the last of this. ashley: wasn't it 600 and -- stuart: 750 clients. it. ashley: there is long way to go. stuart: a lot more to come. connell: in connell mcshane in for neil cavuto. connell: i'm connell mcshane filling in for neil. we had a little bit after disappointing day on services. stocks came down. overall things are looking pretty good to stuart's point on back of chinese trade talks. here is the big story of the day. it is the moment that wall street has been waiting on. trade talks being back on, staying on. one estimate out there, say as deal with china at this point is 90% done. even if that is true, that last 10% can be a heavy lift. let's get latest on all of this.

edward lawrence has been all over it. mess comfortable position in washington, standing outside of u.s. trade representatives office. hey, head ward. reporter: some would disagree. literally good signs. this is the ninth round of face-to-face talks between the u.s. an china. look at this. u.s. trade representative robert lighthizer greeted. liu he. the meeting started two hours ago. they're getting ready to break for lunch. the sticking point seems to be the mechanism of enforcement. the chinese want tariffs gone forever. the u.s. wants to impose tariffs if china falls through with this agreement. >> the president is a tough negotiator. he knows enforcement ultimately is the most important sticking

point. because china has cheated on previous deals. they go around it. tough make sure whatever agreement in place has to be enforceable. they're working on it. i'm encouraged they are working on it. i would like to see it addressed. reporter: there is also support from democrats in congress who think the u.s. needs to be tough on china, make sure they follow through with this agreement. now yesterday, an official from the u.s. chamber of commerce says this agreement is about 90% finished. that 10% to go may be the smiles. a food sign. connell? connell: interesting you point out the body language. the last 10% could be trickery otherwise they could figure out this stuff. reporter: we're next to a manhole cover. that is why is teams i'm in a cloud. the steam blows our way. that last 10% is the very hard to get. there the canadians ended up

signing on literally at the 11th hour the day before it was due. that last mile is very, very tricky. as the u.s. trade representative says the deal is not done until all the deal is done. connell: producer ralph got in my ear that things might be picking up steam. arguably the worst joke i ever heard. there it is. i thought i would pass that along. edward, good reporting as always. let's get to point bridge capital founder hal lambert. hal, the idea of a dealing done, that -- a deal being done, that down necessarily solve all our problems. there might be a tariff in place when we work all this out. what is your read? >> 90 percent of the deal done doesn't mean a lot. technically we have a trade deal with china. it is called the wto. it hasn't worked because the enforcement mechanism doesn't work. it is very caterpillarric. it is difficult to make a

complain with the wto. the wto agreement largely will be in this agreement. neil: i always thought it is funny the way they're talking about this we want tariffs we can either leave in place after the deal is done and you know, the china is just going to be okay with that? or if we take them off we can put them back on. they can't retaliate, somehow would be signing on to that. i wonder if that will really happen? >> it will be interesting to see if it does happen. that is obviously the sticking point. we want to be able to put unilateral tariffs on them if they break the rules. guess what, i think that is great and will be helpful. a lot of companies in the s&p 500 source products in china or suppliers that source products in china. they would walk in one day, have 60% gross margin on monday and have a zero gross margin on tuesday we had to put tariffs because china is not following the agreement. how do you plan for that if you're a company in the s&p 500.

that means you will have to sources ultimately not from china. that will be good for companies, not good for china. connell: i hadn't necessarily thought of it in those exact terms. but i assume china has, right? i assume china sees it that way, they would be reluctant to sign on to this stuff. their economy is struggling to some degree. whatever the manufacturing number, they would know that, right? i would think they question signing on to a deal if you're right, is not so hot for them? >> i mean it is going to be tough on them. obviously the chamber of commerce here knows it. they have been involved with the negotiations. it is certainly known, if there is risk, tariffs could be unilaterally put on, my gross march begins drop. i have to do something different. this is broader than just the trade deficit, right? connell: oh, yeah. >> this is about global economic

power is a big part of this. military power. a lot of theft that has gone on is used for military advancement in china. the trump administration notion that. they're on it. that is what will we do with a military power using trade secrets to advance their military? this is a big deal and a long-term problem we'll be facing. connell: trade deficit may be the least most important thing. you refer to huawei and all that kind of stuff when you bring up that kind of stuff? >> sure there is huawei. we sent last month a destroyer through the straits of taiwan that the chinese view as provocative. i don't know if you saw this the trump administration looks like they will approve sale of f-16s to taiwan, which hasn't been done since 1992. there are things we're doing to push back on china which hasn't been done in many, many years. connell: bottom line a little optimism in markets.

hal's warning what we wish for or might end up w thank you for coming on. >> thank you. connell: the other big thing of course, get back to talking about this, the battle over the border with president trump threat of closing at least sections of the southern border of the united states if congress doesn't take action. the homeland security secretary kirstjen nielsen is heading to the el paso area at some point today. she is talking about the crisis. using severe terminology, pretty much like a cat-5 hurricane. federation for american immigration reform president dan stein is with us now and, it has been, i brought this up earlier in the week, dan, getting more agreement that this is a crisis, the deal and how to deal with it. that's still the big debate, but tell us what you're seeing down there? do you agree with that, that more people are coming around on it? >> i mean trump doesn't lie and congress won't comply, no question about it, we have a crisis on the border, not just

because the apprehensions are up back to historic levels but the nature of the flow is changed and we see massive crime, illegal fraud. this is asylum fraud on massive organized trafficking scale. trump needs to get congress to pass a tightly-crafted. get mcconnell bring up three paragraphs, change asylum law, send to it the house. get discharge petition. 30 democrats to sign, all republicans to the floor. without congress to actually change the law, traffickers and smugglers will continue to do this by the hundreds of thousands for the rest of the year. connell: there are a couple other questions that come up. one is obviously economic we should talk about. the other is humanitarian, how we deal with that particular part of the crisis now. so what has to be done? the second live branch i assume with kirstjen nielsen boeing down there can deal with a lot of that, the humanitarian side which is real? >> with the problem not being able to interdict and cosh the

flow, the people are basically admitted, they need medical treatment. many have infections and contagious diseases. president needs to close certain points of entry, personnel need to be deployed to get people medical attention. there are court records that require people to release they will disappear, everybody knows never to be heard from again. none of this has to happen if you have a congress that functions. a dysfunctional congress in the face of an uncontrolled mass migration surge is a bonafide national security threat. we don't know who many of these folks are, can't verify their identity. many children are being recycled put in harm's way. this is catastrophic humanitarian disaster we as a country helped create. connell: president tries to put focus on that this week, his goal to get people in the media talking about it, put pressure on congress to act in the way you're talking about, i'm sure that is what he is trying to do. he threatened to chose the

southern border. you said portions of the border might close of the most of the economic analysis the president himself conceded this yesterday, if you close down the entire border it will hit our own economy and hit it pretty hard. the chamber of commerce said $1.7 billion of trade per day, united states and mexico. one of the things they talked about, maybe we'll leave the truck lanes open. almost 70% of the freight coming in is coming in via truck. so maybe they do that, close other portions? what do you make of that might play out? >> the president is trying to increase leverage on the mexican government to control its southern border. why this great powerful nation of ours should have to rely on mexico to stop the flow of people coming across illegally through mexico, crashing our borders is anybody's guess but because we have to change the asylum laws, change detention law, congress won't act, the president is trying to use every single tool in his tool book. after call dose are great. that couldn't mean we have to

have avocados every day. if the mexican government won't listen any other way, what will you do. connell: there is estimate that the auto industry would be in big trouble in a week. >> no question about it, probably would hurt the u.s. economy and the mexican economy. what the president is saying i'm commander-in-chief, i have responsibility to protect the american people. with absence is of help from congress, to increase leverage from allies and central american governments to do more to stop this organized trafficking and smuggling. connell: he said he would be willing to take an economic hit. good analysis, dan stein. thanks for coming on. this is a story that developed throughout the day. new worries about e-cigarette use, the fda is out with a statement that it is looking into reports there may be, may be a link between people using e-cigarettes and having seizures. we'll get into that. we'll tell you what is in that report from the fda. that is coming up. as we watch the market, we're up

nearly 100 points on the dow. we'll see "after the bell." art laffer is among those that join us, melissa francis and i 4:00 p.m. eastern on fox business. we will be back here on "cavuto: coast to coast". i'm working to keep the fire going for another 150 years. ♪ to inspire confidence through style. ♪

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connell: the fight over the mueller report is escalating in washington. house judiciary committee voted to issue new subpoenas for the full unreacted report. chairman of the committee addressing that situation a little earlier on. >> those judgments must be made by congress, not political appointee, the attorney general. we need this information to make those judgments. the interests can be protected by this congress deciding which, which of that information can be

released publicly but congress is entitled to all of it. connell: so we're trying to figure out what wall street maybe can expect from the ongoing battle. that is what we expect it to be an ongoing battle. former doj deputy director of under president trump ian pryor unions joins us now. how long do you think this will drag on? >> this will drag on a long time. what judiciary democrats are trying to do is two things. creating a narrative because barr won't release the full report without redactions because there must be something to hide. the real reason because laws are in place that require grand jury material to be removed, classified information be removed. nadler knows this he is trying to create a misleading game. more importantly for nadler's purpose, democrats were woefully disappointed with the mueller investigation. what they want to do use their power as overseers of the justice department,

congressional oversight, to get a peek into the criminal investigation, to use homework from mueller to do their own investigation. despite what he says they're not entitled to that information. connell: congress isn't? >> correct. connell: you heard his argument, hey, listen, maybe not the public gets to see everything i get it, some of it has to be redacted for reasons you talked about, but congress should. why aren't they entitled? >> so another point in one of his interviews he cited the ken starr investigation. the history lesson is important to the whole debate because in the '90s and '80s, it was independent counsel statute really allowed congress to see the reports, independent counsel had to provide a report and the documents to congress. that was in the statute. that no longer exists. what you have are special counsel regulations which it is a solely a function of the executive branch. all barr had to do was tell congress that the investigation had concluded. he didn't have to provide a summary. didn't have to provide a report. connell: that is an interesting

point. some people may know it already, it deserves to be driven home the point a difference, comparisons to what jerry nadler said in the '90s, versus what he is saying now, the starr report being made public. your point that was completely different, because that report had to go to the congress where this report didn't. it went to the attorney general. under this particular statute, first time we had a high-profile special counsel, right? correct me if i'm wrong. this leaves a lot of latitude with the attorney general? >> absolutely. the attorney general does not have to do anything. what he has done right off the bat, he sends a letter, he explains, one i didn't overrule, nobody overruled any of mueller's requests. two, i will provide you a summary of top lines this weekend which he didn't have to do. he did that to inform the public. he also said he will provide the report. there will be redactions but he is going above and beyond what is required of him in the regulations. i sense that obviously nadler and judiciary dems are trying to

drag this out as long as they can because they want another shot at the investigation that didn't go the way they hoped it would. connell: there aren't from what i understand, wrap this up, there weren't a ton of requirements he had to do. if there was recommendation to indict, say, for example, he was going against that, then he had to tell the congress. that wasn't obviously in there. ian is right, he went above and beyond that was required. thank you, appreciate you talking to us. >> thanks for having me. connell: let's move up to boston. we can't really stop thinking about this story. it is crazy at so many levels, the college admissions scandal. today a lot of high-profile names are involved. the actress, felicity huffman, for example, arriving in a boston courtroom where she is facing charges. other parents are coming as well. molly line in fox news up in boss at courthouse with details. hey, molly. reporter: hi, connell. most recognizable faces

embroiled in the college admissions scandal are here. including felicity huffman. she already come through, she is in the courthouse now. cameras, a lot of cameras, still keeping a lookout for lori loughlin as well as her husband, mossimo gianulli, the fashion designer. the court hearing for 2:30. later on in the afternoon for some other parents. they're accused of same thing, paying bribes through the mastermind of this scheme, william singer, with the effort, the plan to get their children, their sons or daughters into the elite college or university of their choice. felicity huffman arriving a little after 11:00 in the morning at courthouse. they allege she and her husband, the actor william macy made a 15,000-dollar contribution to singer's phony foundation. to participate in the entrance exam cheating scheme. they received a letter from the fake charity, false aproviding

self-enrichment programs to disadvantaged youth. huffman making aroundments to use the scheme to aid a younger daughter. ultimately decided not to. all the parents facing conspiracy to commit mail fraud. loughlin and gianulli accused of pay $5 million as making their daughters on the crew team even though they didn't actually. conversation with gianulli planning to describe bribe money as charitable donation. a little later on this afternoon, some. first parents to be indicted by a grand jury in this case will also go before the judge. a couple nicole burns, amy and gregory from palo alto, california. gregory is a physician. in addition to the mail fraud charges they are facing charges of money laundering, conspiracy. prosecutors allege the couple used the scheme essentially, cheating route of the scheme,

exam cheating route paying stock value 24,000-dollars to singer's phony foundation. one of the interesting things about their lawyers put out a statement the colburn's have done nothing wrong. they will seek a speedy trial to clear their names through their counsel. connell. connell: molly, any indication of counselors will push for jail time, serious jail time for some of these parents? reporter: they haven't given an indication of that. they have made clear, essentially on these charges that people are facing up to 20 years. so, you know, it is interesting to see what will happen even in the next week. there is a grand jury that is still working and this is an investigation that is ongoing. so that initial set of parents that have been indicted and choosing to go to trial, that will certainly be something to watch. connell: we're curious whether they can cut deals or whether some of these people actually spend time behind bars. thanks, molly line up in boston.

we have former prosecutor on this story the next hour. we'll stay on it. meantime venezuela, the venezuela opposition leader juan guaido fearing being abducted by government agents and the u.s. is now considering its next moves. that's coming up.

connell: breaking news in washington. liu he, the chinese chief trade negotiator leaving the u.s. trade representatives office in the motorcade. we understand they're taking a break from lunch. they started at 9:30. taking a break to keep on going. positive reports out of edward lawrence, others there at the trade rep's office. we are up. national economic council director larry kudlow talking about a new energy executive order that could be coming soon. here he is. >> there is an executive order

that will be unveiled in due course, that will try to help out our energy revolution and will open the door to additional pipelines. connell: additional pipelines. okay, so that gives us an excuse along with a little fluctuation in the oil price today, to bring in the traveling road show that is jeff flock and phil flynn together on the trading floor in chicago. there they are. take it away, mr. flock. reporter: good time to argue with phil. we'll argue about pipelines. >> yeah. reporter: governor cuomo in new york wanted to block natural gas pipelines. >> he did, supposedly for the environment but what he doesn't realize he is hurting the global environment. reporter: how so? >> consider this, the united states is only major industrial i'ded country in the universe lowered greenhouse gas emissions. every other country increased theirs. you know why that is because we produce a lot of natural gas. if we want to save the world to

greenhouse gas to china, we need more pipelines. reporter: are they not concerned about pipelines? not in my backyard? >> that is an issue. we're not getting oil from venezuela. we have got gasoline prices going up f we built the keystone pipeline, that would not be happening. we could get heavy oil down from canada. that would replace the venezuelan oil. reporter: gas prices, they were hire than a week ago, a year ago, a month ago. we're on upward climb towards $3. >> we are. we will gone up seven weeks in a row. we'll not probably stop until the memorial day weekend. buckle up. it will be an incredible ride. reporter: you don't care, connell. you live in a city. you don't need a car. connell: i maybe shouldn't disclose, i live in the suburbs. reporter: i'm not coming to town. connell: there are number of reasons. i love having you on together.

there is money to be made. we come up with a show we can do. thanks, guys. reporter: flock and flynn. i love it. connell: flock and flynn. phil mentioned venezuela. oil-rich nation but of course the trouble there continues. we have more developments today with allies of nicolas maduro, stripping the self-proclaim interim president juan guaido of his immunity. guaido reportedly fearing he will be arrested at any point. that obviously complicates things a bit. worse, you have the humanitarian situation that has been getting worse. you have millions of people with no water. as we wait to see what will actually happen in venezuela. former national security advisor to vice president cheney joins us john hannah. what do you think president trump will do now? what do you think? >> i think the administration is in increasingly difficult position. expectations were raised back in january and february that maduro's regime was not long for

this world. here we are several months later and he is now testing the waters whether he can wrap up the leader of the opposition, the person that we have recognized as the legitimate leader of of venezuela, breaking the back of the opposition. connell: yeah. >> so, the administration has kind of indicated this could be a red line for it but it really doesn't have a lot of great options to respond. connell: that is the thing. every time president trump is asked about this, some cases it is vice president pence, the question comes up, is the military option a real one? is it really on the table? is it your sense at some point it will actually come to that or? >> i think, you know it is possible to imagine circumstances that would -- could happen, primarily countries in the region like colombia, brazil, some of our other latin american partners, would get together, decide an

intervention is necessary for the peace and security of the region and ask the united states to assist that. but otherwise unilateral u.s. intervention military, given our history in latin america is just an option we really don't want to exercise except in extremist. connell: nothing moving fast down there. john hannah. we'll get to the story coming up surrounding e-cigarettes with health officials investigating the possible link between vaping and seizures. we'll reveal a new warning that just came out. (nat♪re sounds)

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connell: this is a story we're going to follow. the fda put out a statement saying it is investigating at least the possibility there is some sort of a link between people having seizures and using e-cigarettes. kristina partsinevelos is looking into it.

what is the deal? reporter: food and drug administration is saying possibly three dozen cases of seizures that occurred after vaping. they are requesting people to come forward with any type of similar situation so they could further investigate this. but the announcement came today on capitol hill at a budget hearing. you had the outgoing fda chief scott gottlieb explaining his concern. >> products submitted to fda and poison control centers identified 35 reported cases of seizures following use of e-cigs between 2010 and 2019. we believe this forces further investigation. reporter: they include high doses of nicotine, out come of nicotine poison something seizures. there is possible link. the fda is trying to make sure there is not one yet, they're looking at it. there is no patterns in the 35 cases.

some people that are old, some people that are new, some are first-timers. others using drugs at the same time. we know vaping has skyrocketed amongst the youth. the latest statistic we found was from the fda. imagine parents listening right now, 21% of all high school students in the united states have used an e vaping type product of the agency, though, the fda, said they're not linking it to particular brand. i would like to point out in the past because i reported on this before, juule extremely popular company, are targeting addicts, former smokers give them healthier or not better al tern tough to smoking f there is any case with seizures. you can go online. the fda has a page, safety reporting portal. google that, you will find it. connell. connell: have to go slow on the story.

interesting they came out with a statement, not a lot of cases yet, 35. no link as kristina reported. we have a doctor coming in about the issues with e-cigarettes and vaping next hour. "wall street journal" has a story today saying president trump sold several, told federal reserve chairman jay powell i should say, this quote, said supposedly, said i guess i'm stuck with you. blaming the fed for drop in markets late last year. we bring in charlie gasparino on this, and maybe other new developments. >> e-cigarettes, 35 cases. connell: that's right. >> this is not like, how many people use it? connell: a lot much. that was my point. kristina pointed that out. they didn't establish the link yet. >> i would like the number of people that use it divide, very low. connell: they don't even know the two are linked.

jay powell, that sounds like one of cavuto's quote after your appearance. >> of course. he regrets that. connell: that is some quote. i guess i'm stuck with. >> you that is what you said to me as soon as i sat down. here is what i would say, there is more to the story. it is involving stephen moore's nomination to the fed board. connell: that has become controversial. >> let me unpack this. last night reading on my bar stool, of course, "the times" piece about steve moore, having these issues with his ex-wife. you can go back and read it. steve is a friend of mine. i'm not saying, i'm not drawing conclusions. connell: about alimony payments, correct? >> but i started making calls to conservatives, conservative activists, economists that i know in the conservative movement, supply-siders and they said this, they were saying two things, trump is still supporting him but two, they give it, his chance of getting

nominated -- connell: being confirmed to the federal reserve board of governors. >> 50/50 chance. >> which isn't great. >> three, they're worried about mitch mcconnell pulling the plug on it. they are worried about this. connell: why do you think the two stories are linked? >> one other thing. they're worried about him pulling the plug, so they will mobilize. there is some pressure put on. i would think you see guys like art laffer out there, my good friend larry kudlow. i know all these guys. connell: we have art on "after the bell." i will ask him about it. it is interesting you think they're linked? in other words the president is more likely to fight for moore because he doesn't like powell? >> i think so. that is the impression that the conservatives economists types, club for -- the clubs larry kudlow is part of. talk to david malpass. there is a whole crew of them. connell: right. >> they would say that president trump looks at steve moore as a counter weight to powell.

that you know, powell, i never thought jerome powell was a hawk. there were much more hawks up for that job. kevin warsh in particular. connell: that is the guy the president thinks he should have appointed. >> i don't know. he is more hawkish than powell. what i would say he is looking at now, is that steve moore is the counterweight to powell's hawkishers in. i think that the president will fight hard for him. connell: more likely to go to bat for him? >> i think so. the call will be made to connell. the conservatives, the supply side community will stand up for steve because steve has -- is, listen, people maybe mistakes, with stuff like alimony. steve is a good man. he has an established record. by the same if you're saying he made his takes in life or with economic, calling economic calls, tell me bernie sanders

never -- ben bernanke never made a mistake? tell me alan greenspan didn't set the scenes for the financial crisis? connell: i'm not saying, that is criticism, just his own personal financial dealings, he hasn't been a great economist, his calls have been wrong. >> larry summers when he was treasury secretary pushed through something that was known as glass-steagall, allowed big banks to merge with security firms. that is one reason we had a financial crisis. connell: how did that one work out? i get you. >> everybody makes mistakes. steve is a smart guy. he is a supply-sider and i think the supply side community, i think you should talk to laffer about this today. connell: he is on today. >> they are planning to rally behind him because they think that mcconnell is wishy-washy. connell: fair. we'll talk more about it later. thank you, charlie. have to run to the new tax plan coming out of one top democrat in the senate. maybe it signals what the

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connell: ron wyden, who is the top democrat on the senate tax writing committee has pitch ad new capital-gains tax. it would tax long-term investments as if they're income. now the thing we point out right away as we start talking about this, there is very little chance of this actually becoming law, especially anytime soon, but, if democrats were maybe to take over the senate the next election, certainly if they take over the white house, take it back, at that plans like this might gain a little steam, or certainly get more attention. so the question becomes, would it help, would it hurt the economy? independent women's forum patrice onwuka joins us. ted harvey. john, start with you on the democratic reason for bringing it up. is it as simple as that? i think this is fair to say this necessarily isn't going to be

law. >> america has a cash flow problem, billions of dollars more than we're actually bringing in in revenue. so we've got a debt of about $22 trillion a record debt that is only skyrocketed under this administration. so democrats are trying to come up with a solution to bring some sanity back, not only to the debt and deficit issue but also to our tax code so we're addressing issue of inequality. i should.out this wyden plan applies, to .1%, .1% of the americans. you literal hi have to make hundreds of millions of dollars a year have this affect you. connell: it wouldn't affect a lot of people, patrice, those type of plans, you polling is like that, four of us on the an nell, none of us i presume is making 100 million a year except ted, none of us are making 100 million a year, you ask us affecting people that make over that threshold, whatever it is, i'm all for that, but as soon as

you get something that actually affects you, you say no, no, i don't want it to happen. you can see why they talk about something like this, patrice, even though it is not going anywhere, what do you think? >> soak the rich tax scheme is really rich. not surprising the democrats are using this to fund their pipe dreams. my colleague talked about being fiscally conservative or responsible. look at spending in federal budget. most of that spending is untouched. looking at entitlements. democrats have not talked about reducing entitlements or dealing with them at all. they want to expand them. why not introduce a way to increase revenue, thinking the populist wave on both left and right would support that. i think it is dangerous how this could backfire on the economy, reducing amounts ever investment, reducing amounts of savings, slowing economic growth. connell: right. ted, it brings up, i don't know what you think about this, neil brings this up all the time, that nobody really seems to

really care about deficits anymore. it is hard to find certainly any republicans that want to do anything but cut taxes. to jon's earlier point you need to raise revenue. on other side it is spending issue. each party has sticking point it is not really willing to budge on, we never really move anywhere getting more fiscally sane, do we? >> what this is showing the left has insidious desire to continue to grow government. they will look at every single pot of money to do that, means going after who are the job creators in this economy. this really is a philosophical fight between job creators and those who want bigger government. and if you look at this deal, you say it is never going to pass but you look at what the democrats are doing with the green new deal. connell: that is not going anywhere. >> doing anything they can possibly do. throwing out this tax proposal which is the most outrageous thing you could possibly do, to push the narrative of greater,

bigger government, control over your lives. i don't think that is what the american people want. connell: sets the stage at 2020. he is laughing. i'm sure the word insidious made you laugh? >> whole thing makes me laugh. republican bogeyman. same tired talking points. >> it is reality, there is capitalism and socialism. you're pushing socialism. connell: now we're talking. [all talking at once] , make it quake jon, all four of us were talking at once. then patrice. >> republicans shouldn't be afraid of having a conversation. that is what a proposal is. they can certainly bring additional idea to the table. that is all we're talking about here. republicans shouldn't be so afraid of that. connell: what were you saying, patrice? >> a lot is meant to address income inequality. when we look at poor americans, working class americans, they may not be paying income taxes but paying payroll tax, a lot of that. i would love for my democratic

colleagues talk about what we do reducing payroll taxes. connell: reduce payroll taxes, is that your point to take on income inequality? that is the republican counter? >> i'm bringing this as argument to the table. we're discussing this issue. connell: jon? >> let's have it as part of the discussion, right? it is not a proposal that i agree with, but i'm behind having the discussion. but i will say again, the wyden proposal, just one of many, would actually only affect .1% of people. so this isn't like the big job creator we're talking about. connell: what about that argument, ted? why even propose it if it is not that big of a deal, ted what is your take? >> well, my take is that it is an effort to try to take money away from those actually creating jobs. you are incentivizing a system which is going to hurt future generations of workers. these are the guys who risk everything, that go out there to

invest their money to create wealth so they can create jobs. this proposal is going to do nothing but hurt those efforts to try to use the. connell: got to go, jon. >> rather than government doing it. >> talk to people about being hurt, ted, let's talk about the tax cuts that trump and republican congress passed -- >> look at all the jobs created. >> it is not trickling down to people. [all talking at once] connell: last question. that is will get you in trouble. don't ask the last question, they will never get out of in time. you will be in trouble. someone is in your ear, five seconds left. now three section. now we'll be right back. thanks, guys. ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature. ♪

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your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. connell: good to have you with us. i'm connell mcshane filling in for neil cavuto. we have a rally in stocks, fairly modest, 66 points on the dow even though the service industry number wasn't great

earlier. probably be up more if it wasn't for that. slowest pace of growth we have seen since august 2017. now, china trade talks seem to be playing a big role in things today which we'll talk about in detail in a few moments. lots of optimism around china trade. we are also getting new details on homeland security secretary kirstjen nielsen and her trip to the southern border today. she will visit the el paso port of entry. this comes as businesses are warning about the impact of a border shutdown if it comes to that. blake burman with the latest now from the white house. blake? reporter: -- via twitter and last night here in washington as well. the president appears to be shifting some of his frustrations, at least some of them, from the mexican government to the u.s. congress here at home. the president also saying at one point on twitter that he could shut down all or some of the southern border but over here at the white house, they are insisting that the president is not pulling back from his

threats. >> no. not at all. i think we are leaving all options on the table. i think that the democrats have left us with no choice but to have to redeploy our resources, our border patrol agents, from the ports of entry in between the ports of entry where we are seeing the surge of illegal aliens coming through the border. reporter: speaking of the ports of entry, the dhs secretary kirstjen nielsen will now be at the southern border for the upcoming few days at least. she will be in el paso, texas today, yuma, arizona tomorrow and will join the president in california on friday. she says the dhs is treating the border right now like they would a category 5 hurricane. back here in washington, the president's top economist larry kudlow saying today what we had reported on yesterday as well, connell, which is that the administration is looking into the possibility of keeping trucking lanes open if the president decides to shut down all or some of the southern

border, but kudlow also made clear that the details on this one still potentially need to be worked out. >> one area we've explored is to try to keep the freight lanes open, the truck lanes, and you know, i've talked to various officials in dhs and others who are more knowledgeable than i, and that is possible. reporter: now, you can also add that business roundtable to the list of those who are urging president trump not to close the southern border. they sent out a letter to top administration officials today which reads at one point quote, closing the border would back up thousands of trucks, impact billions of dollars of goods each day, cripple supply chains and stall u.s. manufacturing and business activity. we have heard a lot of this, bipartisan pushback but the white house maintaining that the threat is still very much in play from the president. connell: it's interesting because there's a huge difference, right, between just closing -- to your point about closing down the whole border,

and if you leave the lanes open that larry kudlow was talking about, that's how most of the goods come in. that's a huge, huge difference. reporter: when you look at the border, you have california, you know, texas, arizona, states and multiple ports of entry, when you look all across that map there. so the question is, would the president shut down some of it or all of it, and you know, the white house, i can tell you when i was making calls on this yesterday, they made it clear or at least made it clear to me that they are studying all the options but one of them is keeping trucking lanes open. but as you just heard from larry kudlow there, you know, details matter. it's not like they have some sort of game plan at the ready to sort of dust off and say all right, here's what we're going to do when we close the border. not like this happens often. connell: no. thank goodness. yeah, i think it's like 70% of the goods come in that way, something like that. reporter: a big number. connell: good to see you. thank you for that reporting at the white house. we want to bring in congressman

jim banks on this. congressman, i don't know if you heard the end of our discussion with blake and his reporting, but we are obviously focused at fox business on the economic concerns that people have if the president feels it's necessary to go through with something like this. what would you recommend, if you think -- you're the president, you think it's necessary to close down to make a point or negotiating, whatever the point is, close down part of the southern border, you go all the way or just close down part of it, leave the truck lanes open? >> well, it's really hard to say. we don't know what the president means by shutting down the border but i take this president at his word. you heard kellyanne conway say a couple days ago he's not bluffing. i don't think any of us on capitol hill or even in mexico think that this president is bluffing on potentially shutting down the border. it's a drastic action but this is a president who is not afraid to take drastic actions to accomplish something as significant as addressing the crisis at the border. connell: i think some in the market would have issue with that. i think there is a sense he's not serious about closing the

whole thing down. by the way, that doesn't mean investors are always right. i think there would be more concern building if they really thought he would do the whole border, that there's sort of a bet that if it comes to it, we will figure out a way for business to get done. what do you think ends up happening? think it's necessary to go that far with something like this or we have other options? >> you already hear the administration talking about what shutting down the border might be. it might not be all vehicles crossing the border. it might include trucks. at this point, we have no idea what this could potentially mean. at the end of the day, though, the united states chamber of commerce, other major business groups, as they made very clear, this would have a substantial impact on our economy. we can't dismiss that. i know the president isn't dismissing that as well. connell: no. the way he put it i believe was that, you know, national security's more important than trade, you know, when they asked him about it yesterday. on that point, what would you say? to what degree from people you have been talking to, numbers you have been looking at, is this a true crisis and what do you think needs to be done in

the very near future about that crisis? humanitarian and otherwise? >> there's no doubt about it that there's a crisis at the border, even as you have reported already, former secretary of homeland security even under president obama said there was a crisis at the border, humanitarian crisis, crisis in other ways. so we have to address it. no leader in america has ever been as serious at addressing the crisis at the border than president trump has and i appreciate that leadership. connell: doesn't seem like much is coming out where you are, though. doesn't seem like he's getting anywhere on capitol hill, right? >> i completely concur with that. that's the sad reality. congress could fix this issue once and for all right now if it would act. so far, in my two years and two months on capitol hill, congress has done far too little to address the crisis at the border. that puts president trump in the position that he's in, where he has to take drastic actions like declaring a national emergency, like even merely suggesting shutting down the border and whatever that means in some way.

this is a president who has been pushed into a position where he has to take drastic actions because congress has refused to do so. connell: congressman jim banks, republican from indiana, thank you. we appreciate it. the other story as i said at the top of the hour is the china trade negotiations. according to some reports, about 90% is done so that's one of these glass way more than half full stories, or is it that final 10% that will really be a problem? today there's optimism, no doubt about that. senior research fellow joins us, swiss america trading corp chairman craig smith is here. optimism, craig, on the tstock side is winning out today. it's great to say you are 90% of the way there, if that's even true, but in any kind of big negotiation it's the last 10% that can be tricky. >> sure. i think the biggest part of the last 10% is the enforcement mechanism. and our ability or being able to lay down the tariffs if they violate. i have no doubt in my mind that

we will see the chinese violate this agreement. you can take that to the bank. it's a question of do we have the enforcement and the mechanisms in place to punish them and make sure they come back into line when they do violate it. connell: you can correct mistakes and get back on track and that's what we need in these negotiations. colin to connell and we get negotiations figured out. the whole thing can be worked out. kidding around. verity, your take on this is what? because we have heard before that we are making a lot of progress but to craig's point on enforcement, it seems like what the united states is pushing for is something china might be reluctant to go with, that hey, you can leave these tariffs in place or more to the point, you can put the tariffs back in place and you guys can't retaliate, you guys being the chinese. i still keep finding it hard to believe that they will actually go for something like that. but who knows. we're not on the inside of the talks. >> i agree with you. first on the progress, right, it's hard to know, really, how

much progress was made. we have seen with the renegotiation of nafta that the final product wasn't as formative as the president hoped. here, thement is aski president for very hard things from china. they definitely will not want to deliver fully like on seizing industry subsidiesubsidies. as for the enforcement thing, i do hope that actually china prevails on this and those tariffs which are a burden on mostly american consumers and manufacturers in america who are importing a lot of imports from china and paying the cost, that these tariffs are lifted. that was the problem all along with the way the president went about this fight, by putting tariffs that hurt americans -- connell: he won't necessarily pull them back. >> exactly. connell: that's what usmca taught us, people sometimes forget about this, craig, but when they were negotiating this

new nafta, everybody -- not everybody, but a lot of people said as soon as they have a deal in place, the steel and aluminum tariffs will be rolled back but that hasn't happened. i don't know if that's the model or not. what do you think? >> no, you are exactly correct. we didn't see those rollbacks occur. i think, look, the president has made it clear, his weapon of choice is tariffs. so we're saying if we are going to enforce this, if you violate, we are going to come at you with mortar ie tariffs. connell: what if you leave some of them on? would you support that? >> in the first $250 billion he put on at 10%, i would agree. then once they prove that they were abiding by the agreement, then i would remove them. connell, we have to have something in place to make these guys play by the rules because they have a 50-year track record of cheating. connell: i get that part of it. i get that part of it. that's a good question. if it's not that, what is it? there does need to be some way of enforcing this.

>> there's no silver bullet. that's the reality. we are trying to pretend that there is, but there isn't. multilateral agreements are actually like tpp which again, weren't perfect. was the way to put a lot of pressure on china. whatever the administration says about the wto, actually the wto processes have a lot of effectiveness in getting china to comply. connell: what are you supposed to do, just trust them, you know? >> yeah. connell: trust the chinese, you're saying? >> no, no, you shouldn't trust the chinese. you should actually go at them with all the options that we have that are not punishing to american consumers. connell: such as? >> as i said, i said you actually build a coalition with other nations and you actually -- tpp was going to put tremendous pressure on china. connell: that ship has sailed, right? >> actually, other countries are moving forward with it. connell: from our involvement in it. >> you go through the wto, there's no silver bullet.

to try to pretend that we can or that tariffs are a burden on americans are the way to go -- connell: last word, craig. >> violations in the past have not been met with strong punishment. look -- connell: it's complicated. >> there's one thing i have to bring up. this is critical. i have heard very little about the whole issue of currency manipulation. if we get the best deal in the world and don't hold them accountable on currency, mark my words, the strategy will continue and they will continue to rip us off through devaluation of currency. connell: we will come back to all of this. we will stay on it, as a matter of fact, throughout the day but move on from now. good to see you both. thank you very much. the story we are moving on to, these hollywood stars heading to court today, the college admissions scandal. some parents reportedly are considering plea deals, with questions about whether the likes of felicity huffman could go to jail. our next guest says that may happen. we'll be right back.

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some material had to be redacted before it's released to the public to protect privacy, to protect the various rights, but the committee is entitled and must see all the material, and make judgments as to what can be redacted to the public release by ourselves. we're not willing to let the attorney general, who after all is a political appointee of the president, make that -- substitute his judgment for ours. connell: you saw jerry nadler there, the chairman. i recognize the man over his right shoulder writing as mr. nadler was speaking is fox news senior capitol hill producer chad pergram. it's been some day here. what's the latest? reporter: this escalates this

fight between the judiciary committee and the justice department over the release of this. keep in mind that they voted just to authorize subpoenas. they aren't actually sending them down to the justice department yet. jerry nadler says we need to get our hands on this and he will pull the trigger to send them down to the justice department if he doesn't get what he needs. it was a party line vote, 24-17. now, jerry nadler, as he indicated there, he wants the full report, no redaction. that doesn't mean they are going to release it to the public. he thinks that the committee should at least be able to see that. but if william barr, the attorney general, sends up a heavily redacted report, that's a problem and i posed that exact question to doug collins, republican from georgia. he's the top republican on the judiciary committee. listen. reporter: is there a problem for barr here if he sends up the report and it is heavily redacted and we understand why it may be heavily redacted, he looks like he's trying to hide something, therefore there might be an effort to put out some sort of amplified memo and

people say that's interpretation again? >> that's exactly the story line they are trying to play right now, if he sends something back other than what the actual regulation tells him to do, there's going to be this implication there was other things there. reporter: i'm going to read you a quote from jim jordan, republican of ohio. during the actual committee markup, he said quote, why are we here, it's because the mueller report isn't what you thought, meaning the democrats, and democrats sitting on the dais kind of scoffed and laughed. their implication is they don't have the entire report, they just have that memo that was sent to capitol hill a couple weeks ago that was very brief, it was an interpretation by the attorney general, and that's why they wants the final report. doug collins indicated we might be able to get that report perhaps as early as next week. connell: the answer to that question is interesting. the question is still a valid question. if it plays out the way you are suggesting it does, this thing could drag on forever and ever. the democrats could always come back and say hey, we never, you know, we didn't get what we asked for, who knows what's in that report. that kind of thing. reporter: that's right.

it could go to court, it could take awhile. i talked to a member who is pretty close to this process and they kind of delved into the conspirator yal miial mind of t american public. if they get a report with all these redactions, they will read into what's not there. that's why perhaps a more muscular memo that barr sets up that again could be his interpretation, but that's why people want to have the report. again, this is where republicans are turning this back around on jerry nadler and saying you voted against releasing the ken starr report that investigated the clintons, whitewater, the monica lewinsky scandal. why aren't these apples and oranges. jerry nadler says this is two different questions. there are 17 members of congress who are still serving who voted against -- 17 democrats who voted against releasing the starr report. eight of them are committee chairs including elijah cummings and also jerry nadler. connell: that's what happens, 20

years goes by. that's interesting. chad, thanks. chad pergram, great reporting from capitol hill. on the college admissions scandal, one of the things that's come up with the court appearances that are taking place today in boston is what will the penalty be, especially for some of the more high profile names involved, the likes of lori loughlin, felicity huffman. they are among 15 parents facing a judge today in boston. some of the parents supposedly are talking about plea deals. there has been suggestions that maybe they actually do end up doing some time, some time in prison. let's bring in former federal prosecutor fred tice on this. i know there are other questions about this story. but what about that one, whether some of these people, especially the high profile names we all recognize, to make an example of them or whatever you want to say, end up spending time in prison, what do you think happens? >> thanks for having me. there's a lot of things that could happen. you have to understand these are fraud allegations. their charge is basically mail fraud and theft of services. under the federal sentencing guidelines, the fraud

allegations are predicated on the amount of the fraud. so if you engage in a fraud to steal $10 million, your guidelines will be based upon $10 million. in this case, the question is what's the value. if i'm felicity huffman's lawyer i argue it was the 15 grand i promised to get my kid through an a.c.t. test. if i'm somebody else, if i'm the government, i'm arguing that the value to the defendants was the value of a college education at these kind of elite institutions and how much more earning power they would have. so at the end of the day, what some judge in the u.s. probation office is going to have to sift through is what's the value of the fraud. that sets the guidelines. connell: there's 70, 80 grand in tuition a year. if you go to yale or any of the schools, when you get out, you are likely to make a lot more money than if you went to some other school. that seems to be a pretty good argument. >> correct. connell: maybe jail time is a real possibility here for some of these people.

>> you know -- connell: they cut a deal. >> if they cut a deal, the reason is to get less jail time. under the federal sentencing guidelines -- connell: what do they have to offer at this point. >> that's the question. this is one of those frauds where all the little pieces of people who were part of the fraud. it's not like they can point at anybody. the guy singer already pled guilty. connell: you never know what they had to offer. they found this all out, some guy had some stock scheme. you never know. >> right. you never do. that's part of the job as a prosecutor is to figure out what they know. they may know all about kickbacks in hollywood and all this other stuff. who knows. i mean, part of me as a prosecutor, the kind of unbridled hubris these people represent, the feeling they are somehow above the law, sometimes it just kind of calls out for a jail term. connell: right. again, at the beginning i said that, make an example. a lot of people would look at this and know they were breaking the law, well, this is what

everybody does. it's not what everybody does. it's fraud. good to see you. in a moment, this mar-a-lago story, a lot of people are talking about this. it's crazy, this woman who apparently was able to get in past security and a couple passports, some malware she could have spread on a computer. anyway, the whole thing is getting rightfully so a lot of attention. we will talk about how big the problem is when we come back. [ sigh ] not gonna happen.

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connell: i bet you thought we forgot to talk about brexit today, didn't you? well, no fear. ashley webster is with us. apparently -- ashley: i don't know why i'm laughing. connell: is the no-deal option kind of gaining steam now? what's going on today? ashley: yes, despite everyone saying the last thing we want is a no deal, it's one of the last things remaining now. we did have somewhat of a historical moment which just shows how badly divided the house of commons is. they had a vote today on whether

mps should be allowed another round of what they call indicative votes, voting on other plans. guess what? the vote total came back, 310 for, 310 against. completely divided. the house speaker was the deciding vote saying no, if you can't get a majority on this, don't bother. no indicative votes next week. right now, they are debating a bill that would force theresa may to go back to the eu and ask for another extension. there's no plan in place. we have heard from the eu today who continues to say look, we are sick of watching this. someone said in europe they are more entertained watching the house of commons than watching the english premier league. that says something. listen, the no deal, to your original point, yes, no deal is still on the table. the bank of england governor today saying this. it is alarmingly high that the chance of a deal is still here. the chance it could be managed, in his words, is absolute

nonsense. meanwhile, theresa may has been meeting with jeremy corbyn, those two trying to come up with a plan but to be honest, i don't think they can reach a compromise either of their parties can support. case in point, the labour party said jeremy better be negotiating a second referendum. i just don't see that happening. here we go, around and around. april 12th is the next key date. that date is a no-deal brexit if they can't come up with anything. connell: you mentioned the premier league. i know you are a big sport of brighton. if i told you if we can get this whole brexit thing resolved, never have to talk about it again, but brighton has to be what they call in england relegated, kicked out of the league next year, would you take that deal? ashley: sacrilege, connell. brighton will never be relegated. i will let brexit go on for a hundred years. connell: very good. thank you. ashley: my pleasure. connell: we have to go on, talk

about malware at mar-a-lago. this is a crazy story. this chinese woman is apparently found at mar-a-lago, the president's estate in florida, getting past security, including some secret service agents, with multiple devices and a thumb drive that was loaded up with malware. she was arrested. the president was there at the time, he was out playing golf at his golf course not far away. he was in florida at the time. couple of passports, malware to put on computers and there she was. we will see where this goes. it brings up some larger issues. digital trends editor in chief is with us. i don't know, so if you walk around, this doesn't seem very serious, this woman, what she's doing, but maybe it is. if somebody's walking around with malware with them, could you just -- how easy is it to spread something like that around? >> that's exactly the question here. you think about the movies you have seen, cybersecurity movies and the secret villain, somebody turns their back and he puts a thumb drive into somebody's computer and boom, it's all

over. is it really that simple. well, it depends a lot on the computer that you put that thumb drive directly into. so if you go to the white house, they have super-secret, super-secure computers, i think they are probably less likely to actually get some malware but if you are at the president's golf club, where the security is probably a little bit lax, that has a lot more potential to do damage. connell: of course they set up areas where they can be secure and they can do the work of the white house, but to your point, maybe not the whole club is set up that way. what would be the goal if somebody has this, you know, malicious intent? before we ask what we should be afraid of, what should they be afraid of at a place like that? what are they trying to do? >> it seems very clear, the president treats this as an arm of the white house, the southern wing of the white house, southeastern, whatever it is. so this is a way to gain access to the president, to some of the confidential communications he might have from the mar-a-lago resort. connell: how careful does he have to be, the president, i

know very careful is the obvious answer but the reason i ask, there have been reports and suggestions that this president, unlike some others, he would be more likely to maybe use his personal cell phone at the white house. i mean, that seems to me like that's a pretty big risk. i don't know what he discusses on those phone calls, conversations, obviously, but isn't there some risk using your personal devices whether it's e-mail, texts, cell phones, if you are that type of person? >> yeah, there's a tremendous risk here. the problem is the president is all too lax when it comes to cybersecurity discipline. we have seen reports about this for years now. what you are seeing is i'm sure the chinese have seen the exact same reports. they are watching us right now talking about how lax the president is. connell: i don't know what he might argue, i'm having a different conversation there than i'm having but in general, you would think you almost tie down the president, say you can only use this phone and this computer and that's it, this ipad. i guess apparently that's not the case. >> that's the problem with a president who is such a renegade. he likes to do things his own way and feels he has the right

plans and knows what he's doing. sometimes he doesn't take the advice of his own advisers, his hand-picked advisers. in this case he would probably be wise to listen to those people who would say stop using the old iphone you've got, stop tweeting so much. start using the secure phone we would give you, stay safe. connell: this woman at mar-a-lago, from your experience, did this sound like some sort of professional operation, government-involved operation, or just some crazy person? >> the very nature of cybersecurity is evolving around us. maybe this doesn't sound like a traditional espionage thing but frankly, cyber -- cyber invasions we have seen don't sound like those, either. you have armies of younger trained computer experts that are hacking away in a small building. that doesn't sound like the traditional portrayal we have seen in the movies of what cybersecurity villains look like. but this does sound very suspicious. look at me, i'm a tech guy, i carry around one phone. this woman had four? who has four phones? connell: boy, yeah. and was able to kind of get by at least a couple lines of

security, and you know -- >> that's an ugly part here. connell: jeremy, we've got to run. we will see how this plays out. appreciate it. >> of course. connell: the fda investigating those reports that have come in that some people are having seizures and there may be a link between having seizures and vaping. a doctor on that and some new numbers to put it all in perspective when we come back. what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the numbers to examine investment opportunities firsthand. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story. t. rowe price. invest with confidence.

connell: get back here with some new information on the fda's investigation of a possible link between people who have had seizures and use e-cigarettes. first of all, the fda has received a total of 35 reports since 2010 of people suffering these seizures. also people that use e-cigarettes. and the last numbers we have show the total number of americans that do use e-cigarettes is almost 11 million, 10.8 million.

one of the reasons i point this out, i was a little bit surprised, i want to talk about the risks and what you advise for people, that we even got this report from the fda. they must be worried about it. they said they have not established a link yet. they only have 35 cases. obviously it's a huge population and one of my first thoughts was couldn't those seizures could been caused by something else. what do you think of it all? >> it's possible. the thing is that these are 35 reported cases. how many other cases could there be that just haven't been reported? i have had patients come into the emergency room, into the office with seizures all the time. that's something that could be looked at a little closer and the potential risk the public needs to be aware of. connell: you have had them come in and it's connected to vaping in some way? >> we don't know. generally speaking, we don't know for sure. it's not definitive the seizures are linked to vaping or smoking. when you think about it, if you are inhaling this high potent

nicotine concentration in the vape products, you are inhaling toxins and chemicals into your body, into your lungs, and it can overload and overstimulate and affect the brain. we've got these receptors in the brain and when the nicotine binds to these receptors, sometimes it can throw off the normal electrical activity of the brain, resulting in seizures. connell: do you know that because you have looked -- we have a lot more data obviously on people over the years who are smokers, and is that -- is there a link, i don't know the answer to this, is there a direct link between smoking and some cases, people having seizures and if so, would this be the same link or is there no link there at all? >> so there's a link with any sort of toxin or chemical that's ingested in the body, whether it's from i.v. drug use or swallowing it or inhaling it. there is definitely a link with potential seizures. your body -- you stop breathing, there is lack of oxygen to the brain. but that's just one of the things that we see with smoke inhalation and vaping in

children. that's just one of many things. we see also anxiety and depression and impaired judgment. we see irritability and it also, it affects their brain functioning and their brain development. so it's a very serious issue and a topic we have to tackle. millions of children are vaping and they say 50% of the children who are vaping now, within six months will go on to be regular cigarette smokers. connell: it's a lot, to your point, of young people. the number, we showed almost 11 million, the majority of them are on the younger side, definitely under 35 and many younger than that. what do you tell those people? because the way it's marketed, and the reason this will be a big story, if there turns out to be more to it, the way the companies market it in many ways listen, if you are a smoker, this is a better way of doing it, you can get off the regular cigarettes which we know are horrible for you, and this is quote unquote, not as bad. what do you say to people who make that argument? >> so vaping absolutely can help people, smokers quit smokes and

wean off the nicotine. children, stay away from it. don't pick up the cigarette. it's not worth just testing it and experimenting because it's highly addictive and it's more harmful in children. yes, vaping and use of vapes can help some people quit smoking. if you are able to use the type of vape where you can control the amount of nicotine you put in the vape. but juul for example is one high dose cartridge of nicotine. you really don't have much control in how much you are inhaling. connell: okay. we will stay on top of this story. it's just starting on the fda side. thanks. we appreciate you explaining it. in a moment, how wages have been rising. obviously a good thing, but how that could be an issue for stocks, because what it means for companies. that and more as we continue. we'll be right back. my experience with usaa has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us.

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connell: breaking news from the world of politics and money. beto o'rourke out with his numbers in first quarter fund-raising, saying he came up with $9.4 million. his campaign is quick to point out they raised that in just 18 days with an average donation of $43. for perspective, that puts him certainly behind bernie sanders, you saw there at $18 million and kamala harris at 12, a little ahead of mayor pete, pete

buttigieg. in terms of average donations, bernie was able to bring in $18 million on an average donation of about $20, beto about double that on average but still, pretty big number certainly will allow him to keep on going. $9.4 million. wanted to bring that to you since it's money related. speaking of money, the markets certainly not far off record highs. growing concerns, though, about rising wages and energy costs. "wall street journal" talking about that possibly eating into profits this quarter. let's bring in s&p global portfolio manager erin gibbs and our own susan li. erin, what do you think of this kind of theory since obviously, if we all make more money and wages go up, everybody agrees that's a good thing. is this a concern as we head into earnings season? >> it is a good thing that the consumer has more money but the margins are coming down when it comes to corporate profits. so this first quarter we are looking at higher revenue growth than profit growth. which just means that if people stop spending more, say they start saving more, or they don't

buy as much, that makes the markets a little more -- connell: is that the problem with companies not long ago? >> last year it was the exact opposite. exact opposite. so it does make it a little concerning we are already seeing lack of inflation, the fed kind of holding back. we see a global slowdown. so we really want both. we want -- connell: of course, in a perfect world. >> you know, obviously the markets are playing off the fact that we are in a slowing growth environment even here in the u.s. i think the services numbers this morning indicated that, the worst since july 2017. that also means with lower retail sales, slowing services growth, the fed might be cutting interest rates this year. i think there's a 60%, 70% probability being priced in right now and that is market positive. connell: does the fed cut rates this year and if so, is that the right move, will, do you think? is that the environment we're in right now? >> i think it looks like it's on the cards. potentially towards the end of

the year. it's funny to even think that given where we were at the beginning of the year. connell: the president pointed out he's kind of stuck with jay powell. one of the funnier quotes of all time for some reason, if it was a quote, it was in the paper the president apparently said to jay powell you know what, i guess i'm stuck with you. the guy he's stuck with is going to cut rates is your point. >> yeah. i think beginning of the year, no one was talking about a cut. everyone was just talking about the fact that we could see no further rate rises but you know, just a few months later, we are now talking about potential for a cut and that just shows how far it's come so quickly. connell: all right. what do we do investment-wise in this environment? you talked about how things have changed. how do you change your approach? stocks have still done relatively well. today, the services number didn't kill us. the market is pretty much flat. >> one of the things to look for is companies that can handle higher wages, aren't so heavy on what they are paying and also oil prices. have good margins.

ones to avoid are the communications services, consumer discretionary, health care, all very intense with wage growth, industrials, and looked more like say your financials, consumer staples, that will still do very well even if we see higher margins. connell: i want to talk about china because we have had reports at least today from a number of different sources, edward lawrence is down there for us at the talks in washington, that we are making, susan, certain progress, right? some will say you are 90% done. i made the point a couple times on the show today that that last 10% can be a little on the tricky side. what do you make of what you're hearing? >> i would say it's been very encouraging, especially some of the body language you have seen. connell: we are looking at liu he on his way up the stairs. that, that little wave, the smile, edward was telling us earlier, people think we're crazy for even thinking about this, but usually the guy just walks in, stone cold, not a big smile. >> statesmanlike. some of the rule changes and

concessions china has been making have surprised me. the fact it's illegal for chinese companies to demand tech transfers. that's never happened. obviously china is serious about getting a deal. what does a deal look like? i think consensus is a deal looks like whatever president trump says is a deal. you know that's pretty much -- connell: whatever he is willing to take the win is the point. what do you think of that, will? then you start to question something's being priced into this market and has been for a long time. it's a matter of whether investors are getting it right. how do you think it all ends up? >> like you said, it's the last mile that's going to be the hardest. further to that, a deal will most likely get announced of some sort but it's the enforceability of that that i think will be the challenge. connell: how should we do it? i'm taking -- like we should have a suggestion box. everybody -- not everybody but a lot of wall street types, investors will say i don't want to see anything, get rid of these tariffs, then the next question is okay, how do you

enforce it. go ahead. what do you think? >> there's not an easy answer. connell: there isn't. maybe it's tariffs. it might be tariffs. whether you like them or not. do you think it will be, some tariffs stay in place? >> i think there will most likely be some tariffs. i'm not sure anybody is expecting this to be completely free. it's just when you start talking about the much more difficult things, some of the security concerns, intellectual property concerns, much more intangible and harder to enforce with tariffs, for example. connell: quick thoughts from both of you before we wrap here on how that enforcement looks. that's going to be the key to whether we get a deal. what do you think on enforcement? >> you know, again, intellectual property, we have struggled with that one. i think that's going to be a tough one, even for the markets to price. i think in general, the market's reaction is going to be if it's done, if it's just out of the news it's going to be a positive. it's not so much about the enforcement from the market's perspective. connell: so anything, if the president just signs a deal even if it doesn't have strong enforcement, the market -- it's one thing if the markets are

okay with it. it's another if it's actually a good deal. that's a different question. real quick, susan. >> we have been trying to sign one for how many administrations? i would say they probably will leave that 25% on the $50 billion worth of chinese goods. i think china has been backed into a corner and this is kind of the reality that they are negotiating with. i think it's a hard line the trump administration has set. connell: markets come off the highs today. i don't know. we can blame will, i guess, in the last few minutes. we're not going to blame susan. still have to work with her. thank you, will. in a moment, we get back to that and the next company that's rolling out 5g. we have it for you. just a quick break.

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connell: verizon the latest to roll out the fast 5g service that the company turned on its 5g wireless network in two different markets. it turned it on in chicago and also minneapolis. so the companies are getting there. the first to work with a mobile phone, the motorola phone, the moto z3. apple not quite getting involved but verizon is with the motorola phone. the 5g is turned on in minute in place and chicago. that leaves me here with 30 seconds of self-promotion. i will see you back here on fox business network at 4:00 p.m. eastern time when melissa joins me. i've been told much more watchable with melissa than without. art laffer is on. gasparino already given me the questions if you saw that. he wants me to ask about steve

moore. obviously his economic outlook will be very interesting as it always is when it comes to spending and rest. we pretty much set it up for charles payne flat. anything you do from here is on you. charles: you know the cp effect. 30 second ises? how about 30 minutes, connell. connell: self-promotion. charles: good afternoon, everyone, i'm charles payne this is making money, golden day on wall street, as tech stocks continue to soar. all the major indices are nearing all-time highs. how powerful the rally has become. the mavens who run the sidelines, they're chasing, of course, should you be chasing too. optimism over trade talks between the united states and china, adding a extra excitement as well. there are new signs of recovery in the china's economy. we'll break down those details as well. president trump reportedly telling fed chair jerome powell on a phone call recently,