the president described the events in baghdad as the anti-bengha anti-benghazi. he was not kidding. cheryl: he was not. that is it for "mornings with maria." maria will be back on monday. we have missed her. that is it for us. "varney & company" starts now. stuart, take it away. stuart: good morning, cheryl. good morning, everyone. qassem suleimani is dead, killed in an american strike ordered by president trump. he was the commander of iran's revolutionary guards. he was iran's top military leader. he had ordered the killing of hundreds of americans and the administration says he was planning more. he was traveling in a convoy on the road to baghdad's airport. iran state television says the attack was launched bhooi eed b helicopters. mike pompeo says suleimani was taken out because he had planned an imminent attack. the news broke last night and reaction was immediate. democrats, not happy. speaker pelosi with intel chair

adam schiff complained that congress had not been consulted. candidate elizabeth warren called it reckless. joe biden said the president quote, had just tossed a stick of dynamite into a tinderbox. representative ilhan omar called the strike a distraction. in contrast, the republicans have been supportive. senator tom cotton says suleimani got what he richly deserved. senator lindsey graham called it a major blow to the iranian regime and he added quote, if iranian aggression continues, and i worked at an iranian oil refinery, i would think about a new career, end quote. iran's khamenei calls for harsh retaliation. that's a backdrop to this, a selloff in the stock market. it's not quite the big selloff we were expecting a couple hours ago when dow futures were down 350 to 400. now we have the dow down about

250, the s&p down 30, the nasdaq down 100. that's the stock market. there is a flight to safety going on as well. the price of gold going straight up. we are up 20 bucks an ounce at $1549 on gold. there's big money flowing into treasury securities. that pushes the ten-year treasury yield down to 1.82%. that's a flight to safety. the price of oil, no surprises, moving up this morning to $63 a barrel. that's the financial backdrop. now, on today's program, we will ask is this a temporary setback for the bull market, will the mideast slide into a new regional war, will we impeach the commander in chief and remove him from office in the middle of all this? there's a lot to go at. "varney & company" is about to begin.

the risk of doing nothing was enormous. enormous in the short term in terms of the imminent attack that qassem suleimani was plotting but also highly risky. doing nothing in this region shows weakness, it emboldens iran, it's what's happened under the previous administration for eight years when the iranians felt free to conduct hundreds of attacks. stuart: secretary of state mike pompeo there talking about the risk of doing nothing and now iran's supreme leader threatens retaliation, direct word, retaliation. harsh retaliation, actually. here's the latest tweet. it just came in to us from president trump. general qassem suleimani has killed or badly wounded thousands of americans over an extended period of time and was plotting to kill many more, but he got caught. he was directly and indirectly responsible for the death of millions of people, including the recent large number of protesters killed in iran itself. while iran will never be able to

properly admit it, sul many was both hated and feared within the country. they are not nearly as saddened as the leaders will let the outside world believe. he should have been taken out many years ago. end tweet. that was from the president. we are awaiting a full statement from the president. it is maybe to come later this morning. we shall see. let's go to blake burman at the white house. what kind of retaliation can we expect from the iranians? any idea? reporter: so far, all we've gotten from iran today is words and their reaction, you just heard the president talk about the leaders inside that country and how they are responding. let me tick through them for you real quick. it starts at the top with the supreme leader, the ayatollah ali khamenei, he posted a message on state-run media in which he vowed that iran would retaliate, he said there would be forceful revenge. then there is the iranian president rouhani, who says the

path of resistance to u.s. excesses will continue, the great nation of iran, he says, will take revenge for this heinous crime. the foreign minister also says the u.s. bears responsibility for all consequences of its rogue adventurism. so that's the response from iran today. of course, the big question is what happens from both sides here on out. stuart: got it. blake burman at the white house. thank you. joining us, walid phares, fox news national security analyst. let's get right into this. could we be looking at a tit for tat escalation, the iranians retaliate for the death of suleimani, we retaliate for their retaliation and on it goes? could we be in that situation? >> we could be very well. actually, it is really the iranian regime that put all of us in this situation. we know the administration was not really thinking of a full-fledged war with iran or confrontation of that regime in

iraq or elsewhere, at least not in an electoral year, but the activities of mr. suleimani and his mimilitia, he was meeting wh the heads of militias from lebanon, from iraq, from iran. that is evidence they were working on regional activity against our forces on the ground in iraq and by the way, their concern was those demonstrations because those demonstrations were creating a revolution against them. as the president said in his tweet. so in order to shift away the focus from the demonstrations to a limited confrontation and war with the u.s., they tried to do so, they planned for so, but we intercepted them and that is why the iranian regime now will have to recalculate. you asked me about what they can do. many things, from direct action, from going against our allies, from waiting. they are really shocked now and at this point in time now, they will be re-evaluating their strategy. stuart: in your evaluation, are

we on the brink of a new regional war? >> we are on the brink, they are on the brink. they will have to decide, not us, we are actually increasing our presence in the region and by the way, they don't have enough assets in iraq to pull a regional war on us. they would need months and months of preparation and guess what, unlike in the '80s or the '90s, we know when they prepare and that was evident yesterday as to what happened, so the decision is going to be very tough on them to decide should they invest everything in an action which they would lose, or wait for better times. stuart: i think we should also point out, i think we've got the video here of iraqis running through the streets celebrating the death of suleimani, which implies that his death was popular in some quarters. last word to you? >> absolutely. the suleimani group has killed more than 600 young iraqis. guess what, young shiite iraqis. obviously most of iraq now is in

a state of uprising against iran. stuart: thanks for joining us on a very important day. always appreciate it. thank you. back to the market now. stock futures pointing to the downside, because of this attack, down about 240 on the dow. market watcher jonathan hoenig with us now. obvious question, is this a temporary blip in the bull market, or a full-fledged rundown of stock prices? >> we don't know. why? because of the middle east. not because of superior u.s. companies like apple, like microsoft. look at all those 52-week highs yesterday. the trend is up for stocks. so don't panic. look, the middle east is a powder keg. iran has promised retaliation so there's an unknowable now war premium that is being baked into stocks. don't panic. look, the market isn't even down 1% at the open but now there's the potential for retaliation from iran and more retaliation for that retaliation from the u.s., it's clear there's going to be some impact on stocks

moving forward. stuart: but look at the price of gold. it's at its highest level since september, up about 20 bucks this morning, reaching $1548 as we speak. the price of oil to an eight-month high, i believe we are at $63 a barrel. how do you invest, how do you play this market? >> i think you actually participate in some of those assets. the precious metals has been going up for months now. this is kind of icing on the cake, if you will, for a lot of those longs. the etfs, exchange traded funds like gld, for example, that tracks the price of gold or slv that tracks the price of silver. the thing to keep in mind is the long-term, is the long haul. just as stocks have gone up for the better part of ten years, a lot of these precious metals once they get going, they can go up for years as well. so don't panic. even in times of international turmoil, keep the long term on the horizon as an investor. stuart: got you. thanks very much for being here. always appreciate it. thank you. let's get back to the futures and show you how we are likely to open up this morning. down 250 for the dow

industrials. that's a lot better than it was a few hours ago when we were down 350, almost 400. we have yet to hear directly from the president. we have had a tweet. when he speaks, actually speaks, will his tone be celebratory like he did at the death of al baghdadi or will he say reluctantly, we had to take suleimani out? when he speaks, you will hear it right here. the president is facing heat from the democrats after ordering that killing of suleimani in iran. we have speaker pelosi saying that congress was not consulted. she wants details. but republicans generally approved of suleimani's killing. will the voter? we are on that one. more "varney" after this. ♪ ♪

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stuart: some democrats very concerned about escalation after the strike. edward lawrence in washington. what do you have for us? reporter: yeah, democrats are

saying the president endangered the whole world with this strike. senator tim kaine, who is on the foreign relations committee, said in a statement trump's decision to tear up the diplomatic deal that was working and resume escalating aggressions with iran has brought us to the brink of another war in the middle east. now, he goes on to say that it was wrong to wage this attack on iraqi soil without that country's permission or congressional approval. kaine hopes the negotiations or says all hopes for good negotiations are out the window for iran. nancy pelosi believes this endangers american diplomats around the world as well as troops. she calls for a full briefing of congress and what escalation steps are being considered by the administration. stu? stuart: that's the democrat side. come in, please, phil webman with real clear politics, joining us from washington, d.c. edward -- sorry, phil, this is hard line trump. very much so. you think his base approves of this? >> it's not just hard line trump. i think what we are seeing now

is this is trump's red line. the death of one american contractor and an attack on an american embassy in iraq, this is what is going to be his response. i think he's putting tehran on notice that this is what he will do and this is the response of the united states if, you know, our assets and our individuals and our allies are not respected around the globe. stuart: in your judgment, does this go down well with the base? >> whether or not this goes down well with the base, i think this is much more historic. this individual who was taken out was behind nearly every one of iran's missions against the united states in the last decade and i think that long term, this is an individual who had american blood on his hands and now is an individual who is no longer here in this world. stuart: i'm going to repeat a choice quote that came to us from senator lindsey graham. actually it was a tweet. here it is. if iranian aggression continues, and i worked at an iranian oil refinery, i would think about a

new career. earlier today, the senator suggested that we might take out iranian oil installations. what do you say to that? >> at this point right now, iran should be much more worried about the united states' response than anyone in the u.s. should be worried about iran's response. the reason being i think that president trump just showed that the death of one u.s. contractor would result in the death of the number two guy next to the ayatollah so i think that continually we have seen iran attack u.s. oil tankers, we have seen iran attack u.s. contractors and now this is the response. he basically is putting the world on notice, not just in the middle east but around the globe that this is going to be his response. so think twice before you mess with the united states. stuart: i was intrigued to see this, we ran this video just a few moments ago, of iraqis, some iraqis running through the streets applauding the death of

suleimani. wasn't expecting that. it appears that maybe the president wants to encourage dissent within iran, because we should not assume that suleimani and the regime in iran is universally popular inside iran. >> right. if that was his goal, he succeeded very much so because this is an individual who is not popular, not just in iran but he's not popular anywhere that he operated, and again, he was behind a lot of iranian operations. in fact, he texted then general petraeus saying he was behind iranian operations in iraq, syria, lebanon, and elsewhere throughout the middle east. there is a lot of resentment toward this individual because there's a lot of blood that was lost as a result of his actions, and now he is no more. stuart: we did get a tweet or two from the president on this earlier this morning. do you expect the president to appear live in front of the cameras at some point later on today? you expect that? >> that's what i'm planning on for my coverage today.

i think president trump is not going to miss this opportunity. thus far he has been very diplomatic in terms of what he's willing to say, but this is a very bad individual, this is a very bad individual who killed americans and i think that he is not going to waste an opportunity to tell the rest of the world that this is what happens when you mess with the united states. stuart: i think he's going to be serious. i don't think he's going to be as celebratory as he was at the death of al baghdadi. what do you say? >> yes. i think this is, you know, president trump often is bombastic. this is a president who tore up the rule book and communicates the way that he wants to, but on occasions like this, when the gravity requires, i'm thinking back to, you know, the kavanaugh confirmation fight, i think when the opportunity requires the president to be very straightforward, to be very clear about what he's going to do, i think he delivers and i think that perhaps we are going to see that later today, without

a lot of the bombast that's been characteristic of his other statements. stuart: thanks very much for joining us, phil. thank you. let me bring susan li into this while we look at the markets. we've got the dow down, looking at a loss of 250, 260. susan: you are still gaining over the last two days as well. i think most of the reaction has come in the international price of crude hitting an eight-month high today. as for u.s. oil, we are pretty much intact. i think we are at $60 and change. $63. don't forget, oil is in rich supply here in the u.s. in fact, the u.s. has exported in the last few months of last year for the first time in 75 years. so as you see with the markets, it looks like we have a global stock rally under way and this is just a small blip. you see the futures coming back. i think that's positive. stuart: a blip. that's an interesting word. thanks very much. we will take you to the new york stock exchange momentarily. let's see what the traders are actually saying down there on the floor ahead of the opening

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suspending flights to the airport in baghdad. susan: we know that we have the u.s. state department warning those travelers to get out of iraq and baghdad as well and u.s. airlines, by the way, airlines globally have fallen in reaction to this move that we are seeing. in fact, they have been one of the worst decliners, american airlines, delta down 2.5, 3.5% just after the bell so there are concerns about travel, especially when it comes to flights. stuart: got it. let's go to the new york exchange. kristina partsinevelos is there for us. now, is this -- are the traders saying this is a temporary blip for the bull market, or the beginning of a new slide for stock prices? what are they saying? kristina: well, you would think it would be a risk-off moment given that the dow was down 400 points but honestly, you are seeing it climb back up. a lot of people are saying this isn't a buy the dip kind of moment, the traders that are around me thus far, because you are starting to see it climb higher. you are seeing crude down, that's affecting a lot of oil and gas companies at the moment, exploration companies like

halliburton, exxon, chevron, marathon oil, all trending higher. the u.s. dollar is at a nine-week low and gold at a four-month high. another major stock, u.s. defense correcto ocontractors a lockheed martin and general dynamics. it seems here one trader said the markets could end in the green actually. stuart: that's interesting. all right. we will get back to you shortly. by the way, we will take you to wall street for the opening bell. we are expecting a downside move after this. man, i'm thinking tacos. hey hey! you guys look like foodies. would you like to try our trashy back ribs? oh, that sounds great... everything is locally harvested, farm to dumpster to table. uhhh, what do you... what else do you got? (stammering) w-we have a melon rind stew. comes with a pork and bean reduction. yeah, we're going to just do a lap

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i think you can too. trust aag for the best reverse mortgage solutions. so you can... retire better. stuart: the market opens in precisely one minute. we will see what happens when we open it up. looks like we are going to be down about 300 points. we have with us to help us through this difficult morning, david dietze and susan li. david, let's get right at it, shall we? you think this is a temporary blip in the bull market? >> well, of course no one knows for sure what the response is going to be from iran, what china is going to do, but on balance, i would say stay the course. number one rule of investing is don't make hasty overreaction but think about it. anyone going to stay home this weekend, not go out to dinner, not go shopping on saturday because of what happened? i don't think so. remember, it's all about the u.s. consumer.

i think it stays strong. stuart: jonathan hoenig said the same thing. don't panic, this is not the time to sell out all across the board, because of a one-day movement. let's see if it is a one-day movement. here we go. they ring the bell, they clap, they cheer and the market is now open. we are off and running. it's a friday morning and we are going to be down right from the get-go, we are off 300 points. 368, to be precise. i expect to see a sea of red on the left-hand side of the screen, except for chevron and exxon, which of course are oil companies which are benefiting from the upside move in oil, $63 a barrel. a sea of red and the dow right now is down 1.1%. 330 points. show me the s&p. we've got the same kind of drop there? not quite so bad. about 1% down for the s&p. ah, now the nasdaq. this has been the clear winner for a long time, a huge gain last year, big gain yesterday, down 1.25% today.

back below 9,000. what does that tell you? you are back below 9,000. i mean, really, who expected to break 9,000 in the first place? price of oil this morning, $63.34 per barrel. david, do you expect a ripple effect on the economy? i don't think gas is going to keep coming down in price. i think it might start to go up. any serious economic impact? >> i'm going to give you two reasons why there may be a real silver lining to what happened, why this could be good. here's the first one. i think it keeps the fed on hold longer. we have seen a big pullback in interest rates. lower interest rates have driven the market for the last decade. it drove the market last year and lower interest rates longer is going to be manna from heaven for the bull market. second, of course, i think this puts president trump in a more positive light. it shows strength. it takes some of the side shows off the table and so if this increases his chance for getting a second term, that means the trump economy, lower taxes plus

regulation goes longer, that's a positive for this market. stuart: the politics are favorable for president trump in this respect? favorable to him? >> it was a response that was just stunning. the technology worked. compared with 1979, when another president went in, it was an utter failure. here, we succeeded and of course, everyone across the board, dems and republicans, says this was a bad guy. something needed to be done. you can quibble with exactly how it was done but this shows strength in my view. stuart: okay. we were down 300 at the open. now we are down 250. susan: looks like the market just wants to go up, right. we hit those record levels yesterday, great way to start the first day of a new year. by the way, check in on the fear gauge, the volatility index. has it moved that much? no, not really. we hit the highest since december 19th on the back of the killing of suleimani in iraq so i feel like the market's probably going to put this behind and focus on fundamentals and profits going forward. stuart: that is fascinating. i woke up this morning real early, 2:30 eastern time, got

out of bed, looked at futures, we were down 350, 370. looks like the end of the world come the opening bell. not so. look at that. we are now down 220 points. that's not such a huge loss in the great scheme of things. susan: we have oil prices, brent hitting eight-month high, west texas which is more u.s. based oil, having a more subdued reaction. this is pretty much similar to what we saw remember in september with the drone strikes in saudi arabia and what happened after that? markets hitting brand new highs. stuart: gold, highest level since september. that's a textbook case of a flight to quality. any more in it than that? >> i don't think so. i think we are off our highs a little bit and put the market movement in context. we were up 340 yesterday in the dow. we are only down 220. year to date we are still up. stuart: there you go. susan: we should check in on travel shares, especially the airline stocks which are seeing probably some strong reaction today, down 2.5%, 3% across the board in after hours trading

reaction to this news. indian airlines also asked to exercise caution amidst the u.s./iran tensions. we just reported that royal jordanian will be suspending flights to baghdad and this is usually where you see the knee-jerk reaction, probably in reaction to higher oil prices, too. stuart: you were right, look at that. the airlines, american airlines down, squinting, 5% down. delta down 3%. same with united. same with southwest. same with jetblue. they are down 2.5%. the dangers of travel highlighted by this attack in baghdad, down go the airlines. i think that's probably the worst -- one of the worst performing groups, if i'm not mistaken. susan: impacted by higher fuel costs as well when it jumps up to $70 or $65 a barrel. stuart: that market is coming back. susan: i told you. stuart: you did. susan: wants to go up. stuart: down 180, 190 now on the dow. 74 points down on the nasdaq. let me ask a crazy question to you, david dietze. you can give me a crazy answer if you like. you think it might close higher?

>> you can't rule it out. you can't rule it out. susan says yes. susan: absolutely. there's trillions of dollars on the sidelines. we have a bargain and down market, people want to search for them like your microsoft. >> let me say two things. one, if it is a wake-up call for some people who are way too far over their skis who think apple will go up two points every day. that's not going to happen. so if you are overweighted, obviously you need to have something in safe haven assets. on the other hand, remember this country is not your father's country in terms of energy production. we are a net oil exporter today. so in some ways the entire energy crisis helped us. it's china that has the problem today. stuart: keep on that board. go, can you go back to that, please? i want big techs back again. that's where so much market action is concentrated. look at the big techs. they are not down that much. apple is down a quarter of 1%, a mere 72 cents. only a fractional retreat from the $300 per share mark that it hit yesterday. google is down .7%.

same with -- amazon is down 1%. facebook is down. microsoft is only down .6%, down a buck. susan: we also have records as well. tesla hitting a record high after beating delivery expectations in the fourth quarter. they actually delivered 112,000 vehicles. that was much higher than analyst estimates and higher deliveries of the x, s and 3. stuart: that was the fourth quarter. overall in 2019, tesla delivered 367,500 cars. look at that. look at that. look at that. 4% up for tesla. $448. who saw that coming? what have you got to say for yourself? >> we see these fuel prices moving higher. if that's not a wake-up call to look at electric cars this weekend, i don't know what is. susan: cheap gas. stuart: electric cars, long way away. not going to happen. now we are down 200 points. i'm not going to say we stabilized, but the point is we

are not down 300 or 400 points. we are down 200 points. because the dow was up, what, over 300 points yesterday, we are not completely erased yesterday's gains. so you've really got to put this stuff into perspective. it looked real bad when we all got up this morning, it was red arrows across the board and it looked like a catastrophe. we were going to be sharply selling off, end of the bull market. doesn't look quite that way right now. so what have we got on the screen? we have big tech. show me other groups of stocks, if you can, please. i want to give our viewers as many different groups of stocks as possible to see how they are performing in this downside market. i'm looking at financials shortly. here we go. they are all down but not catastrophic losses. what do you say about the financials? >> of course, with interest rates coming down, that does squeeze their net interest margins so it's a natural group to be down but i think longer term, with higher energy prices, potentially higher commodity prices that would lift inflation

a little, send interest rates back up. this may be a day if you are underweighting banks to go shopping. stuart: really? shopping in the bank stocks? long time since we did that, ain't it. susan? susan: i want to talk about apple in particular. we crossed $300 yesterday, a milestone for the world's largest company and this morning, another upgrade coming from rbc capital markets. third highest on wall street, taking the stock over $330 because they are priced at a premium. there's a lot of volume, airpods, airpod pros and 5g, a game changer this year. stuart: american forces took out a leading terrorist, suleimani, the iranian number two. let's look at defense stocks. they are all up. it was american defense products that did this and the market's response is to buy those defense stocks. i've got united technology, general dynamics on the upside. boeing, that's a separate story. boeing, there's other stuff going on with boeing which

accounts for its loss. go back to the original board with raytheon and the rest of them. i don't know who they are. no idea. raytheon, lockheed, northrup grummond. nice gains. ra who makes the missiles? i can't remember. susan: lockheed. stuart: northrop, maybe? i think its missiles did the damage. susan: we know gold has hit another four-month high. in fact, gold had its best year since 2010 last year in 2019, also ten-year treasury yields, biggest drop in three weeks as well. again, these are minor moves because i feel like we have gotten used to this picture. as we mentioned, there's a lot of disruption in the mideast and when it comes to oil prices, the u.s. as david pointed out, we are a net exporter in the last

few months, first time in 75 years. >> i would urge people not to run out and chase gold or long-term bonds today. that's not the right investment approach. obviously, stay diversified. stuart: what a way to open the market on friday morning. only down 200. thanks for joining us. very important day. glad you're here. thank you. check the markets overall. where are we right now? we are down but it's not that bad. dow is off 200, s&p down 24, nasdaq down 75. the price of oil, $63 a barrel. it's coming up. we have an analyst who says we may see prices at the $80 per barrel mark if the situation in iran escalates. we will have him on shortly. we still haven't heard directly from the president in person. now, he's holding a rally later today in miami but we are hoping to hear from him sooner than that. if he appears, you are going to see it right here. this is "varney & company."

stuart: all right. we are only down 200 points. my, it looks a lot different than what it did a few hours ago when we thought it was going to be down 350 or 400. down exactly 200 at 28,668. tesla on the upside in a downside market. they delivered 367,500 vehicles last year, more than expected. the stock is up 4.5%. apple, yeah, they hit $300 yesterday. they are right at $300 today again, in a downside market. how about that. staying on your money, look who's here. a man that i have known for 35 years, if not 40 years. ed, it's great to see you again. >> my pleasure indeed. stuart: after all these years, i read your stuff and you were saying look, this market is due

for a breather. is this the breather? >> i don't know. to tell you the truth, i do hope that the market just kind of stalls for awhile, because it's well ahead of the earnings fundamenta fundamentals, about 18, 18.5 forward pe and 15 is kind of average historically but 18, 18.5 makes sense with interest rates and inflation rates so low. my concern is we just kind of keep going here and get up to 20 or 22 kind of multiple. stuart: that's what it looks like. okay. look at what happened overnight. >> yesterday it looked like it was just going to keep going. stuart: a melt-up situation yesterday. >> i'm worried about a melt-up, actually. stuart: this doesn't look like much of a constraint -- >> no. i have been keeping a diary of selloffs in this bull market. i counted 65 what i call panic attacks and six of them were actually outright corrections of 10% to 20%. stuart: that's in the last, what, 11 years? >> since march 2009. stuart: okay. that was the low.

>> we have had a lot of these sell-offs and they have all been buying opportunities. maybe we just kind of got this knee-jerk pavlovian reaction in the market where any time this thing goes down for any reason whatsoever, people come in and buy this thing. part of that is because fed chairman powell has told us that he's not going to be raising interest rates this year unless inflation really makes a big comeback. stuart: and bearing in mind what happened overnight, the killing of suleimani, i doubt that the fed is going to be enthusiastic about raising rates now. >> no. absolutely. i think the market's starting to kind of think well, how does this play out with fed policy. stuart: what do you think of the odds, we are down 182 at the moment, 179. there you go. what are the odds that we end the day higher? >> i don't know. i don't do day trading, quite honestly. i deal with the trend. but i think it's really quite possible, if it is, i would be worrying again about a melt-up. i like to have sort of a civilized, leisurely bull market

here. i have been forecasting 3500 on the s&p 500 by year end. i just hope we don't get there in the next few weeks. stuart: but the market wants to go up. >> the market wants to go up. stuart: i mean, you can just feel it. every time you get a pullback -- >> look at what you are getting in fixed income. you are getting very little return. you got dividend yields that are above the bond yields and so people are continuing to buy the market. stuart: help me out. >> happy to. stuart: you have known me for many, many years. >> right. stuart: i owned microsoft for years and years and years. late last year, literally last week, i sold a chunk of the microsoft that i have been holding for years. >> my condolences. stuart: i took a lot of profit and i'm a happy guy. what should i do with the cash? >> well, maybe put it back in microsoft. don't you have some, you know, seller's remorse already? stuart: i do. i do. >> see? there you go. i don't do individual stocks,

but it is a great company. that's a wonderful thing about the u.s. and our stock market, there's a lot of really great companies that are extremely well managed that are world class. stuart: you and i have been around for many, many years. >> you have been around for many years. speak for yourself. stuart: okay. okay. okay. >> but go ahead. stuart: you ever seen a bull market like this one? because i haven't. >> well, i mean, the 1990s was an extraordinary bull market, particularly in the tech sector. but it was all tech all the time. this one has been actually very broad. every now and then people take a snapshot and say it's too narrow but if you look at the dynamics of it, it keeps broadening out. maybe what this event in iraq/iran causes is for the laggards like energy stocks to start to do some catch-up here and as we said, the defense stocks are looking awfully good. instead of thinking of what's going to go down, think about

what might actually go up as a result of this. stuart: i'm thinking. i've got microsoft cash on my hands here. >> so the energy sector may be a good place to look for some value. stuart: i just can't see it. but who knows. who knows. after all these years, it was great to see you again. don't be a stranger for another 35 years, please. >> i'll be back. stuart: thank you. appreciate it. we are monitoring the latest developments out of iraq after a u.s. air strike killed iran's top military general. the left wing media calling suleimani the quote, most revered military leader? media watcher brent bozell all over that and he will join us next hour. check out the dow 30. not quite -- well, yes it is. it is a sea of red. 28 of them are down, two energy stocks on the upside. back with more after this. whether you're out here on lte

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about, what, an eight-month high. i think it is. $63.41 right now after the killing of suleimani in iraq. joining us, oil analyst carl lowry. carl, why do you see oil could go to $80 again? >> well, stuart, $80 is probably being conservative. i mean, there's going to be three things we're looking for here in oil and oil markets. retaliation, escalation and continuation. those three things are the factors that we can see $80, we can see $100, we can see $150. it all depends on how far and how wide this goes. stuart: there's a lot of talk that america would respond to any retaliation from iran by attacking iran's oil facilities. does that make a big difference to the world oil market, because i think they only export, what, a couple hundred thousand barrels a day at this point. >> it does, you're right, but you see aftereffects we can see from there. when you look at the arab

states, what kind of cohesion will they have after retaliation against iran? you have to look at saudi arabia or iraq or libya. i mean, all of these things could make a difference going further. and that's where we really think the problem will be. obviously we have enough oil here. stuart: well, yeah, but don't our frackers and the horizontal drillers in america, texas and north dakota and elsewhere, can't we make up the shortfall? >> we can, and that's what can be the big difference maker in this year. i think before the past few years, we have kind of ignored geopolitics but now going forward, this can make a difference in how we grow our oil production in the next few months. stuart: so i just want to be sure here, you are forecasting that the price of oil at some point this year or in the near future, goes to $80 a barrel? is that your forecast? >> it's my forecast. again, retaliation, escalation, continuation. that happens, $80 easily, maybe even $100. stuart: that would mean that the price of gasoline in america

starts to go back up again. we are around about $2.50 a gallon at the moment. we go up from there if you get $80 a barrel oil. >> it's tricky now. let's be careful here, because what we have is a good supply of gasoline in america but we do supply or the world supplies a lot of gasoline to iran. they are one of the biggest importers of gasoline in the world so if that happens, we shut down iran, it could be we see that gasoline come back into our market short-term. longer term repercussions will fall back on crude oil prices. stuart: very interesting. that's good stuff, because we want to know what are the tangible effects on us in america from what just happened in baghdad. good stuff indeed. thanks for joining us. we do appreciate it. thank you. we are monitoring developments in iraq, of course, after a u.s. air strike killed iran's top general. this is hard line trump. up next, we have general jack keene for you. what happens with impeachment if we are at war with iran or any kind of military conflict?

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this is truecar. (narrator) before you buy a car, see what others paid for it with truecar. stuart: we're coming up on 9:59 in new york city monitoring the latest from iraq after a u.s. air strike killed iran's top general, qassem soleimani, traveling a convoy near baghdad airport when the american strike hit him. the president has tweeted this. general qassem soleimani has killed or badly wounded thousands of americans over an extended period of time, and was plotting to kill many more, but got caught. he was directly and indirectly responsible for the death of millions of people including the recent large number of protester s killed in iran itself while iran will never be able to properly admit it, soleimani was both hated and feared within the country. they are not nearly as sovreign

as the leaders will let the outside world believe. he should have been taken out many years ago. we're hoping to hear directly from the president a little later, if and when he appears in front of any podium you'll see it, right here. check the markets, they were down 300 points at the opening bell, and more than that, before the market opened. we've come back though, and now we're down 200 points that's where we have it. it's just past 10:00 and we've just got the latest read on manufacturing, the number, please? >> 47.12 which is less than economists forecast, and six straight months we've been below that 50 level which indicates there's been a shrinkage in manufacturing. a lot of people say that it's in recession. stuart: that accounts i think for just this latest dip down on the dow. we were down 190, then they got the manufacturing number which is rather disappointing, manufacturing obviously not

strong, and now we're down 218 points. i wouldn't call that a huge reaction by any means. >> as for construction spending that came in a little bit higher than anticipated in the month of november, so higher by .6% economists were looking for something around .4 to .3% so given that we've seen a bit of a turnaround in the housing sector in the last few months of pending home sales now higher three out of the past four months also prices have gone up as well, so this is important for the housing market which represents about a fifth of the u.s. economy. stuart: the point on that kind of neutralizes the rather disappointing news on manufacturing, and we're down, 210, 212 points on the dow industrials now this. the air strike that killed iran 's general soleimani was ordered president trump. come in, general jack keane, fox news strategic analyst. general, the president is obviously taking a hard line here, you approve? >> oh, yeah most definitely. i take it at face value, what he

is saying and secretary pompeo that this was a preemptive defensive measure to disrupt a subsequent attack on american troops and in other words they had intelligence that an attack was eminent, soleimani was involved in that, and he flew in from syria and he was meeting mo handas, an iraqi operational commander working for soleimani inside iraq, and they were likely going over the plan for the next phase or the next operation, when we struck. and it's within the president's authority to conduct that attack stuart: i just want to roll some tape for you general. you may have seen this already but i want this for our viewers. secretary of state mike pompeo spoke about the president's strategy earlier this morning on fox news, roll that tape, please >> president trump has taken a fundamentally different approach and we're confident that our strategy that we've developed not only the economic pressure, but building out coalition forces and the separates, works to reinforce our saudi &

partners and all of the things that we have done to create the conditions for a more stable and peaceful and prosperous middle east. stuart: so the president appears to be trying to keep iran in its box, and reluctantly took out soleimani. he doesn't want to provoke iran. he doesn't want to attack him but he did this time because he had to. >> yeah, two points here first of all the president has exercised significant restraint. they shot down a u.s. drone, they disrupted the tanker flow through the persian gulf, the attacked one of the largest oil fields in the world in saudi arabia. we didn't respond to any of that other than defensive measures. we did something here, because the president established a red line. if you kill americans i'm going to respond and i believe they knew another attack against americans was forthcoming. the second point is this. this administration changed the strategy dealing with iran. obama, for eight years they tried to bring iran into the

community of nations as a responsible nation. that is what the nuclear deal was all about. it did not work. we got the civil war in syria, the civil war in yemen, we got encroachment of israel and undermining of the government in iraq. that is what took place during the obama administration. this administration came in and said we're changing that policy. we're going to be willing to confront the iranians and stop appeasing them but use economic and diplomatic tools to do it. stuart: but are we going to get into a tit-for-tat retaliation scenario which escalates and broadens out to a regional war? is that a possibility? >> yeah, certainly it is a possibility but i don't believe that is what's going to happen. first of all the iranians have treasures to make themselves in terms of what their response will be and we've got to look at them not through the eyes of al qaeda and isis-type organization they are a nation state with resources and worldwide networks , so the threat could be not just in the region but also

globally, and secondly, we're very cognizant of the ladder of escalation. iran doesn't want a war, united states doesn't want a war and i think we're too smart, both nations, to lead themselves to that endpoint where we have it all out war. that would be a huge strategic failure if that took place. stuart: we'll leave it at that. general jack keane always a pleasure. thanks for being with us today sir really appreciate it. >> good talking to you. stuart: yes, sir, thanks. back to the big board now we're down 250 points, okay? >> that's because the pmi is the weakest since 2009 and i think that took the algorithms down as well with that kind of headlines flashing through. stuart: because you get at that news right there at 10:00 when the dow was down 190, in came the disappointing news on manufacturing, now we're down 250. it's not a huge move by any means but a little further on the downside. market watcher john allison with us now. do you think that this is just a

blip, this downside move that we've gotten? it's just a temporary blip in the bull market run? >> short answer, yes. i think the market has been in a melt-up. yesterday was kind of a feeling of that. the problem with melt-ups is that they are euphoric, and some unexpected thing can come along and deflate them temporarily. the iranian matter was one of those unexpected things that has deflated. i think the iranian matter is fairly serious as far as the market is concerned because it effects many things not just energy and gold and interest rates and so on but it is a threat hanging over the market, not so much war, i think it's very very unlikely but the iranians have a strategy of being rather stealthy in their retaliation so there could be terrorist attacks, hostage and that kind of thing so that's what's bothering the market but in the end i think this is a buying opportunity because as one of your guests who i've known for many years, they said

there's a lot of underlying strength in the companies and in the economy regardless of what goes on in the political realm. stuart: yeah, ed jardanian made the point that if you look back over the years there have been other corrections and downside moves that were quite said but the market always bounced back. that's why this is now, to some, a buying opportunity, and you think it's a buying opportunity, and that the market really still wants to go up. you feel that way? >> yes, i do. i think the one thing i would say for your viewers as a professional investor is expect that we're going to have corrections. expect that we're going to have fairly violent ones this year because we've had an incredible 2019. expect that when they happen, you're going to be scared because it's always something you didn't expect, like this iranian thing for example, but in the end, unless there's some systemic problem, it is a buying opportunity, and you should stick with quality, avoid a hype , avoid themes just go for

the very highest quality businesses out there and they exist. stuart: we do have some degree of knee-jerk reaction here this morning. i'll show you the price of gold for a second. gold is up about $20, now $22, now 15.50 and of course the price of oil has gone up to $ 63.58 per barrel. there's a lot of flight to safety, knee-jerk reaction right now. you're just saying ignore it? >> good old ben graham, decades ago, talked about the market as a manic depressive and that sort of summarizes it and if you're dealing with a manic depressive you've got to keep your cool so know what you want to buy, sell, do and then in this case i would say there's lots of very very high quality merchandise in the form of great companies out there, some of which are at prices that make real sense. stuart: give me 20 seconds on whether or not we close up this afternoon. [laughter] >> i don't, that's not beyond

my pay grade but since you're asking i'm going to say no. i think you'll have a a little bit of correction. remember correction is healthy. you don't want the new years eve party to be going on, you know, for three straight days. it's very good for people to see that there's a downside. that makes the upside much much more durable. stuart: got it. john allison thanks for being with us appreciate it always. thank you, john. >> thank you, sir. stuart: president trump is indeed getting heat from some democrats for ordering that strike on the iranian general. he's taking some heat from the democrats on this. should they be glad we got rid of a man responsible for the deaths of hundreds of americans instead of criticizing the president? that would be my position. we'll ask that question. and we're watching the market, we'll have more "varney" after this. they're down but it's not that bad. back in a moment. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business.

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tweet just coming right at us here it is. the united states has paid iraq billions of dollars a year for many years. that is on top of all else we've done for them, but people of iraq don't want to be dominated or controlled by iran, but ultimately, that is their choice over the last 15 years, iran has gained more and more control over iraq, and the people of iraq are not happy with that. it will never end well. and more control over iraq and the people of iraq are not happy with that, it will never end. okay, i think we've got that tweet altogether. now, earlier this morning, adam schiff who chairs the house intelligence committee complained that congress had not been consulted about the killing of the top iranian general, qassem soleimani. now, mr. schiff is tweeting about it. edward lawrence in washington, what's the tweet? >> reporter: it's not just in the house speaker nancy pelosi also saying this attack endanger

ed american diplomats and troops around the world. here is the tweet from adam schiff the chairman of the intelligence committee. the tweet says soleimani was responsible for unthinkable violence and the world is better off without him but congress did not authorize and the american people don't want a war with iran. all steps must be taken to protect our forces against almost inevitable escalation and increased risk. now democrats trying to be present were also quick to criticize the president. senator bernie sanders tweeting this, trump's dangerous escalation brings us closer to another war in the middle east that could cost countless lives and trillions more dollars and trump promised to end the endless wars but his actions put us on the path to another one and just look at senator elizabeth warren saying on social media. soleimani was a murderer, and responsible for the death of thousands. she goes on to say but this is a wreckless move, escalates the situation with iran and increases the likelihood of more deaths in the middle east, our priority must be to avoid war,

another costly war is what she's saying so democrats have said they weren't only left out of the loop, but they worry about the repercussions of what may be coming. stu? stuart: back to just for a second, edward, back to common schiff, and has been widely accused of leaking all kinds of stuff, why on earth would the administration tell adam schiff in advance that they are about to take out a rotten terrorist overseas? >> reporter: and that's part of the reason they keep us close circle when they do actions like this, with any military action, because they don't want word to get out and then obviously, leak ed out either via social media or the iranians hear about it somehow and they would like to keep this operation secret going forward. he clearly is also upset he's been left out of the loop here, but you can't blame the administration, because of what's happened leading up to this for the fact that they kept this close circle as to this

actionable intelligence that they had. stuart: all good stuff edward lawrence thank you very much indeed appreciate it. let's bring in young americans for liberty analyst kristin tate i guess we should not be surprised at criticism by the democrats, but it seems like they are almost playing defense for iran, which i find extraordinary. >> yeah, i'm not surprised to see this at all stuart. the democrats are completely obsessed with taking out trump and they are using the situation in iran to try and do it. they know their impeachment efforts have hit a brick wall in the senate so they are sitting on these impeachment papers which have cost taxpayers millions of dollars because they know mitch mcconnell won't play by their rules. the democrats are not acting in good faith; however, i think americans are sick and tired of endless wars and nation-building and you know, targeted air strikes and maneuvers here and there really don't make america all that much more safe. it just puts us at risk of more pointless endless and costly

wars but having said that stuart , the democrats, they are using this and exploiting the situation to score political points and it's really quite hypocritical because elizabeth warren and bernie sanders, these are politicians with deep ties to the military industrial complex themselves. this is all about politics. stuart: but look, this general, as the president says, is responsible for the deaths of hundreds of americans. he organized all kinds of attacks on americans whether it's troops or civilians he was the man behind the a lot of this bad stuff in the middle east. how will president trump's base react to this? i have to think that they will approve taking him out. >> you know it's too early to tell. it's clear that this was an evil man; however, a lot of us in trump's base and in the libertarian space would like to see a declaration from congress before any act of war, but i really think the democrats are going to come out more hurt from this, stuart because the same

democrats who are using this news to take down trump are themselves, tied to the military industrial complex. stuart: okay, kristin, do you think that the president should have warned adam schiff, told him in advance we're going to take this guy out? do you think he should have done that? >> no, not necessarily. i mean, certain targeted maneuvers are okay depending on the situation and remember the democrats are no better when it comes to foreign policy. i mean, obama invited this same man to the white house in 2011. he welcomed him there, and then of course, we know obama funnel ed millions of taxpayer dollars to iran in the dark of night and then got caught for it , but what i want trump's base to remember is that the democrat s are not acting in good faith here. bernie sanders has happily accepted thousands of dollars in political donations from top defense contractors. he secured millions of dollars in defense earmarks, military

earmarks. elizabeth warren was never really against targeted air strikes until now, and in 2017 she secured nearly $140 million in military project s, spending for military projects in her home state of massachusetts. this is all about taking down donald trump, their intentions are very clear, and people see right through it. stuart: kristin, i have to tell you that i can not at this point , confirm that qassem soleimani was actually in the white house in 2011. i can not confirm that at this stage, but kristin, thanks for joining us. talk to you later. >> thank you, stuart. stuart: check the markets back again still down about 200 points, shortly i'll take you down to the new york stock exchange, where the traders are, is this just a blip in the bull market? we'll find out, next.

stuart: headlines coming in from overseas first off, macron of france spoke with putin of russia, what did they say? >> discussing the situation in iraq and macron says he should be refraining from anything and we also, by the way, heard from the top security body in iran and they say the attack of soleimani is america's greatest strategic mistake in the region and it will plague the u.s. , and also went on to say that iran holds the u.s. accountable for consequences of soleimani's assassination according to the top security body and this is on top of the supreme leader who says is valid for severe retaliation for this assassination. stuart: i guess that's to be expected from the iranians who have taken a hit here i would expect them to say things like that interesting though that macron is urging them to be restrained. >> refraining, and a lot of analysts say that maybe the severe retaliation might be the

target the 36 u.s. military bases and facilities nearby, you know, these are still worth being interpreted. stuart: well they've got a lot to go at if they do that for sure, thank you. back to christine at the new york stock exchange. what are the traders saying about this market move? is it a blip in the bull market or the start of a big downside move. it's the same question i asked you an hour ago what's the answer now? >> the same answer we're seeing dow down 230 points it's not like a 500 down day at the moment so right now, and i was just thinking of a trader to my left he wouldn't call this a by just yet. it's too soon. this is day one we just got this news, however on the flip side, kbw analyst i was reading their note that they sent off and they said this is a risk-off trade they believe financials, we know the financial sector is definitely getting hit. by because investors are moving their money into safe havens like gold and treasuries and that pushes up the price of treasuries, down for the yields

and that doesn't help banks so we're seeing some of those banks getting hit across-the-board look at that all most of them down 1-1.5% and i want to end on this there is a note where they track, it's a tracking firm and they said because of the heightened tensions, this it's very important to be paying attention to the straight of hormuz which is between the persian gulf as well as the gulf of oman, and that's potentially a target so they are paying close attention to the price of oil and we know it's at an eight -month high and definitely moving a lot of the oil & gas companies higher along with it but again, financials is taking a major hit and it seems like a lot of the guys are saying not yet. still only 227 points down. so it's not the huge by the dip moment. stuart: here in the studio we're speculating as to whether or not the market actually closes higher at the end of dad. we'll see christina thanks very much. kristina: thank you. stuart: we are monitoring the medias politicos coverage of the killing of iran's top general and the washington post called that military leader "the most

revered military leader." media watcher brent bosell fortunately is all over this for us. and he joins us, next. we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it - with hassle-free claims, he got paid before his neighbor even got started. because doing right by our members, that's what's right. usaa. what you're made of, we're made for. usaa

stuart: far be it for me to say, stability when you've got a down side move of 200 points but its been like this for the past half hour, down about 200 points earlier this morning we were down 300, at one stage we were down 180 and now we're down 210. check the airlines, please. the price of jet fuel is going up, and a lot of worry about international travel, so companies like delta, down 3% and southwest down 2%, jet blue is down nearly 3% the airlines let's say down. oil stocks, however, are going up, because the price of oil is

up this morning, you got $63 a barrel for oil, but exxon actually is down a fraction, conoco phillips is up a fraction , chevron is now down a fraction. i was expecting to see the oil companies, the stocks go up but that's not universally true. quickly, check the tech please. you got to check big caltech that's where the money is, and we are across-the-board, down in line with the market. apple is down, microsoft is down , alphabet is all on the downside there you have it the dow off 208 so now let's turn to the media. mainstream media reporting on the air strikes that killed that iranian general they call the shadow commander. brent boselle, media research center president is with us now. okay, you cover this stuff. this is what you do. tell us, what's the media saying about soleimani's death? >> yeah i think it's interesting because this is a

snapshot into the media themselves and what you're see ing across-the-board is a truncated trump did the right thing, but america did the right thing, but. he was a terrible person, but. they can't, they refuse. the media refused to award the united states the moral high ground in this fight between good and evil, this fight between those who believe in freedom and those who believe in terrorism. they just simply can't do it, and this, by the way, is not a new phenomenon. go back to 9/11, in the reuters report where they said that they were going to not use the term " terrorist" because they said one mans terrorist is another mans freedom fighter so this goes back to that point. the whole world those who believe in freedom are rejoycing america is wrapping its arms around donald trump. they are cheering in bag dead and yet in the united states

there is this sober reflection as to whether or not we did the right thing. stuart: now brent, i know you've seen it, the benefit of our viewers who have not seen this i want to roll some tape and show some headlines at the media's coverage thus far of the killing so roll that tape, please. >> millions of people in iran and in syria and in lebanon and israel are waking up this morning, very very scared in a region that seems to be one step closer to another war. this strike is fairly brazen, fairly audacious to a certain degree. >> right decision, wrong commander-in-chief. >> i am deeply worried he did not in corp. incorporate intelligence into planning this attack and in thinking about the repercussions. >> the president with his flag feet has certainly made this a u.s. versus iran event. grave concerns that there is no plan that there's no policy that this is another one-off act.

stuart: wait a second. did i hear that right? right decision, wrong commander-in-chief? did i hear that right? am i interpreting that correctly >> that's precisely the case and this, by the way, is the commander-in-chief, who has been so restrained and in some people 's views too restained in his reaction to terrorism since he's been in office. this is not a plane-throwing hand grenade-tossing crazy president we have. we have a very sober thoughtful president. this is something that was planned, that was considered, that was debated, and was agreed upon and you know, the flames were still flaming in that car, and you'll see, it's just this phenomenon. i've said it before. i've said it before, stu i'm sorry to interrupt. i've said it before on your show there's not a thing donald trump

will ever do for which he will be commended for by the national media, and you just saw him take out one of the most vicious horrific men on the planet earth whose got the blood of hundreds of americans on his hands and they still can't give president, this commander-in-chief the credit for putting an end to this man. stuart: now look at this, it's a headline from the washington post and it reads as follows. breaking news air strike at baghdad air force kills iran's most revered military leader. qassem soleimani most revered military leader. i find that extraordinary because the washington post no problem calling our president a racist, bigot and a liar, that he, the terrorist is a revered military leader. astonishing frankly. >> again speaking to the hundreds of people who have lost their lives i've talked to their

wives fathers mothers their brothers and sisters, their children. ask them what they think of this man, who killed, ask them if they think he's a revered religious leader. this is not the first time, that the washington post has done this. remember, when baghdadi was taken out, they called him a religious scholar. and then they also called him a conservative academic, and this guy was the founder of isis responsible for the death of hundreds of thousands of people. yes he was a religious scholar. stuart: i keep asking this question of media people. will this change. how can this go on? i simply can't believe that america's mainstream media is so overwhelmingly critical of our president to the point where they will call him names but call a terrorist a revered military leader. i can't believe this goes on.

>> it's one thing to talk about how they won't give donald trump credit for the economy, which they won't and how they attack him on impeachment which they have. but when you're talking about the existential war that is going on now between radical terroristic islam and the west, for them not to be able to take the position that we are the force of good and the west is the force of good, against the forces of evil, you can't take that position and that's a snapshot, stuart into the soul of the press and that's a dark side. stuart: you know, in the past, we've often cut you short, i've given you a minute or two less than i wanted to give you. today, we'll let you run and i'm real happy about it because what you had to say was just right on , son, right on. thank you very much for joining us. >> thank you, stewart. stuart: let's get back to your money, we're still down exactly,

almost exactly 200 points, that's back to look at the level , 28, 659 hardly a major sell-off. how about facebook. it hit as 52-week high. it's up in a down market. >> so if you think about this, if big tech is coming back that usually lifts most of the benchmarks since it is weighted to the big companies like apple, like facebook and google and as we continue on this positive trend we might turn around from the 200 points down. stuart: have you got another headline for us? >> yes, so this goes back to the assassination, and the arabia tv is quoting the u.s. special representative for iran saying that soleimani was planning an imminent attack against u.s. facilities and workers in iraq, in lebanon, so this is a preemptive strike to protect the lives of americans, and also u.s. facilities and assets in the middle east. stuart: that's what mike pompeo, secretary of state, told fox news earlier this morning, that

there was an imminent attack and the president ordered the killing to stop that imminent attack. good cause to do it. >> exactly. stuart: democrats on the hill obsessed the president didn't consult with them before ordering the air strike that killed iran's top general. some argue that it shows the president needs to be removed from office. will impeachment go forward despite tensions and fighting with iran? senator thom tillis joins us, next. most people think of verizon as a reliable phone company. but to businesses, we're a reliable partner. we keep companies ready for what's next. (man) we weave security into their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready.

stuart: that minus 200 points its been that way for the last 45 minutes, 28652. hardly a major sell-off after the bull run that we've seen recently. tesla, however on the upside very nicely, thank you very much indeed, they sold, they delivered 367, 500 vehicles last year and the stock is up $18. that's 4%.

big deal. record levels for that stock. how about general motors they sold more than 1 million crossovers in 2019 and over 1 million full-sized trucks, not helping them this morning in a down market, they are up just $ 0.90 that would be 2.5%. democrats, the leadership says the president left them in the dark about the air strikes that killed iranian general qassem soleimani. on the flip side, senator lindsey graham tweeted this. if i rain yankees aggression continues and i work for an iranian oil refinery i would think about a new career. [laughter] that's a backhanded way of saying watch out iran. with us knew, north carolina republican senator thom tillis who happens to be on the armed services committee. welcome to the program. good to have you with us. >> good morning, stuart. stuart: speaker pelosi and intel chair adam schiff complained today that the president left them in the dark about this

killing. do you think the president should have testified adam schiff in advance? >> no i think these sorts of sensitive military operations, the president has to keep things closely held. of course we'll be briefed on it and i think they acted appropriately and i'm very happy the president acted decisively against soleimani. he's the terrorist. he's been engaged in terror for the better part of 20 years and what occurred yesterday was just i think good for the united states and good for the meats region. stuart: you sir are in the united states senate where there is supposed to be a trial soon a trial of president trump on impeachment charges. are we really going to put this man on trial and maybe remove the commander-in-chief from office, are we really going to go through with this? >> well let's take that in two parts there's no way the president gets removed. the two articles of impeachment are ridiculous, the entire process in the house was a sham. pelosi is sitting on the message to the senate so that we can begin it. i think at the end of the day we

may have to take a week or two to process it particularly if we don't get agreement going into it, but i know how this movie is going to end and it's going to end this way, without the president's removal, because the house didn't do their work. they've been trying to impeach the president for three years and unsuccessfully executed anything and presenting anything to the senate that has credibility constitutionally we have to take it up but i know how it is. >> would you say that republicans, both in the senate and in the house and elsewhere are united behind the president? the president and secretary of state pompeo said look, have to do this, because this guy soleimani was planning another imminent attack. is the country winning? >> let's put this in context. we can talk about the maritime attacks and the things that iran has been responsible for for the past year or so but let's talk about what happened last week at the u.s. embassy in baghdad and

then talk about the chief terrorist for the iranian nation is about 15 miles away from that very same embassy do you think he's going there to deescalate things or going there to plot the next wave of tensions in that area putting american men and women and u.s. interests at risk? the president acted decisively because i think there was a clear and present danger that soleimani was able to move through iraq, that more americans could be put at risk, and our embassy could be put at risk. stuart: is there a danger that the iranians retaliate for this killing, and then we escalate by retaliating against the retaliation? in other words you get a tit-for-tat escalation which results in an out and oil military clash between america and iran. there is a danger there you don't want to see that happen i take it? >> well there is always that danger, stuart but let's take a look at the maritime attacks in the gulf of oman, the persian gulf, the attack on the arabian oil facility.

most of those went largely un checked but when we all of a sudden see u.s. interest put at risk like we did last week there has to be a response, there has to be a consequence because iran is going to continue to have these low level attacks in what they consider to be wins and they need to understand there is a proportion at response. i don't ever think that we'll act offensively. we'll do the first strike but iran needs to understand, our resolve in keeping a stable as stable as possible situation in the middle east but any time american interests are at risk iran needs to know they have to be held accountable for it. stuart: at some point today, one would expect the president to appear directly and personally and make a statement about this killing. it seems like there's a choice here. he could be in almost a celebratory mood, good riddance to this bad guy just as he celebrated almost the death of baghdadi, or he could say look, had to do it, we did this because he was planning another attack.

which approach would you favor? >> i think the latter is probably appropriate. there have been other opportunities to take soleimani out but there's never been an instance where he's a 20 minute cab drive away from the u.s. embassy going into an area where he has proxies putting american interests at risk. i think there was a clear and present threat to american interests, the president had the information, he acted decisively and we should applaud him for it but i don't think we should celebrate this moment but for the fact that maybe our men and women in iraq are a bit safer, we have to be ever vigilant and know the iranians will try and have some sort of response. the iranians need to hear from the president that there will be a consequence for any further escalation. stuart: senator thom tillis republican we appreciate you being with us on such an important day. of course we're monitoring developments of the white house and iraq after that air strike

killed iran's top general. the president is still in florida we haven't heard from him directly yet, personally, not heard from him yet. he is going to attend the public event this afternoon. if he speaks before then, you will see it, right here. that's a promise. the market still down, about 200 points. the dow is at 28, 661. more "varney" after this. liberts your car insurance, so you only pay for what you need. i wish i could shake your hand. granted. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ 1 in 5 people you meet wear yeah. that many! but right now, is not the time to talk about it. so when you're ready, search 'my denture care'. poligrip and polident. fixed. fresh. and just between us.

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stuart: we're down 200 points, been that way for about an hour now down 246 to be precise how about the s&p 500 about the same , well a bit less of a drop in percentage terms you're down about .7% there, it was down .8 on the dow, as for the nasdac, down three-quarters of 1% so you're down across-the-board roughly proportionately. defense stocks obviously going to be in the news today what do you got? >> we got lockheed andretheon still seeing gains up about 3% each and seeing a positive section and oil companies maybe not the majors but we have seen the apache, marathon oil seeing gains on the back of oil prices and specifically, north brent crude which is more of the international pricing of oil up to eight-month highs financial stocks down today because treasury yields have come down and people trying to get into safety plays, so 10-year treasury yield down to three-

week lows and that's dragging the financial stocks, but the big tech as you pointed out facebook hitting a new 52- week high, in a down market, and third upgrade by the way, a third highest upgrade for apple. stuart: i see, northrop, lockheed and raytheon doing very well today. that's great. my next guest says the threat of terrorist attacks and cyberattacks is dramatically been heightened by the death of qassem soleimani. jamil jaffer is with us former doj national security division senior official there. jamil if they come after us with a cyberattack, are we in a position to defend ourselves and retaliate big time? are we better than them at cyber >> well look, stuart obviously this is a real serious threat coming from iran. their response now potentially could be in cyber space.

they have done this before and come after us before and looked to create a capability. we've heard about them trying to get into u.s. critical infrastructure and it's real potential they take that capability to build up and leverage that for the attack against the u.s.. stuart: but are we better than them? can we beat them at that game? >> certainly stuart no question built on a military base but also cyber space we can beat this and they should be forewarned we would bring serious pressure to bear on them if they were to do that so they shouldn't be under any miss impression that we won't respond to that. stuart: what can we do to them? >> there's a variety of things stuart. the range of capabilities range from doing small things like taking out as you know small facilities, making systems in operable, changing data but you could also take down entire power grids and the like if that were something you decided to do now i'm not saying we would or should do that, but we have to be prepared to respond, and one of the things we have to think about is you don't only respond

in cyber space if there's a cyberattack. someone could respond in real space and perhaps we should do that to make clear that if they took a major attack against us say against our electrical grid or against our financial system or healthcare system, that we would be one response even in physical space to activities, and that's how you have to turn to cyber space by responding aggressively and creating a collective defense system by share information with ourselves between government and private sector. stuart: i'm just interested in the idea we just shut them down. you've come after my electric grid and i'll come after your whole country. could we do that? just shut them down completely? >> well i think certainly the u.s. has the capability if we chose to do that to dedicate that kind of systemic resources and it would take time and effort to enter an operation of that nature but if we wanted to the iranians should be aware we have that capability and we'll use it if necessary. stuart: good that's what i wanted to hear that we can and will do it if we have to. thanks for joining us we appreciate it, sir, important day. >> thank you. stuart: we're monitoring

developments out of iraq after the u.s. air strike killed iran 's top military leader. i say the democrats are urging the white house to go easy, on a terror state. i'll deal with that in my take coming up shortly. right now, the dow industrials are still down, those 240 points , its been that way for some time, down 239 right now. not the huge sell-off that we were expecting a few hours ago. >> well we have 400 points down in the pre-market so we've come back from this, but don't forget most of the action will take place in the final hour of trade and we can check, a good check of investors and whether or not they are willing to hold risk. stuart: you still think we might close up? >> yes, i do. stuart: good for you. all right, my take, next. the third hour of "varney" coming your way. ♪

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stuart: we are coming up on 11:00 eastern time here in new york city. the big board still the same, down 200, 240 points. now, i think in five seconds, we are going to get the latest on oil, how much we've got in storage, how much we drew down. that might make a difference to the price of oil, which of course is very much in the news right now. $63 a barrel, up two bucks. that's because of the overnight killing of a major terrorist in the middle east, and that did upset the oil market to the tune of $2.26. now, have we got the number? we are waiting for it. lauren: down 11.463 so a steep decline in oil inventory. stuart: let me explain that. that means we drew down a whole lot of oil, demand for oil was very strong, we used a lot of oil. that would tend to put the price up because if you've got less in supply and demand is strong, up

goes the price. i haven't seen any real movement -- a couple of cents there. still up 2.25? lauren: we had the weak manufacturing report. if industrials are weak, that could suggest less demand for oil. with this data, the price of oil -- stuart: strong demand. if you draw down 11 million barrels of oil, that's a strong demand. lauren: the price isn't moving that much. stuart: no, it isn't. lauren: with all that's going on. stuart: it hasn't moved at all. so now this. the administration says qassem suleimani had organized the attack on america's embassy in baghdad and was planning more attacks on americans. that's why the president authorized his killing. mr. trump no longer reluctant to fire on iran in anger and one of the world's principal terrorists is dead. in the mideast, that is a game changer. the man who led iranian terror throughout the region and indeed, throughout the world, is gone. it is a symbolic and real hit to

iranian interests. the ayatollahs are already reeling from economic collapse and civil unrest. they are out of money, can't export much oil, they have fallen back on aggression, and now that terror thrust -- that terror thrust has been decapitated. this is hard line trump. it puts the democrats in a bind. most acknowledge that suleimani was an enemy, but they are worried about escalation. bernie sanders calls it dangerous. senator warren says it's reckless. joe biden says it's like throwing dynamite into a tinderbox. they are urging the president to go easy on a terror state. republicans are largely supportive of suleimani's killing. he was planning an imminent attack, according to mike pompeo, so the president ordered him taken out. that is the politics of this. the financial side, difficult to figure out. what concerns investors is the possibility of tit for tat

retaliation that escalates into a new regional war, with american forces in the middle of it. we simply don't know how this plays out. one thing remains to be seen. what will the president say? will he celebrate suleimani's killing as he did with baghdadi or will he say he reluctantly took the action to save american lives? what he says will make quite a difference to the politics of this and the financial impact. let's go to blake burman about the tweets we have already received from the president on this. what do we have? reporter: yeah, some that have been directed at iran, some that have been directed at iraq. let's of course start with iran and the president describing, explaining his decision today to authorize that air strike that killed the top iranian general. here was the tweet this morning from the president. general qassem suleimani has killed or badly wounded thousands of americans over an extended period of time and was plotting to kill many more but

got caught. remember, secretary of state mike pompeo earlier this morning as well said there was an i immenency to the plots. as it relates to iraq, we know suleimani was taken down inside of that country and iran is trying to expand its interests within iraq. the president tweeting quote, the united states has paid iraq billions of dollars a year for many years. that is on top of all else we have done for them. the people of iraq don't want to be dominated and controlled by iran, but ultimately, that is their choice. we should also mention, stuart, back here in washington, the u.s. state department has told u.s. citizens and residents to get out of iraq. the state department tweeting that quote, u.s. citizens should not approach the embassy. we urge citizens to depart immediately. that warning is on top of other travel warnings that have been in place before this. stuart: blake burman at the white house, thank you. secretary of defense --

secretary of state mike pompeo was on "fox & friends" this morning. roll tape. >> we took a very different approach. we didn't send piles of cash to the iranians. we didn't pay for hostages. we didn't create a deal which would have given them a clear pathway to a nuclear weapon. we have taken a very different approach. we believe it's the one that will ultimately lead to success and stability in the middle east. stuart: look who's here this friday morning. "fox & friends" weekend cohost and major in the 101st airborne, if i'm not mistaken. >> i was. i was. former life. stuart: you took your uniform off. >> now i wear makeup and talk to you. stuart: great. this is hard line trump. >> absolutely. stuart: but reluctantly hard line trump. >> of course it is. this is clarity. this is courage. and it is most certainly reluctance but it is also the idea if he had not acted the way he did with all the information, the evidence at his disposal, what if benghazi 2.0 had

happened? you have to remember, embassies are sovereign american soil. they might as well be here in new york city. embassies are sacrosanct. when you send people to invade them, you are effectively invading american territory. when terrorists looked at what happened in benghazi under the obama administration, they looked at weakness. president trump decided we will never project that. not only will we send marines but we will send the 82nd airborne which they knew this strike on suleimani was coming when they decided to make that deployment. it looked like a lot in the moment but now it makes complete sense. they had decided iran was going to be struck and listen, everyone is talking about the retaliation. know what i'm not worried about right now? retaliation from iran. you know who's worried right now? iran, tehran, the mullahs, the ayatollahs, the folks now on their heels because they are hurting at home, through economic sanctions, there's political discord and their vision of spreading shiite islamic radicalism around the globe has been undercut big-time. suleimani is the leader of that.

they can't project power. i will be surprised if they can hit us the way all the haters and spectate laors are saying. stuart: i have other news to divert away to for a second. do stay there. the richmond fed president says a recession is not inevitable. i'm going to see if that has an impact on the big board. edward lawrence has more details for us. reporter: yeah, he's pointing to australia which has not had a recession in 27 years. the speech being delivered right now, thomas barkan says expansions do not die of old age, they die of heart attacks and he sees no indication of heart disease in this economy. he says the labor market is very strong, wage growth is important because it's kept consumer spending strong and that's keeping the economy going. he said that when uncertainty goes away, business investment will pick up and that is what we have started to see possibly with usmca, the uncertainty going away there, a phase one trade deal with china, the uncertainty going away there,

and brexit coming up. once those three sort of get knocked over, that business investment, he believes, will start to pick up and boost the economy. stuart: edward, i thought we might have some more reaction to that on the stock market, but apparently not. we are still now down 260 points. i want to bring in former chase chief economist anthony chan with us here in new york this morning. what the richmond fed chair had to say doesn't seem to have done anything for the market at all. not even a blip in the market at all. let me talk to you about what happened overnight, the killing of suleimani and the reaction on the stock market. is this just a temporary blip in the bull market, or do you think it's going to send stocks down for a long period of time? >> i think right now investors are thinking this is a temporary blip. if we get some sort of retaliation which we all hope and pray we don't, the market continues to go because the fundamentals are good. there's no disagreement that

economic growth decelerates as an expansion proceeds. we have 2.9% two years ago of growth, 2.3% last year and this year, we will get something around 2%. it's natural. but the expansion continues. stuart: do you get the feeling the market just wants to go up? >> oh, there's no question, because the response was very muted. what you see is yes, some of the safe havens, you had gold prices going up, you had bitcoin going up, you had the japanese yen strengthening, you got a little boost in the u.s. dollar, so all those things are there but the reaction has been very muted. that means that wall street is not convinced that this will be a death blow to the economic expansion. stuart: i'm interested in how it affects us on an everyday basis. the only thing that i can think of is the price of oil is up to $63 a barrel. so the continuing decline in the price of gasoline is probably going to come to an end and we may be paying just a little bit more per gallon in a month or so time. that's about the only impact that i can see directly on people like you and i.

>> that's certainly a good point, but the good news is that compared to 20 years ago, now when oil prices go up, we of course are producing more oil so we benefit from it. not like in the old days, when higher oil prices hurt the consumer. they don't help the consumer but we also get offsetting benefits from the producers of oil. so it doesn't have the huge net hit. now, at the same time, though, to the extent that oil prices go up too much and hurt consumer confidence, that can take some of this stellar shine out of the top performer of the u.s. economy, consumer spending, but it's certainly too early to say that. stuart: got it. thank you very much indeed, sir. good stuff. hegseth, stay there, please. you ain't done yet. president trump taking a hard line stance ordering the air strike that killed the top iranian general. the media wasted no time expressing their so-called deep concerns. watch this. >> right decision, wrong commander in chief. >> i am deeply worried that he did not incorporate intelligence

into planning this attack and thinking about the repercussions. >> the president with his flag tweet has certainly made this a u.s. versus iran event. stuart: can you believe that? was i hearing things there? the man said right decision, wrong commander in chief. outrageous. coming up, i will calm down and i will ask trump 2020 national press secretary kayleigh mcenany if this is actually a good thing for our president. and 2020 hopeful elizabeth warren is calling trump's decision to take out suleimani quote, reckless, despite being behind the killing of hundreds of americans. we are all over it. pete hegseth is staying with us. that's a promise. back in a moment.

stuart: as you know by now, i'm sure, u.s. forces took out top i

iranian general qassem suleimani days after he coordinated the attack on our embassy in baghdad but 2020 democrats are already quick to slam the president's actions. take a look at this. senator warren tweeted this reckless move escalates the situation with iran and increases the likelihood of more deaths and new middle east conflict. our priority must be to avoid another costly war. pete hegseth, still with us. what do you make of that? >> i think looking at the markets right now, we were talking about this earlier, the fact they are only down this much means they know president trump doesn't want another costly war. part of avoiding costly wars is strength up front, is deterrence, is letting your enemy know if they mess with you, they are going to die. not just the rank and file, not just 25 on a base which we did as the first response but if you are going to go at our embassy, your top dog, your effectively number two in your country who you thought was untouchable, who would walk out in public and had the bravado to say not only will

i arrive in baghdad but i will help lead protests and attacks against americans as i have on the battlefield for the last decade and you can't touch me. donald trump said huh-uh, wrong gamble, and they have been talking smack out of tehran about america, about how we won't do anything about this, as they continue to try to move forward for a nuclear bomb. this is precisely the signal the elites, they don't get it. they think that weakness and talking and playing the guitar is what makes our enemies respect us. ultimately, no, it's moves like this with people like kim jong-un watching this, other people stepping around around the globe saying wow, when donald trump hints that something might be coming, it might be something of real significance and we might need to think twice about where we step next. stuart: i will give you another tweet from another presidential hopeful and that would be mr. yang. he says this. this decision highlights the need to get donald trump out of office. we need better decision making in the white house that does not escalate violence but instead,

invests in diplomacy to achieve our national interests. well, i know you will discount that entirely, so let me change the subject just a little here. what about impeachment? are we going to put this president on trial and maybe remove the commander in chief from office in the middle of all of this? >> no, we're not. it's an academic exercise. but andrew yang has talked about how automation has displaced jobs, how donald trump has been right about blue collar americans and their jobs. what qualification does he have to be commander in chief? you think the world would cower at elizabeth warren as president of the united states or maybe socialist bernie sanders, the guy who honeymooned in the soviet union, who has been cozy with enemies for the last 40 years? donald trump walked into office with clarity saying i don't want to fight endless wars that don't get us a return on investment. at the same time i hate terrible deals and a bad deal like the iran deal, what was it for, diplomacy. ben rhodes and your ivy league

types who have theories about engagement and that's going to bring us to a more peaceful future so we dropped some cash and let them steal our sailors in the persian gulf and shoot down drones. how well has that worked? not at all. donald trump said new sheriff in town, we're not going to take it. let's watch how the world reacts to this but know what we should not do? cower because iran might retaliate. i would like to see them try. i have gotten e-mails and texts from friends in service all across the world that says that's the last thing we should be saying, oh, no, iraq's going to do something. iran should be worried today that maybe we will do something again. maybe your second general is next if you continue to try to kill americans. we are the top dog. you respond to us, not the other way around. stuart: bring the fire, hegseth. >> i'm fired up. because the president brought the fire, as a leader, you want your leader to reluctantly be strong and that's exactly what the president did here. kudos to him. stuart: hold on. stay there, please. i'm just going to check a couple

stocks in this market. look at apple. retreating from the $300 per share mark that it hit yesterday but that's not much of a retreat. $298.42. tesla going the other way. they delivered 367,500 vehicles last year. that's a lot, more than expected. the stock is up in a down market. they are up 4%. new high earlier at $448. overall, we are still down roughly 200 points. that's where we are now. 28,616. congress may be out of session but that's not stopping the democrats from attacking the president. will they do anything, including defend a terrorist, to make sure trump doesn't get a win? i'm asking that question of everybody. more "varney" after this. when we were looking for a roommate, he wanted someone super quiet. yeah, and he wanted someone to help out with chores. so, we got jean-pierre. but one thing we could both agree on was getting geico

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stuart: this is the day when you will see a little flight to safety. you getting that with gold? it's up $22 an ounce at $1551. you are also seeing it with united states treasury securities. they are dead safe so the money flows in and as the money flows in, the yield goes down. that's an indicator of progress towards safety. do show me, please, the defense

stocks, because i'll bet they are moving big-time today. i think they are. show them to me. show them to me, please. northrop grummon on the upside. lockheed up 3%. i want to see raytheon as well, please. i think we have big gains there. when you get that organized, i will know. pete hegseth still with me. raytheon is a drone play. >> raytheon makes a lot of the drones we use, whether the predators, the reapers. stuart: look at that. >> we don't know yet precisely what system was used in this, but listen, the proliferation of drones and remote technology and our ability to use them in realtime, you still need intelligence on the ground, but again, the market doesn't believe we are about to move into a shooting war but if you want to avoid a shooting war, you need the type of unmanned systems -- stuart: if you do get into a shooting fight of some sort, you need their system. >> they are kind of winning either way. stuart: quick check of the airlines, please, because they are big losers today.

there is the threat to international travel which doesn't help the airline stocks and of course, jet fuel prices are rising. that's what you've got there. delta is down, southwest down, jetblue is down. this is a travel problem, isn't it? lauren: this could be a travel problem. we also have to, as you talk about potentially iranian provocation, what they have done in the strait of hormuz, that's basically the only way you can get oil out of that area, by sea, to the rest of the world. i know we don't need the oil right here in the u.s., but other countries do need that oil. so it handles a lot. if they are provocative towards that shipping channel and to other countries' shipping, that could be a major problem for the oil market and the airlines. stuart: look at the big board. back to a down side move of 230 points. it's been this way for about 90 minutes now. 28,600 is where the dow is. iranian leaders vowing to retaliate after the killing of suleimani but secretary of state pompeo doubling down on the trump administration's decision. watch this.

>> we had an important set of underlying reasons to take this track. it was wholly lawful. we are not only confident we got it right legally but we got it right strategically. stuart: an imminent attack was coming, they stopped it. former state department official christian whiton will be with me next as well as senator kennedy, the louisiana republican. i bet he's fired up about this. more "varney" next. it's been reported that there's a cyberattack on business every 39 seconds. ouch. i don't even want to think about it. comcast business has a solution. we go beyond fast with a cloud-based security system that automatically updates, so you always have the latest protection. phishing. malware. risky sites. it can help block all of that. it's one less thing for us to worry about.

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stuart: same old, same old. down 230 points on the dow industrials, 28,600, that's where we are. i want to bring in market watcher david nicholas. he's with us this friday morning. david, answer the question i have asked all morning. is this a temporary blip in the bull market, or the start of a long-term down trend? which is it? >> it's a temporary blip if two things happen. here are my two ifs. if there's no more u.s. casualties and if china doesn't get involved. if those two things don't happen it's temporary and will be short term. china i don't think wants to get involved militarily but they could do it in somewhat of a side ways nature that could delay the signing of phase one deal next week, so i think that's what we need to be watching for the market. stuart: that's purely speculative. i mean, that's purely

speculation about whether or not china might do this, that or the other. they are highly unlikely to get involved in this, surely. >> but stuart, you got to remember just the past friday, russia, iran and china all did joint naval exercises. there is i think this idea that iran is looking to china to maybe give some influence on u.s. foreign policy. i don't think we can rule that out. but the red line was drawn and that was american lives. iran crossed that red line, we responded appropriately. i do think there's this narrative that we shouldn't confront bad actors like iran because of what they may do but we shouldn't be concerned about what they may do in response. we should be concerned about what they may continue to do if we don't confront them. but the silver lining for investors, as long as this stays limited to that region, i don't think we will see a big blowback to the global economy or the markets in general. stuart: would you advise your clients who might like to take a little risk, would you advise them to buy today, just look around and see if there's any

bargains? >> if i'm telling my clients to buy today, i'm buying defense. i know you mentioned that earlier but even if you take the geopolitical risks of iran aside, i think this is going to be a good year for defense stocks, period. you had an increase by $20 billion to the defense budget, a company like lockheed martin just got a huge contract for their f-35 program. i think this is a day if you are going to buy, i still think there's upside for defense stocks. so if you are looking to buy, that may be a sector i would look at. stuart: we have been speculating and it is just speculation, that at the close of trading today, the market will actually be up. some of our guests have said yeah, there's a shot at that. what say you? >> i would love that to happen but i'm going to say monday. we got to get past the weekend, put this behind us. monday will be an up day for the market but today and tomorrow you will see volatility. stuart: i think you're right. thanks for joining us. we appreciate it. thank you, sir. >> thank you, stuart. stuart: now, secretary of state mike pompeo, he was on "fox & friends" on the fox news channel

earlier this morning. listen to what he had to say about the air strike. roll it. >> the military commander who was actively engaged in plotting to kill americans in the region, we had an important set of underlying reasons to take this strike. it was wholly lawful and we are confident that we not only got it right legally but we got it right strategically. stuart: good reason, wholly lawful, right strategically. the man on the right-hand side of your screen is christian whiton, former state department official. is the secretary of state right? do you approve of what the president ordered? >> absolutely. it's about time a president pushed back on iran. really, donald trump is the first american president to do so with strong resolve. iran has gotten away for years with kidnapping americans, killing americans, taking americans hostage, and this man in particular is responsible for the death of hundreds of americans. so frankly, i think it's overdue. it's about time and it's a good thing. stuart: the democrats are saying watch out, we don't need an escalation, we know we are going to get retaliation, we should be

much more cautious. elizabeth warren says the action was reckless. what do you say to the democrats here? >> yeah, well, they have been counseling that all along and that's why iran has perceived correctly that it's been pushing on an open door and things keep getting worse and worse, and eventually you have to fight back against people like that. so what the democrats are counseling is echoing iranian talking points would lead to more american deaths. by hitting the iranians now and i hope we continue to push against them and keep them on the defensive, it will save more american lives in the long term and lead to more stability in the persian gulf. stuart: pete hegseth, christian whiton is saying almost exactly what you had to say two minutes ago. >> absolutely. the criticism that this is reckless or knee-jerk, quite to the contrary. if you remember in april of this year, this white house specifically dedicated the quds force, the islamic revolutionary guard, a terrorist organization for the first time. hm. maybe they were thinking about taking an additional step. maybe they waited until

provocations so as necessary, until intelligence lined up to the point we knew where suleimani was, not in russia, not in iran, not in syria, but there he is caught dead to rights in baghdad, as americans are under threat at our embassy. one, two, three, the stars aligned. he should have been dead a decade ago anyway. he's already designated as a terrorist. when they say knee-jerk or throwing dynamite into a tinderbox, they should be careful about the criticisms they are throwing out. president trump might know who our enemies are and put them in a troop. stuart: thank you for being with us. always appreciate it. thank you, sir. i want to bring in senator john kennedy, republican from the great state of louisiana. mr. senator, thanks for joining us today. this is a very important day. i want to ask you this question. congressman adam schiff, who chairs the house intelligence committee, has complained that president trump did not bring him in to the circle of people who knew about this strike that was going to take place. he was uninformed. he was left in the dark.

do you think the president should have informed adam schiff about what he was about to do? >> i think -- i think chairman schiff should fill out a hurt feelings report and let's move on. we've got more important things to deal with here. we don't have a lot of facts so it's important that we concentrate on the facts that we do have. number one, suleimani was a butcher. i'm glad to be able to refer to him in the past tense. number two, i take the president and the secretary of state at their word that this was a preemptive defensive strike. number three, we will be briefed, we meaning the senate, will be briefed next week. it will take probably a nanosecond for the information we receive to leak. so the american people will know. number four, i think we have to

accept if not a fact, a pretty good prediction that iran will retaliate. we don't know how. it may not be a military strike. it may be a terrorist strike in another country. it could be through cyberterrorism. number five, this day has been coming. the united states of america has demonstrated enormous restraint in the face of almost weekly, some would say daily military provocations by the ayatollah and this day had to happen. and the final point i will make, we need to be measured in our responses but we can never forget this fact. weakness invites the wolves. weakness invites the wolves. that's all the ayatollah understands. stuart: let me move on to impeachment. the trial is supposed to begin i

guess in a couple of weeks. i'm not sure of the timing, but probably in a couple of weeks. are we really going to put the president of the united states on trial and risk the commander in chief being removed from office? where does all this leave impeachment? >> that's up to speaker pelosi. i have said before that she is -- she's saying that she won't allow us in the senate to do what we really don't want to do unless she approves of how we do it, and that's her call. i mean, i think that she has moved from folly to farce. i think most americans, particularly in light of what has happened in the middle east, understand that right now, we don't have time for this folly to farce cluster event b.s. politics, but if the speaker

wants to continue to play her games, then i think that we should ignore her and go back to work and deal with the crisis in iran and other more pressing domestic issues but it's up to the speaker. i have been disappointed in the fact that she has put appetite and ambition ahead of knowledge and wisdom but i guess that's her right as an american. that doesn't mean i have to agree with it. stuart: understood. understood. do you think the people of louisiana support hard line trump in this issue? >> i do. i do. and i think the country needs to. i think we have to accept the president and the secretary of state at their word. let me say it again. this day was coming. now, iran has been poking us and our allies in every way it possibly can, and you know what,

iraq, it's time for iraq to pick sides. iraq, there's no way that the iranians could have stormed our embassy without the cooperation of the iraqis. it's time for iraqis to stand up and pick a side. stuart: mr. senator, thank you very much for joining us today. i know you took special time to be with us and it is much appreciated. senator john kennedy. thank you, sir. >> my pleasure. stuart: yes, sir. thanks very much. now, we have not yet heard directly and personally from president trump. he's in florida and he will be attending a public event this afternoon. if he speaks, again, publicly and personally, before then, you will see it on this program. as for the mainstream media, lost their mind, it seems like. one pundit says that killing of the iranian general was the right move but the wrong commander in chief. i'm astonished that anyone would say that. that comment and some of the other nonsense that they are spewing, next. we will get reaction from the trump camp after this. i'm your 70lb st. bernard puppy,

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stuart: members of the media, very quick to slam president trump for killing that iranian general. better take a listen to this. >> millions of people in iran and in syria and in lebanon and in israel are waking up this morning very very scared in a region that seems to be one step closer to another war. >> this strike is fairly brazen, fairly audacious to a certain degree. >> right decision, wrong commander in chief. >> i am deeply worried that he did not incorporate intelligence into planning this attack and thinking about the repercussions. >> the president with his flag tweet has certainly made this a u.s. versus iran event. grave concerns that there is no plan, that there's no policy, that this is another one-off act. stuart: grave concerns there was no plan, no policy?

kayleigh mcenany, trump 2020 national press secretary joins us now. you heard all of that. i picked up on that statement from the gentleman who said right decision, wrong commander in chief. i can't believe someone would say that. >> yeah, that's rather bizarre. so it's only wrong because president trump did it, otherwise it's the right decision. that's nonsenseical. if you are against killing a terrorist who was described as the most powerful terrorist on the planet, designated a terrorist by obama in 2011, if you are against that, you are on the wrong side of history. this was a display of american strength. he was resolute. this president sent an unmistakable message that if you attack americans, there will be repercussions. the media is on the wrong side of history here. stuart: let's take a look at what joe biden had to say and i will quote directly here. president trump just tossed a stick of dynamite into a tinderbox and he owes the american people an explanation

of the strategy and plan to keep safe our troops and embassy personnel, our people and our interests, both here at home and abroad and our partners through the region and beyond. kayleigh, there seems to be a reluctance to go after a major terrorist and that's the response of presidential candidate. this is mamna from heaven for you, isn't it? >> it absolutely is. that's a rather strange statement to come from joe biden, of all people, who was on the wrong side of every major foreign policy decision of our lifetime. don't take that from me, take it from bob gates, who has said that. it was joe biden who was against the osama bin laden raid, joe biden who said china's not a threat, joe biden who was against -- who was for, rather, the iran deal, that disastrous deal that president trump unraveled. he's been on the wrong side. joe biden needs to take an inward look. we would be a lot worse off in this world if joe biden were ever president of the united states. stuart: one more from

representative ilhan omar. she accused president trump of creating a quote, distraction, like he needs a war, therefore, he needs this distraction from i guess from impeachment, all the rest of it. your response to that, please? >> what does he need a distraction from, the hottest economy in modern history, a brand new trade deal, the u.s. mexico canada agreement, paid family leave for federal workers, prison reform? we don't need a distraction at the trump campaign. we are very happy with the direction this country is going on. if ilhan omar really needs to pause and ask herself why she would be so fervently against the killing of one of the top terrorists on this globe. stuart: kayleigh mcenany, i kept it short and i apologize for that but thanks very much for being with us today. much appreciated. pete hegseth, still with me. seems like you are in agreement with me and just about every one of our guests. >> yeah. distraction, you remember when the obama administration blamed the attack on our benghazi embassy on a youtube video in susan rice went to all the sunday shows? want to talk about all the

distraction and deflection away from responsibility? i think jonathan altar said wrong commander in chief -- right decision, wrong commander in chief. stuart: was that him? >> they would rather have the right commander in chief, hillary clinton, that makes all the wrong choices. that makes them feel better about themselves but they had to take the medicine of the wrong commander in chief in their mind who is making all the right decisions. people understand the commander's intent. the troops understand it. regular folks understand it. if you have common sense, you understand our enemies should be in the grave rather than out there trying to kill our service members. it's the elites in these studios that still can't handle the fact that he's commander in chief, still think their sophisticated negotiations are going to work that haven't worked, that don't get it. he will take this all the way to the bank and troops will love him even more for it. stuart: we will pursue this theme. by the way, the dow has come back a bit. now we are down exactly 200 points. leaders of the democrat party, upset that the president didn't consult with them before ordering the strike that killed the iranian general.

some, elizabeth warren, called it a reckless decision. chris stiwalt will join me in a moment. did the president need their permission first? did they? we'll be right back. ♪ ♪ ♪ everything your trip needs for everyone you love. expedia.

stuart: throughout the program, we have been covering the

response to the president's killing or indirectly the killing of an iranian general. democrats appear to disapprove of what the president did. elizabeth warren calls it reckless. saying -- some of them saying look, here comes retaliation, we don't want that. fox news politics editor chris stiwalt is with us. i don't see why the democrats are cautious about the killing of a known terrorist. i can't believe that caution works for them politically. what say you? >> depends on what happens from here. 80% of the country was in favor of the iraq invasion in 2003. by the time it was over, it was even less popular than the vietnam conflict. it just depends on how it goes. it depends on whether it works or not. it's impossible to say at this point what the political consequences of the president's decision here are going to be, because it depends on how this plays out. so there's no way to say. stuart: but was the president right or wrong in taking out a

known terrorist who was known to be planning more attacks that would kill americans? i mean, you've got to say -- you've got to make the judgment was he right or was he wrong? >> oh, my goodness, i don't know. there are lots of people who we could kill. we kill a lot of people. we should point out, the united states kills a lot of people. under the obama administration, under the trump administration, bush administration, drones fly, bombs fly, the missiles fire. we kill a lot of people. but i'm sure there's other people that are deserving, maybe even as deserving as this cat, that we could kill. i have no idea -- stuart: wait a minute. this is a guy who just organized the attack on the american embassy in baghdad. i mean, he organized it and he was in baghdad. he was on the road to the airport, for heaven's sake. this iranian general in iraq. he's not just some guy off the street who we might want to kill. he's the number two guy in iran who's been killing americans for a long long time.

>> stuart, if you have any questions about the iowa caucuses, i know about that. in terms of which terrorist we ought to kill on which given day, i got nothing for you. stuart: let me ask you about the february the 3rd iowa caucus. how is the killing of suleimani affect the iowa caucuses? >> not at all. democrats don't care. this is not their issue set. international affairs, this kind of stuff, the only thing that there's broad consensus among democrats is that whatever donald trump is doing is wrong. they will all agree on that so that's an easy position for them to take. there's not -- it's not like there's going to be pushback. there will be some jockeying here. there is probably some consequence, second and third order consequences for biden, pete buttigieg has been looking for a way to get after biden for his support for the iraq invasion. he's been trying to dust him up a little bit there so this could maybe bring a little of that out but this is not -- this will not be a big issue for democratic

caucus goers in february. stuart: let's bring back down to earth here. at the end of the day, i don't know where the end of the day is, but is our country, is this country behind this president with what he did last night or against him? >> if you took a snap poll, you probably would see support for the president because as you say, do you support killing this dirtbag, yeah, okay, killed a dirtbag, have a slice of birthday cake, rah, rah, rah but what matters politically is over the long term, does this lead to success for the united states or does this lead to setbacks for the united states. with foreign policy stuff, you never want to make a snap decision, what looks good today could look bad tomorrow. what looks bad today could look great tomorrow. you just don't want to say. stuart: all right, chris. i will go with that. thanks for joining us. if you're not careful, you'll be back. see you again soon. we will see you before the iowa caucuses. it has been one extraordinary show, has it not? by the way, we are not done. more "varney" after this.

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stuart: see? we're coming back a bit. the dow is down 192 points. when i got out of bed this morning a little bit before pete hegseth that is, it was 2:30 in the morning and the dow is down 350 points. we opened the market the dow was down 300 points and now it's back 193. do you think we might close higher? >> a varney rally? you are the notre dame of fox business. you've seen this before, right? it's what looks like bad news actually could be good news, the market reacts initially, will there be in stability? well actually there was a plan, dead tariffs is a good thing maybe it rebounds my money is on you. stuart: lauren do we end the day higher? lauren: no, but i'm hopeful for monday. you're going into a long weekend , volumes have been good despite it being a holiday week, right? low of the day 368, high of the day we're close to it.

down 167. stuart: hope springs eternal we'll turn this thing around but pete thank you very much. pete: my pleasure. lauren: happy weekend. stuart: my time is up but neil is back. neil: all right thank you very much stuart. you think about it stuart even on the worst levels of the day we were down a little bit more than a percentage point. we were down in excess of a percentage point in the european markets a lot finished from a quarter to a half a percentage point down. ditto asia so it seemed like the markets worldwide to pete's point are reassessing this saying let's take a chill pill and calm down, of course they didn't say that but i have a feeling they were thinking it i want to thank connell mcshane and blake burman who were doing a bit too good of a job in my absence. could have taken friday of but said better not. take a look at this and the reaction right now. we have oil actually trending up but not as you'd think yet gold rallying this typically happens, the stock market