been launched. they raised a lot of money. about $630,000 so far exponentially growing. former ohio secretary of state, trump team member, ken blackwell. do you think, ken, whoever is blamed for starting this, keeping it going, it is going to boomerang on the president? people will associate their pain, these workers pain, and all the gofundme campaigns to help them out, lying at the foot of the white house? what do you say?

>> no. i don't think so, neil. i think the president has very clearly he is is willing to come to the table and negotiate. in a theoretical or three attributing call framework, new york tough meets california crazy. in the final analysis, president of the united states who has as his responsibility the national security of this nation basically saying, there is a common sense result, if we can spend .1 of 1% of a 4 trillion-dollar budget on a barrier that would enhance security and if we don't, we will continue to see human misery in our neighborhoods and our families as a consequence, of untoward activity, drug trafficking, human trafficking, criminal elements coming across

a open border, a porous border on our southern border. that is, i don't think the president will lose this argument. i think he had a set-back he prematurely said he will own it but i think he can work right through that. i thought what he did -- neil: do you think in retrospect, the own it comment, ken, not respecting that, government shut down was right way to go about it? while that is common procedure it seems, given number of shut downs we've had, it will embolden the next president to do the same thing he or she wants. on and on we go. coming it did as we had a plan, this is before democrats got locked into this position of no wall, or nancy pelosi calling it immoral, at that time the rhetoric hadn't ratcheted up to the degree it has now and it is too late for a deal? >> well this president has, was taken to the cleaners on the last budget deal.

you know that. and he basically said at that point that he wouldn't go down that path again. fooled me once, shame on you, feel me twice, shame on me. neil: what he didn't like about a the last budget deal, what he didn't like last budget deal, all goodies added on. that latest budgets that more goodies, more spending that is the not issue. >> i think this president is basically saying look, we're going to do what this federal government was designed to do, that is to protect national security and public safety of our citizens. that is our first, that is our first obligation. and he is shown a willingness to do that. but i think he has to draw a line in the sand, this is a responsible line, he is basically tried to make sure that he is softened the blow as much as he can, but reality is, that we can, we can talk about

the legitimate suffering that is going on now by 800,000 employees but there is a counter balance to it and that is, if we don't get this right in terms of our national security, there is a whole lot more human misery and suffering and death that takes place as a consequence of irresponsible bureaucracy being indifferent to the safety of people in our families and in our neighborhoods. i mean this is a, this is, this is a principleed fight. this is not a silly fight. this a principled fight. as mayor of a major city, the death associated with drug trafficking coming in through a porous border is in fact problematic and something that needs to be addressed not only by governed, but by the federal government. neil: by a wall? the wall is only wray to do

that? >> it is not just the wall. again we're talking about $5.7 billion which is 1/10 of 1% but he talked about a comprehensive approach. ininclues in the comprehensive approach is a wall, barrier, whether steel barrier or a wall but the reality is, is that this president has given and given and given and he basically said no more. and the democrats who have voted for way more funding of a physical barrier than this in the past, they are only resisting because donald trump is asking. but what they are miss something that he is not asking for his own sake. he is asking for the sake and safety of the people of this country. neil: all right. ken blackwell, i'm going to take a leap here, say you take the president's side on this one. always good seeing you. be well. >> happy new year, brother. neil: you as well, my friend.

neil: we have the tsa administrator under barack obama. john, very good to have you. we could argue the pros and cons who is at fault but many looking at this, seeing longer lines at airports. many travelers have been told, try to get there even for domestic flight three hours early. delta has put numbers to paper, says this is costing airlines $25 million a month. what do you think of all that? >> i think there is a number of issues involved. one is just the efficiency in the system which is being affected obviously by fewer tsa workers at the checkpoints and around the airports as we normally would be available because of people calling in with unscheduled leave. whether that is actual sick leave or whatever. neil: how do you prove that, john? many people have sickouts or whatever. you can't prove that. >> sure. neil: a disproportionate number have, and they're not supposed to do that but what do you think? >> well, so i think some are

calling out in protest because they're working without getting paid. for example, i traveled through seven airports the last couple weeks. one of those was oklahoma city where during the shift i went through, they had 37 tsa employees working. two had called in sick. and they were actually, the flu had been going around. they were actually in good shape in terms of wait times and thinks like that but obviously atlanta is being adversely impacted. tsa is sending employees from other airports to help out. the challenge, neil, as this goes on, then more and more people will be opting out of going to work by, because they need the money. they're looking for other work. perhaps they found other work now. so that is part of challenge just on efficiency of the system, not even dealing with the security side of things which is, the biggest concern i think. neil: you know, john, air traffic controllers caught up in this as well.

they do report anecdotally sickouts and the like. is there a sense any of this is threat to safety of flying? >> yes. the concern that i, i think others in the security business have is that the men and women of tsa, the air traffic controllers are all professionals. i would describe the tsa employees, i talked to several dozen over the last few weeks traveling, dedicated professionals. they're resilient but they're tired and they're frustrated with the politics of it all. and so the concern is that a potential terrorist may see this as an opportunity to try to exploit a perceived vulnerability. i don't think there is at this point but may try to exploit that, such as underwear bomber from christmas day 2009 or other overseas attempts that have done, been attempted to try to

exploit what they perceive as vulnerability. i think the men and women of tsa are stepping up doing what needs to be done. but every day that the shutdown goes on causes greater frustration and people are tired. you know, so that is the challenge. so i don't think it is because anything, obviously, they're going to focus on the greatest threats, nonmetallic, improvised explosive devices that can go through walk-through metal detectors. that is part of a concern. but it is simply fatigue. does somebody miss something because -- neil: they have to keep an eye on that. everyone keep their wits about them. john, thank you very, very much. we'll have fall rout from this right after this.

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neil: it's not about what's going on with brexit and whether it stays gories fror goes from european union. it's not about the government shutdown or even murky numbers which aren't always up to snuff, particularly in the financial arena. and it's not about signs consumers might be slowing down their purchases. it has everything to do with the prospects we are going to get a trade deal with china, maybe sooner than we think. reports that the chinese have committed themselves, this is coming from bloomberg, to a six-year plan to eradicate the gap, trade gap between our two countries. this comes a day after signs

since disputed by treasury that we might remove or reduce some of the tariffs on chinese goods in a good faith effort ahead of the deal itself. to edward lawrence on capitol hill with the very latest. it's clear the markets like it. the markets are up on this. go ahead. reporter: they really are. it's interesting, though, because based on the news that the u.s. treasury secretary steve mnuchin floated the idea of lifting tariffs, although officially, treasury officials deny that that ever took place, but still, china announced that six-year plan in order to buy many u.s. products to offset the trade deficit that we're seeing. that's according to bloomberg, also reuters. this is exactly what the u.s. trade representative robert lighthizer is concerned about on several occasions. he's worried the chinese will try and buy themselves out of the tariff hole. the u.s. will jump at it and leave in place policies that still steal intellectual property of u.s. companies. the chinese confirm their top negotiator is coming here to washington, d.c. on january 30th

and 31st. that's the vice premier. that is a critical meeting going forward. kellyanne conway, adviser to the president, says the fact the chinese are even talking about trade moving forward shows that the president's policies on trade work. >> that's exactly what we see happening, because of president trump's trade policies, that these other countries are going to open up their markets. these countries have been stealing our i.p., our technology. we have had tremendous trade imbalances. why should we have billions of dollars in a trade deficit with countries that are prosperous? reporter: the markets like it, regardless of what may be true or not, the fact is they are talking about moving forward and that meeting set. it's nothing like the stalemate you see in the government shutdown here. at least the two sides are talking. neil: thank you very, very much. this trade optimism is seeing the biggest and the best weekly winning streak for the markets in some six months, and the best

start to a year since 1987. leave aside how 1987 ended. let's go to gerri willis at the new york stock exchange with what's driving this. gerri: well, we have this absolutely right. you can call it day two of this week's trade rally. stocks with heavy exposure to china moving higher today on news that china, as we have been saying, said to be offering a path to eliminate the trade imbalance with the u.s. in negotiations. under discussion, a six-year buying spree by china that would amount to $1 trillion in additional imports to china from the u.s. currently the deficit stands at $323 billion. as that news hit the tape, stocks moved higher. among today's winners, take a look here, chip makers micron, nvidia, intel. keep in mind that sector will be reporting earnings next week. that's important. but there are other winners, u.s. agricultural plays like tyson foods, sanderson farms, also winners as you can see. big industrial behemoths like

boeing and caterpillar and 3m also doing terrific today as well. now, yesterday the "wall street journal" reporting the u.s. was weighing lifting china tariffs in order to calm markets and give beijing an incentive to make deeper concessions in trade negotiations. the white house has knocked down that story but regardless, wall street traders down here on the floor of the new york stock exchange, euphoric over the idea we can get some kind of trade deal. i would say it will pay to watch the reports of the chip makers next week. intel will be out. they are not part of the apple sphere, if you want to know what's going on beyond handsets and iphones. you want to listen to that. neil: quite right. all right. let's get the read on all of this from "wall street journal" associate editor and independent woman's forum rep. hadley, what do the markets see?

>> i think it's based on optimism based on mnuchin saying he would consider eliminating tariffs on the chinese even ahead of establishing a deal. certainly that's good cause for optimism. bottom line, i don't believe the trump administration ever intended for tariffs to be a long term policy but instead, were hoping to use them as a tool, as a pressure point, to reach a deal. if that's the case, in the long run, we can reduce barriers to trade, have a positive development with the chinese and reach an ultimate deal that's to our benefit and to the benefit of people everywhere. neil: i certainly hope you're right but john, maybe it's the cynic in me but the chinese have not always delivered on promises in the past. when i hear of a plan over six years to eradicate the trade gap between our two countries and to buy up american imports like crazy, two things hit me. one, they have not been good on promises in the past and two, six years would be well past the administration point, assuming

it gets, you know, another lease on life and a second term. your thoughts? >> yeah. you are absolutely right. the business community is thinking the same thing you are. this is bob davis yesterday, the treasury department or steve mnuchin is in favor of giving them an incentive, lifting the tariffs in the hopes they are going to continue to negotiate. look, wherever you are, hawk or dove on trade, this would be the u.s. blinking and the chinese would take advantage of that. they are attempting to do the politically right thing by president trump and buy their way out of this problem. they want to buy more u.s. products. that could be good for the market in the short run, bad for business in the long run, because it is not resolving the issues that lighthizer wants resolved, the theft of intellectual property, the forced transfer of u.s. technology to china, the state-owned enterprises that are subsidized by the government and are unfair competitors globally.

those are the big issues. china wants the u.s. to blink and you may see that happening in front of your eyes right now. neil: yeah. sometimes mutual blinking is okay, if you want to just protect your reputation. but you know, one thing i want to raise is, let's say we do get a deal, but all this evidence of the chinese slowdown begins to build, beginning with the supplier to apple, slashing forecast based on weak demand from, you guessed it, china. we have seen this play out in a number of cases with companies. so we get a deal, but china can't make good on it not because they are duplicitous but because they are too weak. >> there's good reason for the concerns that you and john mentioned. i think the attitude represented by robert lighthizer and in a different camp, steve mnuchin saying when it comes to negotiations, you have to be firm but the question is do you also have to be flexible.

when it comes to the chinese, i think there's every reason to trust but verify. maybe do a little more verifying. we want a strong global economy in addition to a strong american economy. i think a lot of the fundamentals of our domestic economy are good, but we don't live in a vacuum certainly. we don't want to see global slowdown affecting us in various ways, whether it's changes to fed policy, on interest rates or of course, impacting investors and companies that call america home. neil: john, are you surprised the shutdown, whatever the pain for the 800,000 plus federal workers affected, and the spreading pain at airports and small businesses unable to get loans because the sba is shut down or people closing on fha backed loans because the fha is essentially shut down, that none of that has hit the markets maybe yet, but what do you make of that? >> yeah. i think the shutdown fits into a bigger picture of volatility in washington. that affects the market. uncertainty about a lot of

different things, trade policy, national security policy, are we in nato, out of nato, the shutdown. but from a very specific standpoint, the shutdown is not having a major impact on the economy. it's $1 billion to $2 billion of lost output every week. that's not huge in a multi trillion economy like the united states. so the market is kind of looking out ahead of this and saying for all of the coverage, this isn't affecting the economy and business as much as you might think by the volume of the coverage. much bigger is trade with china, how is the u.s. going to get along with this emerged superpower in the years to come, and we are seeing a chapter of that written right now. neil: hadley, does the shutdown worry you? does it come into play here? as john pointed out, it's not front and center worry for the markets. i guess the understanding seems to be once the government is back in business, all of this evens out. what do you think? >> yeah. in the past, we can look at government shutdowns,

particularly those where federal workers have gone without a paycheck, and we see some kind of slowdown associated with that, especially with consumer spending for people who are directly affected. interestingly, rasmussen says 89% of americans say they felt no impact or minor impact personally based on the shutdown. but i will say at this point, reaching four weeks, we are a little bit in uncharted territory. this shutdown stretching on into a historic length so in the past, when government workers have received their back pay, the boost to the economy associated with that has erased any slowdown. we'll see if that's going to be the case now that we have reached that historically long shutdown time period. neil: the so-called hurricane effect. we'll see. thank you both very, very much. as you know, tomorrow will be day 29. we are told there are going to be a lot of private little meetings going on back and forth. so far, none publicly acknowledged here but it's a good time to sort of assess where the shutdown stands, where the china talks stand, where the talks with north korea stand. a lot of various inflection

point developments that will have us live tomorrow on fox news. it will be our one-year anniversary. the show has been on for the year. people are saying has it been important that you work saturdays and work six days? i say for america, it is. which is my way of saying you're welcome, america. see you tomorrow. more after this. makes it beautiful. state of the art technology makes it brilliant. the visionary lexus nx. lease the 2019 nx 300 for $339/mo. for 36 months. experience amazing at your lexus dealer.

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neil: take a look at the dow here. netflix of course has gone along with this buying mood but the dow up 321 points here. technology is a big leader there. we are off to the best start for a month in a year, in 32 years. that could change. we still have a ways to go here. but it is a reminder that whatever the market was falling apart on at the end of the year, around christmas time and right before, right after thanksgiving, it has made up that ground or a good deal of it. netflix is indicative of that, showing an appetite on the part of the consumer to pay more for something they really like. the jury is still out on that. but our tech analyst is here. i look at netflix as a reminder of the consumer's willingness to take on a slightly bigger price tag to get something they really like.

they might do that in the case of a netflix, not necessarily in the case of an apple, but the strength of the consumer is what is driving this. what do you think? >> yeah. i think it's the strength of their desire for the great content that netflix is putting out and their maybe addiction to some of the content that's on the netflix platform but you are also seeing, you know, this is $1, $2 incremental increase per month, it is a good percentage of the subscription fee but it doesn't feel like a ton of money when you hear an apple price of iphone going up hundreds of dollars. neil: right. you might be right, there's a big distinction there. netflix itself, i always liken this, you will put me straight here, very similar to amazon that it was building up this huge infrastructure, never making money, and it was really, if you think about it, only the last couple years it started making money off all of this. but it had to get the infrastructure in place to do it. netflix is paying dearly and heavily and appreciably for a

lot of content to build this sort of one-stop streaming behemoth and that it will pay huge dividends if it hasn't already down the road. do you buy that? >> i do. i also believe that the dividends that it will pay dividends to not only invest in the production of this content but they are making smart decisions about how they are producing the content. they are buying production studios on the cheap. they bought one in new mexico at a huge discount in october. they are investing in the new original content but also making smart moves about how they are producing that content and really spending internationally to produce over 100 shows this coming year in international markets. neil: can that be too much? i'm a netflix customer. it's overwhelming. i like documentaries, i'm big on documentaries. it goes with my being extremely dull. that's where i focus. but there are so many choices even in that category, so many

choices, hit tv shows and movies now, it's overwhelming. does it risk that as a company it's overdoing it? >> i think netflix documentaries are quite cool and hip. neil: thank you very much. dismissive remark but i admire you saying that. >> but i think two of the bigger challenges netflix faces, one of them is the overload of content and that a lot of these older -- listen, i have a roku device from several years ago in my house. the netflix app on roku is awful. now, it's an older device and i understand actually i should upgrade, but i have an awful experience with netflix on certain devices that i have in my house. now, of course, there's others where it's a wonderful experience. so netflix is challenged there. i also feel like as a parent, i don't find as much content for my kids on netflix so i find myself going to prime a lot more or hulu a lot more for my kiddos and might not be their market but it is something that i think

is a huge opportunity if they can get that right. neil: netflix has more content than those guys, right? isn't that the big thing it brags about. but apple could storm into this pool in a much bigger way, and i'm just wondering, as companies weigh how they want to grow in this business, whether they take that netflix model and take it to new levels. >> we have seen apple was announcing last year how much original production they are going to embark upon. clearly, you know, what we'll see, it will be interesting, is whether or not apple produced shows and movies can get the kind of momentum that we're seeing from bird box and that new thriller "you" that's really targeting millenials on netflix and has done so well. so it's really a question mark around the content and catchiness of the content. neil: you're right about that.

great job. thanks for throwing a bone to me here that i'm not as much of a nerd as i thought. >> i like those documentaries. neil: thank you very, very much. want to get the read on something else that's not enjoying a happy reception on wall street, tesla announcing it will be cutting 7% of its work force. susan li has been following that. the company is worried about special tax credits you get that will expire later this year, right? susan: that's right. $7500 in tax credits that will expire once you hit the 250,000 vehicles sold cap which is what tesla has already done. yes, tesla reducing its work force by 7%. let's take a look at the memo elon musk, ceo/founder of tesla, sent at 1:00 a.m. last night. he says we unfortunately have no choice but to reduce full-time employee head count by approximately 7% and it's to retain only the most critical temps and contract workers. this is for higher volume and

manufacturing design needs for the model 3 production, as they need to boost that heading into 2019 and beyond. now, this comes on top of the june cuts of 9% of its work force. in all, tesla employs around 49,000, including temporary workers and contractors, but this is about the model 3 which they recently only ramped up to 5,000 a week. this was crucial for the markets, for the company, really, as you heard elon musk in that "60 minutes" interview saying they were at single digits weeks of survival in terms of cash burn to get the model 3 production up. so i guess this is what the ideal logically wanted was the car at $35,000. the least expensive version they had been selling was $44,000 but the average selling price of the model 3s in the third quarter have been at $59,000. if you take away that $7500 tax credit, that makes it even more expensive, more expensive than, say, the bmw 3 series and other luxury cars, especially as other car names are trying to get into

the electric car space, namely audi and the like and also gm and the entrenched players, as elon musk likes to call them. let's take a look at profitability because elon musk referred to this in his memo last night as well, saying q3, the third quarter profit was really a highlight, a milestone for the company in its 15 years. they actually made money, $311. only the second profit in the entire car company's history. yes, so this is something they want to build on, especially if they have to make that convertible bond payout, by the way, that they might have to make in march of next year. if they don't hit that strike price of $359 per share. i'm sure that's probably in the back of his mind, cash burn and the like. neil: you know what's weird about the tax credits, they were going to people who were able to afford this car and happy to do so. susan: yeah. neil: they were pretty wealthy. they didn't really need that. susan: that's right. we were looking at the average income of those that actually drive teslas. they make a lot of money, $200,000 plus up to $300,000

level. can i just say, there's nothing wrong with being a geek. i love being a geek. don't you? neil: you're not a geek. susan: yes, i am. neil: you're trying to make me feel okay about being a geek but you're not. i embrace my dullness. i like being dull. i built a career on it. susan, thank you. very, very good report. we will follow that. we are also following this big storm coming. you don't have to be a geek. you still slip on the same ice, don't you? as a fitness junkie, i customize everything - bike, wheels, saddle. that's why i switched to liberty mutual. they customized my insurance, so i only pay for what i need. i insured my car, and my bike. my calves are custom too, but i can't insure those... which is a crying shame. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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neil: all right. well, don't say we didn't warn you about this. the big storm that's coming our way, already is hitting a lot of folks out west, the midwest. it's going to be around awhile. it's going to, well, be a doozy. our chief meteorologist on this. it's coming to fruition. what are you looking at? >> well tell you what, it's not only the storm and the weather it's causing now but what this

storm means and last week's storm, the one from k.c. to d.c. means, it means this pattern is changing and changing dramatically. now, the storm that we are going to be seeing coming across tonight, tomorrow into sunday will leave a 6 to 12-inch swath of snow from dayton to just north of pittsburgh, then it begins to expand. i'm expecting snow and sleet to be spreading across pennsylvania by 1:00 into central pennsylvania, reaching the new york city area and the i-95 corridor by 7:00 p.m. but it looks to me that this is a lot like the november storm that we had, the early storm, where it snows hard for a little while and changes to rain in the big cities and on the coast, and i'm sure everybody will be more prepared for this than they were with the november storm, but what is different behind this storm is the intensity of the arctic air that pours in, so let's say you get three, five, six inches of snow and it gets slushy, it will freeze so fast it will make your eyes spin. temperatures could get close to

zero in new york city sunday night. that is a rare event. it's only happened ten times in 60 years that it's reached zero in new york city. this is because the air is coming directly out of eastern canada, something we call direct discharge of arctic air. it's not coming across the great lakes. it's not coming from the west, it's coming straight in after the storm from the north. so what happens is, you're going to have dangerous wind chills in the areas that get hit by the snow, and in the areas that are snow, sleet, freezing rain to rain, the flash freeze occurs right after it. as i mentioned before, this is the beginning of what i think will be one of the top five coldest periods, january 15th to march 14th, of the last 30 years in the united states and europe together. i think this is going to put a tremendous demand on the economy overall because i believe that the type of cold and the reversal we are having is about as dramatic as you are going to see.

now, it's happened before where we've had warm winters until mid-january and it turns around. 1966, for instance, d.c. did not have a flake of snow until the 20th and when it came in, they were closed, not the government, but january 31st, the mid-atlantic states were closed. so we are going to see a dramatic reversal, what this storm and the storm last week is showing you is that this winter means business and it's coming full blast probably right into march for much of the country. neil: thank you very, very much. always good talking to you. joe bastardi, weatherbell analytics chief forecaster saw this storm coming and as he indicated, it's going to have a huge impact from coast to coast which is the name of our show. that's kind of weird. more after this. ♪ ♪

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neil: you know, there is a shutdown effect on the markets. i know we sort of dismiss it as they are ignoring the shutdown but there's reason to believe the federal reserve is saying

that makes it less likely we will hike rates anyway as if that was a threat long before the shutdown started 28 days ago. but a number of governors echoed that sentiment. to moody's capital markets chief economist, john lonski. what do you make of that? >> well, i think if the government shutdown succeeds at materially slowing the u.s. economy, makes a rate hike less likely. that being said, however, the fed is also looking at the behavior of the equity market and since the government shutdown, the market value of u.s. common stock is up by more than 11% and perhaps that's increasing the likelihood of a fed rate hike, not in the first half but later this year. in fact, fed funds futures, the probability that fed funds futures assigns to a rate hike has increased from something like 20% not too long ago to a number approaching 30% this

afternoon. neil: is that right? i didn't know that. let me get your sense, then, about the shutdown's effect. like hurricanes are major storms that buffet the economy in the affected region, normally it works itself out, not easily, for the people affected. i don't want to minimize it. but whatever is taken out of the economy is put back in to rebuilding or people getting back to work, spending money again, and it sort of is a wash. what do you think is going to happen here? >> well, you know, these are hardly normal times politically speaking. neil: very true. >> the two sides seem to be so far apart. there is no telling how long this shutdown might last. some are now making the claim, perhaps it's a reasonable claim, that if this shutdown lasts through the entire first quarter, we may see economic growth go from something like 4% in the third quarter to perhaps something approaching 0% in the first quarter.

some people do get hurt permanently by this. private sector contract workers don't necessarily regain the income that is lost. likewise, there are a number of businesses that depend on spending by government employees and that spending may not come back entirely, and there are side effects. on the mortgage market, it becomes now all the more difficult to have your fha type mortgage approved by the federal government. you lose a few home sales. i'm not about to go ahead and travel for leisure given the fact we have these long lines at airports because of a reduction in the number of tsa workers. neil: that's right. is there any sense that you have that the bond market is telling us something? i don't want to get into something -- the fact interest rates have remained low, i know we just hit a high for the month here, but we are still very, very low. the gap between really

short-term rates that the fed controls and the market rates is now precipitously up and i'm wondering if that's telegraphing something. what do you think? >> i think it's telegraphing slower growth ahead, even after government operations are restored. we also want to consider, however, what's going on in the high yield bond market. all the while, quietly, we have had quite a rally in high yield bonds, a narrowing of spreads, despite the fact that moody's investor service predicts a bottom for the high yield default rate come this spring, but then a rise by the high yield default rate through the end of the year, who knows, into 2020. the bond market's skittish about the outlook for the economy, the treasury bond market is, and it's responding to expectations of slower earnings growth in 2019 and a further deceleration by corporate earnings in 2020.

where does all this end? that's my question. if we continue to see the economy slow, profits slow, default rate move higher, well, that leads us to only one place, and that place is the nasty place of recession. neil: wow. i hope you're wrong on that, as much as i respect and love you. john lonski, thank you very, very much. have a good weekend. be safe. >> you, too. neil: you wouldn't notice this concern in ports across the country. they are as busy as ever. hillary vaughn at the port of los angeles with the proof. reporter: the port of l.a. is the fastest route between the interior u.s. and asia so they really are on the front lines of this tariff fight, the trade war between washington and beijing means retailers are rushing to ship orders from china to get ahead of what could be the next round of new and higher tariffs. this port just wrapped up a record year for shipments in and out of its docks. they moved more cargo in 2018 than any other year in the past

century, 9.4 million teus just last month. they saw over 15% surges from comparing that to december 2017 and the port of l.a. says this surge in imports coming from china is really causing a logistical nightmare here. there isn't enough space to put all the containers here in the san pedro port and that's caution a b causing a bit of a problem. >> what we have seen with surges in cargo is not only do we see an imbalance of trade, meaning more cargo coming in than is being exported right now, we also see the asset providers like the railroads having to do double time work to try to get their crews, engine power and assets in place to handle these surges. reporter: tafrs ariffs are caus lot of traffic in the sea lanes but the containers coming in full don't match the containers going out full. they see a discrepancy in chinese imports to exports. at the port in long beach they shipped out 186,000 empty

containers, neil. neil: thank you very, very much. forget about the battle over the shutdown. right now there's a battle within the democratic party as to what it wants to be, after this. i've got to tell you something important. it's not going to be easy. quicksilver earns you unlimited 1.5% cash back on every purchase, everywhere. actually, that's super easy. my bad.

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neil: all right.

there is a fight erupting within the democratic party? obviously a lot of appeal around alexandria ocasio-cortez and her role at playing sort of the pulse of the party with calls for higher taxes, her call for a 70% top rate is not really indicative of everyone in the party, although they have looked for, including the guy who is now running the house budget committee, to increase taxes on corporations. in other words, the dna of the party is going back to its roots and some fear maybe alienating folks in the process. democratic strategist rochelle ritchie and mark goldblum. welcome to both of you. the first thing i want to get a sense is who is the party? in other words, you know, i know the new york congresswoman is a lightning rod for controversy and passion and that's all fine, but does she represent the future of the party, in your eyes? >> i don't think she represents the future of the party.

in fact, i think the fact that they are trying to attempt to sort of infiltrate the democratic party with very far left socialist ideas is not going to bode well in their favor and i think that we really need to be focusing on the 2020 election and not dividing our party, and i know that ocasio-cortez is getting a lot of attention right now because she's the youngest woman elected to congress and she unseated joe crowley but at the same time she has not really done anything quite yet. it's one thing to talk but it's one thing to do the work. i have not seen that come from her. so i would not consider her the face of the new party. i think that she's just getting a lot of media attention right now and i'm not sure if that's really warranted when nothing has really been done. neil: she got the highest ratings in c-span history for a speech before the house floor yesterday so something is afoot there. mark, whether you buy her solutions, higher taxes or more social spending or you know, republicans and their penchant for spending on things they

like, both parties have driven us into record deficits and ever-climbing debt, so i'm wondering in this battle, for example, a wall and funding for a wall, when i keep hearing people say it's one tenth of 1%, it's a rounding error on spending we have now, that might be well and true but the more you dismiss billions of dollars, the more you keep spending trillions of them. >> yeah, look, neil, both parties are out of control right now when it comes to spending. last year, the president signed a huge $150 billion a year spending increase and now we have some in the democratic party talking about trillions or tens of trillions of dollars of new policies. it's going to be hard to afford any of this with substantial new taxes, and impossible if we decide we are just going to borrow. neil: we keep robbing peter to pay paul to keep it going in emergency funding and all that. i guess the question i have is when is someone going to get serious about this? already we are well into the 2020 presidential campaign

season, a name a day seems to come up vying for that office, and in that environment, you know, preaching tough love and talking about getting spending under control, entitlement reform, maybe not increasing so much in defense each year and every year, that already sets you up to be knocked down. >> yeah. the spending obviously has to get under control on both sides and it's sort of weird to be on the side of the left and we are talking about being fiscally responsible more than what we're seeing right now come from the right. but i think that we have to get the spending under control and in your intro you were talking about this idea of the 70% taxes on the first $10 million of the rich. that's a socialist idea and i know that a lot of these far left progressives like to use sweden as an example when it comes to socialism, and sweden is not a socialist country. socialism is not school choice. that's what they have in sweden. socialism is not privatizing

social security. that's what they have in sweden. it's not having minimum wage laws and that's what they have in sweden. so i think these progressives and these far left folks are really cherry-picking what they want to call socialism and what's not, and then they use these countries and what's happened over there as an example, and it is not really a true reflection of what socialism is. i think that a lot of these freshman members, particularly with ocasio-cortez, i think that she's not going to do herself that many favors because think about this. when you go to congress and you present a bill, it is the members in your party voting on the bill, not the american people, not the people that are following you. if you have the enemies within your own party, you are not going to get anything done for the people that voted for you. neil: you're right about that. but you know, marc, maybe i'm just being naive here but i think the american people are very smart. they are much more pragmatic than we give them credit for. i hear from those with

never-trumper remarks, all those, whatever, but i think most people, you spell it out for them this is unsustainable, this amount of spending, whether it be for social related programs or defense related, it simply cannot be maintained. you cannot year in and year out spend $1 trillion more than you're taking in. it's not doable. now, we can print all the money we want but eventually then, we become a third world country and we get threats like we do from investors talking about knocking down our aaa credit rating which frankly, we don't deserve. i wonder how difficult it would be for a brave candidate to come forward and say look, here's a chart, here's how much we're taking in, here's how much is going out, we can't keep doing this. so why can't a politician respectful of the american people and their intelligence, left or right, do that? >> well, nothing would make me happier than a president of the united states putting power point charts up to show people our unsustainable debt. i have many charts for that president. neil: i bet you do.

>> i think what we need is real presidential leadership here. the american people are smart enough. you level with them, they understand we are going to have trillion dollar deficits this year. we may be at $2 trillion deficits within a decade and our debt is as high as any point in history besides world war ii. the american people, it's sort of a game of musical chairs. no one wants to be the last one standing but politicians keep telling them don't worry, there's more music left to play. neil: yeah. you've got to be willing to say i'm going to get defeated for saying this, but you know what, i don't think you will be. i really don't think you will be. we'll see. we'll see. guys, thank you both very, very much. meantime, let's take a look at the corner of wall and broad. stocks up about 306 points. looks like everybody but disney and pfizer are up on the day. they are only nominally down. but this is continuing the best start of the year we've had since 1987. i know what you're going to say. i know how we ended that year. i'm just saying it's the best start since 1987.

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>> what i have suggested is, if they're serious about it, they do run the house, they won't let the president come, i think senate should offer to have the state of the union there. neil: go to other end of the capitol, have it there. it would be a smaller venue. issues here. parliament debating on brexit next steps on january 29th.

former u.s. ambassador to the eu under president obama, anthony gardner. good to have you. what happens now? >> fog has truly descended on the uk. on monday the prime minister will present her plan b and i hope she makes the opportunity to lift some of that going to make two unequivocal statements. one the uk should not crash out without a deal, because the uk is not prepared in terms of infrastructure, domestic legislation and free-trade agreements that should be in place but aren't. the second she would request an extension of the article 50 process long enough, by many months in necessary toe determine what the uk really wants. that is the nub of the problem, neil, is that the uk spent more time negotiating with itself is than it has with the eu the eu is waiting for a clear statement what it wants. the eu recently said we're

prepared to move if you show also movement on your red lines it set forth a couple months ago. neil: it is interesting, ambassador, i don't know whether it is subterfuge, you almost get the sense europeans are enjoying disarray in britain and keeping theresa may on the spit, just turning and turning. many brits told me over the course of the we should have cut bait after the vote, we could have settled it a lot of this. what do you think of that? >> i disagree entirely with that i spent time in brussels two or three weeks, member-states are not enjoying this. for many reasons, first, most if not all the eu members regret the decision about the uk leaving t didn't try to stick the knife into the uk's back but it has been very frustrated as it sees inability to be clear what it really wants. does it want a customs union? no, it does not. does it have norway type option?

no, integration with single market. comprehensive trade agreement with canada with some pluses or they have with the ukraine or different models? it is not clear. so i don't accept the premise what you said. a crashout of cutting the nod as you said would be bad for the eu, let's be very clear about it t would cause significant uncertainty for businesses in the eu. neil: a lot of people in eu are wondering, i should say in britain, ambassador, a lot of problems european members have, germany a slow down, italy a mess, portugal much better, greece in and out of trouble depending on the day, a club they don't want to be in. what do you make of that? >> sure the eu is not looking great right now but uk will find out it is better to be a member than a non-member. part of the problem problem the uk had during years of membership it tried to have benefit of membership and having

benefits of non-membership. now it wants to be out with benefits of being in. if you're following me. the challenges world faces whether its russia, china, or trade, there are a lot of advantage to being a member of this club, and this is the key reason, but many of them, the key is the eu has greater leverage than the uk being single member outside on some things i saw. the eu still is a relevant member of the international scene. look, just on sanctions, the eu was able to work with the united states and actually bringing putting penalties on russia after the invasion of crimea. same thing with iran. we wouldn't have been able to put sanctions on iran if we haven't been working together. on trade u has so much more leverage with china and other countries. the uk will find it is a colder place in the world outside of

the eu. neil: we shall see. ambassador thank you very much for your time and service to the country. we appreciate that. all right. we also appreciate charles payne, hard-est working man in showbusiness. i think this is the 43rd hour. charles, what have you got if. charles: as long as market is up, i get extra adrenaline. i will be okay for the next hour. neil: i'm that way with lunch. charles: see you ben soon, i'm sure. neil: thank you, my friend. >> this is charles payne. this is "making money." we have a solid triple-digit rally. optimism over a trade deal, beijing reportedly offering major concessions while the treasury department denying it is considering lifting tariffs on chinese goods. investors sense something might be happening, might be around the corner. will wall street be right? alexandria ocasio-cortez first house speech on the floor makes c-span history,s