we wish you a very happy new year, everybody. i will be back at 5:00 p.m. eastern today with "bulls & bears" to recap this wild year in stocks. what we say is going to happen in 2019. here is the man who handed me this channel, about two hours ago, charles payne is back with us. charles. charles: new year's eve version of tag, i love it. david: thanks, charles. charles: good afternoon, everyone, i'm charles payne. this is "making money." coming up the market trying to end the final day of the year in a positive note. where you should be putting your money in 2019. pushing markets higher right now, new reports that the united states and china ironing out toward as framework of a trade deal. really great sound on both sides. president trump tweeting over the weekend he had a very good conversation with president she. decides trade, what are the potential risks to the economy and the new year. my experts way in on that and much more on "making money".

charles: of course, wouldn't offset the losses of december which are the worst since 1930s, maybe knit 31. this is positive fact in the last two trading sessions going into 2019. we have kevin kelly. chief investment officer and fox news contributor, scott martin. let me start with you, kevin. after christmas, pretty amazing sessions. we had one of the best intraday reversals on friday. picking it up today. i know influenced by light, not everyone is around, there were a couple times in those days we were breaking down again and we didn't collapse. >> it was pretty interesting to

note, we almost hit a bear market. we were at 19.8% down which would be a full correction but it is pretty interesting to note we are starting to see steady hands are coming through. what valuations are necessary for next year? should we strayed at 7 pe or 15 pe? later this week we'll get better indications to get the data we need such as the purchasing managers index on thursday. david: isn't it interesting, kevin, early in the year maybe 20 pe, 21 pe, 22 pe. so the dynamics certainly changed a lot. >> there are certainly shifting dynamics but one of the dynamics that remained resilient throughout the entire year is the consumer this is hauls been a business climate situation, we talked about the stronger dollar led to headwinds, latter half of this year, what happened in the european economies. how that impacted business with italy and brexit. the consumer is remaining

strong. that is why you're getting an underlying bid. we saw holiday sales do exceptionally well. banks are issuing on the top picks, a lot are retail names. david: we have lido isle managing partner, jason rotman. you sounded, i think last time you and i spoke, you sounded a little bit more optimistic, like you were trying to get positioned for some sort of rebound in 2019. is that what you're expecting? >> i am. i know i didn't mention this earlier, but one name that comes to mind, which is a symbol in a sense what i think will happen next year is a stock like alibaba. you and i mentioned that before, charles. alibaba was almost cut in half. this is a company that bid $30 billion of sales in one day. i think mr. market is too depressed right now and we will bounce back. technically what is speaks fundamentally, i really do believe big funds look at q1 as a great opportunity to buy cheap. charles: scott, last time you

and i spoke you made some shifts. you went into gold a little bit. you became more defensive. that is sort of the nature of the market. defense, even if you're in, caution. is that where you are right now? >> yeah, we are, charles. i would say more defensive with respect to volatility. you will get some good bang for the buck out of the s&p going forward. i love the comments, you and kk, that is kevin kelly, friend if you're playing at home, about valuation. that is where the crux of the market is 15 x on the s&p, we're about that fair value. if we have expanding economy still which i think we will, maybe resurgence in economic growth, more dovish fed next year, you probably have a reason to put higher multiple earnings number. we still believe in bold because it is the less volatile trade. it helped mitigate some of these s&p losses but if you're a

long-term investor here and believe in the earnings story i reiterated i think you have a good pick on some s&p stocks here. david: give us some names near the top of your buy list? >> kind of along the line what jason said. we like alibaba as well, because of the destruction in price, the fact the market overblew that one. how about industrials? this china trade deal will get worked out. whether it gets worked out in january, february, march, or even april is anybody's guess but reality the industrial stocks are thrown out with the baby and bath water. 3m, caterpillar, deere, outperformed the s&p in the last 30 days. i believe those are areas you can start picking up some value. don't forget, energy looks like it is bottoming every week. the reality, energy seems like a good place. duke energy, eog resources are good names to look at. we put those in our portfolios recently. charles: you know, kevin, you mentioned the pmi number, some

of these regional fed reports have not been great recently. today the dallas fed. we mow that impacted to a degree by oil. but that hasn't been the only one. one of the things i think maybe has gotten overlooked by the headlines are could there be some things wrong? we know what you would call the unknown unknowns, right? what could be out there that is gnawing at this market, not making headlines necessarily like, why would goldman sachs be down 37%? why are now some of these federal reserve, some of these regional manufacturing numbers really starting to feel like they're starting to fall apart? >> you're bringing up a interesting point on some hard data we're seeing. it is weaker. one. reasons why it is weaker is the seasonality effect. we had storms come in. people delayed purchases because of that. also because of seasonably weak q1 number. i don't think we'll get a good

q1 gdp number. that is traditionally the case. there is lot of reduction in spending because of that there is that build-up effect. you had a lot of manufacturers go out and purchase items before tariffs took place. you had them do a lot of spending in the summer. they wanted to see how it shook out over the second half of the year. i think that is the reason we had such strong number. first of all you can't beat that comp. second of all they wanted to see how the economy played out from that. charles: jason, kevin made the point, goldman lowered their gdp for next year and they're really concerned about the first half. there are a lot of questions marks. the market is dealing with that we have to get adjusted to slower growth. for me the operative word is growth. not necessarily slower but grow on top of amazing earnings period the first of the year. how does an investor adjust in your mind to all this? >> that could mean goldman wants

to buy in q1. second of all, you know, i love actually kevin's comment of the seasonality effect. i would even add to it. i think everybody has to remember, all price is driven by emotion, right? we don't live in a completely robotic world yet, and i hope we never do but that's a different conversation. it is all emotion. when you have more fear, more uncertainty come into play, you start to see temporary contractions. as confidence starts to build, the whole steady hand comment i totally agree with. we are very low. you will see the housing market start to come back. you will see manufacturing numbers come back. because i think the market is anticipating a maximum of one rate hike next year. it is volatile. charles: oldest axiom on

wall street is buy low, sell high. after i bring on guests we talk about it, no one wants to buy when it is low. a lot of people want to see it get back to the high. once we get to a double top i'm in! when we look back from this period a month from now, a year from now, we'll say golly, there were some amazing opportunities out there. i think that is what i think the audience grapples with more than anything else. when the experts don't have that sort of confidence, maybe that is when they don't have confidence. of course maybe sometimes the experts don't have confidence for a reason, jason. that is segment we'll do later on. what motivates goldman's calls. the idea a lot of people, really those who manage money for a living still seem to be confused. >> i agree, charles. maybe the fomo trade too. the markets are going up, everybody including the neighbor or cleaning lady making money,

you have to chase it. how nasty was christmas eve? that cute bottom we had on christmas eve trying to ruin everybody's christmas. that is the time at least everybody was selling at least the retail seller. you have those times you have to swallow, fade the thought and get in. you're right, this is to the point of sentiment, when things look really bad, they look really bad, when you and jason pointed out, bad news comes out, the market already knows it, you have to run with the market and figure out better days are ahead. charles: i will say i think retail investor sometimes gets a bad rub. last week was the first time they actually put money into the market that was bottoming. maybe they know something goldman doesn't. kevin, jason, thank you very much appreciate it. >> thank you very much. charles: trading optimism fueling this rally. new data coming out of beijing, really starting to add fuel to this thing. makes it feel like we're going to get a deal. a win-win deal probably. it is the tech wreck so far this

year. we know it has been a tech wreck. 2018 started out great. they gave up all the gains. can they gain leadership in the new year. will they have have dual leadership bring the market back? we'll discuss that later in the show. ♪ the day after chemo might mean a trip back to

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charles: right now markets are hopeful, rallying on news of a phone call between president trump and president xi of china on trade over the weekend. president trump tweeted out on saturday, just had a long and very good call with president she of china. deal is moving along very well. it will be very comprehensive, covering all areas and points of dispute. big progress being made. joining us with details, edward lawrence. reporter: people in the market may have seen president xi xinping's speech to the nation for the new year's eve address. he said pace of reforms will continue and china will open its doors wider to the outside world. he did not specifically mention trade or the united states. the phone call between

president xi xinping and president donald trump has our president praising looking forward to a possible deal. treasury secretary steve mnuchin says a face-to-face meeting with the chinese delegation should happen in early january. the u.s. trade representatives office is working on the final details right now. a chinese spokesman for the foreign ministry came out or the consensus, that china stands ready to implement the consensus agreed upon in argentina and move forward with the china-u.s. ties that are underpinned by coordination, cooperation and stability and bilateral cooperation deliver greater benefits to the two peoples and people around the world. this shows a change in tone from the chinese since the g20 summit. president donald trump made it clear he wants to protect u.s. companies intellectual property, open the markets to more u.s. goods and stopped forced transfer of technologies. the chinese are trying to avoid

increase in tariffs on march 1st. facing deadline of $200 billion of chinese goods going from 10% to 25%. the chinese originally thought they could wait out the president's tactic here. they thought there would be outcry from farmers that never came over the specifically the tariff war plus the chinese stopped buying our products. administration sources say the chinese underestimated of resolve of this president to go after what he wants. chinese here at the table know the president is serious. charles? charles: edward, thank you very, very much. for more on china, let's bring in coming collapse of china author, gordon chang. gordon it feels different. we keep hearing we can't trust the relationship of china and that they will say anything and they made promises before. they are saying promises and things they have never done before. >> what is different, charles,

the chinese economy is not growing at 6 1/2% beijing is claiming. a university professor made sensation across china, look the chinese economy is growing at most 1.67%, may even be contracting. we saw the pmi numbers from beijing which are official, shows the manufacturing sector is in contraction in december. that will continue. you will have a chinese economy trend down and probably pretty fast for probably a number of reasons. the reason, i think chinese political leaders understand they're in very weak position. if things are different, i'm not sure they are, if they are different, it is because of this. charles: i read where the politburo they just finished and the to inthe tone was 180-degree different from a year earlier. they have confidence. much more conciliatory. even, no matter were anyone, where this goes, it heels like

very least the tone has certainly shifted. >> i think the chinese leadership really changed their views of president trump. if you go back a year, as you say, china was very arrogant. they were going to dominate the 21st century. u.s. was in terminal decline. they thought they could push trump around. trump in 2017 was pretty generous towards the chinese. beginning of this year there was change in tone in the white house. the chinese are starting to say, oh, my gosh, maybe we underestimated the white house right now. charles: this debt, for lack of a better word, colonialization by china, there was a week ago a story taking over biggest fresh water report in kenya. maybe they haven't done that the report was conflicting. ecuador is ready to give up certain assets. they played hard ball up until recently it feels.

do you feel, there is situation in china, will they actually ever do want to be the preeminent country in the world he they have to be a better global citizen. you can't lend money you know they can't pay back and take ports and airstrips? >> a lot of people in china felt that way. xi xinping is different. he has a much more aggressive and belligerent attitude. you have the stories about the port in kenya and ecuador dam. the thing about export policy trap is not only traps the creditors but the debtors. they will throw good money after bad in ecuador. they do that in venezuela. they are owed $23 billion. some people say it is twice that. this is a lot of money. this is imperial overstretch for china. you look at the thing about belt and road initiative. year ago the chinese were very arrogant about it.

inside beijing it is considered a debacle. china can't afford it. charles: i read a piece in "the ft," how xi xinping deviated from his predecessor in some ways he may be actually ruining the grander, long-term centuries goal set before him. >> yeah. what xi xinping has done, he has gone away from bide your time, hide your capabilities to a more aggressive, belligerent. i'm here. we'll take you over. you guys have no sovereignty. right now inside of china the leadership is saying, who lost america? which is a big question. he is being blamed now because of all this friction. because he grabbed so many power, he can't say oh, it is your fault. it is his fault right now. he got all the credit in 2017 which was a great year in china. he is getting all the blame in 2018. he will get it next year which are not good periods for china.

charles: gordon, wish we had more time. great stuff. happy new year. >> happy new year, charles. thanks a lot. charles: government shut down dragging into 2019. president trump making it clear on twitter, he wants congress to come back from vacation to solve the issue. what kind of showdown will we see in the new year, when congress starts? my panel weighs in on that next. ♪ [knocking] ♪ ♪ memories. what we deliver by delivering.

charles: you know time really flies. the government shut down entered its second week with 800,000 workers being impacted. fox news reports that house democrats are planning to file a package within the next hour or so apparently it will tackle six appropriations bill for the rest of the fiscal year. the house can vote on an end to the shutdown as early as

thursday. meanwhile republican senator lindsey graham warning there will never be a spending deal that does not include funding for the wall, the cornerstone of president trump's agenda. for reaction, our fox news contributor deroy murdoch, national taxpayer union, senior fellow, mattie duppler. i thought you were going to be in the studio with me? >> it magic of tv, charles. charles: i hear you. we'll get this offer, not even an olive branch, if it is it has a lot of thorns on later today. >> beautiful transition, charles. no mistake, nancy pelosi walked out of the meeting with the president earlier this month, thinking they won on the shutdown. as we get closer to nancy pelosi taking over a chamber of congress, the reality starts to the change a little bit. the frankly the president has done a really good job over the break, taking bully pulpit to his advantage. staying at white house. continuing to tweet about the

wall. he has driven the message home. pell soesly has been vacationing. she hasn't been in washington. she doesn't know whether or not her caucus will behind this supposed proposal being floated by democrats. in a couple of days speaker pelosi will be in charge of the chamber. that means she has to govern. that becomes any -- challenging for any concessions to be made. we'll watch next 4hours or so what other democrats are saying about the proposal the speaker is supposedly putting forward, presumed speaker at this point. charles: yeah. >> there is still a lot of tricky manuevers here that democrats need to manuever in order for republicans to take any of this, pass in the senate and ultimately for the senate to sign. charles: nancy pelosi certainly not in the trenches with everyone else. you know, deroy, i keep asking, everyone all the experts how this ends, and it is interesting because no one really knows. typically people say this is what will happen. there will be a compromise. number will be here, happy by x

day and we'll all live happily every after until six months later we do it all over again. >> i don't know what final deal if any. democrats, republicans find some way towards settling their differences but the attitude towards trump, we need to work out something with him, we hate the guy. he is the worst ever. some people say he is is worse than hitler. we have animosity of the democrats, that is the very far left of the democrat caucus, make it difficult for anybody to come to terms. charles: elizabeth warren more or less throwing her hat in the ring today officially with the exploratory thing, we know the campaign begins almost immediately to the dems, the central issue would be hate trump, go after trump, impeachment, indictment, investigation. is there any way to get anything done under those circumstances? >> the best thing the president can do, i agree with mattie,

done a good job staying in washington rather than not going to mar-a-lago. have a prime-time speech, why the wall and shutdown is happening. force the democrats have been for it until showed up. in 2014 they voted for $46 billion of border security, $700 million of double fence. schumer voted for this. the difference is five years ago. trump is in, all of sudden they were against. 54 of 54 democrats voted for it five years ago. now the wall is immoral. charles: as fiscal conservative, you might be happy with some gridlock in washington. some suggested this is the time for the grand bargain, not just five billion for the wall but maybe 20 billion for the wall in return for daca deal, get rid of loopholes on immigration. is this sometime for grand bargains? >> problem with grand bargains, the promises are very long and actualization of promises are

very short. when we look on the table here, democrats don't want a bargain. if they wanted to bargain they would have gone into the oval office, talk about daca, folks already here, young people here legally since they were born here in the united states, all of those were never really on the table, as deroy said, for democrats the negotiation is about the wall. they want to keep it about the wall. why you see the administration talk a lot about bothered security, about technology, other ways money could be used because they know americans do want border security even if it is not in the form after wall itself. charles: deroy murdoch, mattie duppler, happy new year to you. >> happy new year, charles. see you in new york next time. charles: absolutely. tech stocks getting hammered this year. 2019. could we see reversal? we'll have big tech ipos ignite excitement and leadership in this market. we'll discuss that next. ♪ i knew about the tremors.

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♪ charles: welcome back. the markets holding steady on the last day of trading for the year. the dow up 115 points this hour. you can call it the tech wreck of 2018. will that trend continue next year? where you should and should not invest in 2019. first the action in the market the past five days, for me, the past five sessions paint a picture after market looking for fresh leadership, but not necessarily to replace momentum names in tech and communications services but to share the load. right now consumer discretionary names continue to outpace the rest of the market, led by mix of oversold brick-and-mortar names, best buy and coles. former momentum darlings like chipotle act great and technology seems to put in a

bottom. technology seems to find different leaders of every single session. bright now everyone is jumping on the bandwagon of sales force dot-com. apple has to regain to the upside even at pedestrian pace it has to participate. communications service, where majority of those momentum names trade. netflix, alphabet google, facebook, these are names that have all individual challenges, coupled with increased regulatory risk. valuations come down so dramatically. meanwhile deeply oversold sectors like financials, materials, they have hinted at turn arounds of late. the s&p 500 sector off more than 15% in the year. 23% from the 2018 high has a forward p-e ratio at very attractive 10. 10. now for me though the problem is i still don't know or haven't found a solid handle why this sector performed so poorly in the first place. materials, on the other hand

changing hands at attractive p-e ratio. forward p-e ratio, 13.5. well below the s&p 500. i see huge value in some of those names. i will admit i was also confident at the start of this year too. overall i'm excited about the market trading higher, with greater variety of leadership in 2019. for more on the tech wreck in 2018 disruptive tech research founder lou basnese. lou, first of all, technology, you have a lot of ipos come out. ubers of the world, pinterests of world could that change the markettology -- market psychology of this. >> uber, someone will hit reset button that eye poe will perform similar to snapchat, struggle

mightily coming out of the gate. charles: you're comparing uber to snapchat? >> i do. i think uber ipo will be massive reset on valuation just like snapchat. snapchat needs to disappear already as far as a stock investment is concerned. i think of the two, uber, lyft, i'm more constructive on lyft. uber's valuation too frothy at these levels. i don't think it would be good news for the market if uber was first out of ipo gate. charles: airbnb, plan neteer, pinterest, any of those names have the potential to lead the parade? >> plan neteer and lyft, depends on valuation where they come, but look at palantier, it is capitalizing on data and cybersecurity, one of the biggest needs criminally underinvested in in the country for decades now. i think that's a great opportunity there. airbnb, got to see the financials a little bit. it will be interesting, it will trade at a premium to hotel

stocks but how much of a premium will be justified? that is the 64,000-dollar question. charles: i'm a little worried about some of these municipalities, taxing these industries or making it tougher. i forgot which city it was, someone put out rental tax. tough register. they're making it complicated. i think they're doing not only to raise money but maybe to slow these industries down. let's get back to the established names. we can't tech without talking apple. where are you with respect to apple? it has to do well. doesn't necessarily have to lead the charge, i don't think. but it has to be trending higher if technology is doing well? >> i will be immortalized as guy came on here apple. i'm bullish on apple long term. you've seen analysts expectations come in. we may get after the holiday quarter once or twice a year buying opportunity where you can

back up the truck f apple breaks below 140 that becomes a tremendous buying opportunity, on a company, one. world's largest, still growing earnings 40% a clip quarter over quarter. i agree wholeheartedly. apple has to participate. otherwise we don't see the tech rally continue. charles: let me get your thoughts on chip sector. some days they look intriguing, others they don't. to me where all the excitement is, whether nvidia or amd many solve these other areas. >> amen. everyone talks about internet of things. it is really internet of chips. it is all semiconductor is going into countless consumer electronics whatever device. broadcom is a great, conservative way to play the chip space. they have six quarters in a row more than doubling profit. when the nasdaq was rolling over, down 20% last couple months, broadcom was up 5%. that divergence is something we need to pay attention to. charles: absolutely.

lou, happy new year. we'll see you again real soon. >> you too, charles. charles: cyberattack originating from outside of the united states disrupting the printing and distribution of some tribune publishing, some of the their largest newspapers on saturday. papers across the country, including the los angeles tribune, "chicago tribune," "los angeles times" and "wall street journal" were among those hit by the malware attack. it may have started on thursday and spread throughout the rest of the week when it was detected and reported on friday. department of homeland security issue ad statement a short time ago, it is aware of the situation, looking into it further. corporate debt, economy, federal reserve are all risks possibly facing the united states but are we overlooking the other risks out there? my panel weighs in next. ♪ beyond what people expect.

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charles: goldman sachs just announced it is cutting its growth forecast for the first half of next year, down 2% from earlier prediction of 2.4% f that is not bad enough, they say it is only going to get worse in the second half of the year. but at the same time, they say

they are not particularly worried about a recession. what are biggest risks to the economy next year when it comes to your money? where should you consider investing and what should you try to avoid? great panel to weigh in. director of intelligence danielle dimartino booth, jim bianco, and university of maryland professor emeritus, peter morici. danielle, i want to start with you. you're vocal in daily writings, social media posts about the concern over credit debt here and sort of idea maybe this is the source, biggest source of rick right now. >> we've been watching investment great bond earlier this year. we've been watching that as potential catalyst. what we saw with the general electric event. it indeed can be something that causes companies preemtelephonely begin to shrink.

more recently we've seen the end of panic buying. we've seen five of regional fed manufacturing surveys show slowing. this morning's data was released in a very quiet release day out of dallas, was a bloodbath, charles. we even saw employment tick back, which is result of oil prices being down 45% from their high. we're seeing consumers protection of job availability continue to come back in the latest consumer confidence report, people's perceptions of job availability fell off the fastest pace since 1977 when we were both very much younger. there is housing. i think goldman has got good reason to say they see the economy slowing going forward. charles: jim, if that is indeed the case, the tea leaves are becoming more obvious to read, this adds more confusion to the federal reserve, this last meeting, the dot blot suggesting at least two more rate hikes, all while taking so much accommodation every month out of

the economy. seems something is not right. someone isn't right here? >> yeah. that is why the market had the bad reaction over the last two weeks following the fed meeting. the natural state of an economy, the u.s. economy is to expand t expands faster and slower. the reason we have recessions because something breaks it and the leading cause of breaking the economy is federal reserve policy is too tight. they raise rates too much, they invert the yield curve, we have a recession. that is what the markets had their hiccup last couple weeks. federal reserve says they will reduce the balance sheet. that is form of tightening. they will raise rates two more times. that is a form of tightening. the market is worried that is too much and fed is slow to respond to that. that is the biggest fear the market has. they rebounded the fed gets it, there will be no rate hikes in 2019, but friday when chairman powell speaks if he hints around there could be more rate hikes i

don't think the market will take it well. charles: peter morici. >> i think chairman powell has to back off. he doesn't have to say no more rate hikes but indicate easing back. he said on december 19th, he thought the interest rate was neutral level. they issued a statement in the dot chart has it going up to 3% sometime in 2020. he can't let that kind of mixed communications come out. he has to talk to his period about doing something like that. more importantly it seems to me the biggest problem we have is donald trump. not mr. trump, not deregulation and tax cut but all of the negative talk in new york. no accident, take a poll of people that sit at goldman sachs, four out of five are democrats and would like this guy to fail. next year there will be a lot of stimulus in the system. now, for one thing the tax cut impact that is passed on to consumers. gasoline is a lot cheaper, awful

lot cheaper that increases household income. that is in real terms. the second thing you need to say what is going on with the dallas fed with the indicators. with the level of activity, not price of oil, but how much drilling is going on. look at the baker hughes report and how much drilling activity is going on. seems to me somebody is making the pipe going into ground for all these wells. charles: your goldman comment i would give up and give you standing ovation. but i'm tetheredded to the chair. >> read all the traders. charles: i read them all, my friend. >> we read the same stuff. charles: you know, it's tough, it is tougher now to parse out facts from opinion and opinion that is based on ideology, not fundamentals. danielle in this environment, people are not sure where to put their money. equities certainly look attractive from historic level. 4 p-e ratios, under the

five-year average, not threatening anywhere near where bubbles are. bond yields are yo-yoing. one day we're breaking near 3 1/2. now we're near 2 1/2. we can't make sense. how do you help investors here who are saying hey, we're, where do i find some safety in this environment? >> well, there are many ways to get defensive with your portfolio and, because stocks have come down to the extent they have, there are great dividend-paying stocks out there that would weather even a recession, charles and people should bear that in mind and the one favor that the federal reserve has done, the average saving american there is no longer shame in holding some of your money in cash because for the first time in a generation, holding cash actually pays a decent return. if you decide that you want to go with the notion that the economy will slow in 2019 there are plenty of options. you have to get out and talk to people though beyond just sell side. charles: sure. >> as you noted when you first opened the segment, goldman says the economy is going to slow but

never going into recession. be careful of these people are beholden to making sure investors stay long only equity market. that is fallacy, charles. charles: real quick, jim, defensive area or areas that you may want to share with our viewers? >> yeah. the one of the best-performing areas this year, although it lost money, because everything lost money this year, one of the more unusual years we've seen has been bonds. the bond market rallied, 2.68, lowest yield since february. that means price goes up. as we move into 2019, the bond market will show, maybe the economy moderates. we don't have to talk about recession, inflation expectations go down. that is a good cocktail to be long the bond market. it should provide better returns. charles: three great mind that was a great cocktail for the segment. i really enjoyed it. danielle, peter, jim, thank you very much. happy new year. folks we'll be right back with more "making money".

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charles: we're getting closer to the final trading hour of 2018. i want to bring back kevin along with commerce street holdings ceo dorey wiley. we are trying to make an assessment of opportunities for next year, 2019. the market's taking it on the chin. some stocks, more than others. some industries, more than others. where are you looking right now

as we head into next year for potential opportunities? >> well, i'm watching three macro things, then i'm watching certain sectors. on the macro side, i'm watching the fed. they have to turn a little more dovish. i'm watching china trade talks. then i'm watching oil. oil needs to stabilize and get above $50 a barrel. i think that would be good for the economy and the world economy. so given those three things, i think the opportunities lie in several areas, one in banking, the banking sector looks very good. the credit looks very good. if you pick your spots, there's some good opportunities. and texas banks and bank of america, pac west, all kinds of banks with all opportunities. in the tech area specifically, i like micron technologies. it's trading at a 1.7 enterprise value, a forward p.e. ratio, the peg ratio is .1 something.

the company has 50% roe. people are worried about rising inventory and chip demand but they have room to cut that in half and still do well. i like apple right here. i like apple a lot because i think we are going to have a fang shakeup probably this year, where some of the fangs are doing a lot better than the others. i think netflix is on thin ice. at least not for, you know, surviving but just problems. facebook continues to have problems. but apple is a core -- the most core company at the best value in fangs so why not just concentrate on it. charles: i love the fact you go for the ones that have been oversold or hit pretty good. micron obviously, notorious for boom or bust cycles. apple, still a lot of question marks. i love the fact that the herd has already come in. everyone downgraded the stock, nowhere to go but upgrades. i'm concerned about bank of america and some of the local texas banks. interesting because if oil continues to drift lower, i'm

hearing they will have some problems. i want you to think about that while i ask kevin for some ideas to share as well. >> yeah. i think one of the most important things you want to do is don't fix what's not broken and go with what's working in this market. what's working, twillio, they provide the communications backbone, so if you pull out your uber, it's using their communications for calling the driver and sms as well as airbnb. double digit revenue gains this year. they should do it next year as well, as more apps start to use their infrastructure. charles: aws, remind the audience, the amazon cloud business? >> yeah. amazon web services. guess who they have the strategic partnership with? amazon web services. just the way paypal grew because they do all the transactions for uber and are the backbone for amazon web services, it's the same thing with twilio. charles: i love that, too. i will admit, i have gotten singed in it. it's a wild stock. when they miss or there's a hiccup, wall street takes it to

the wood shed pretty big. >> it's a volatile stock. it only has room to grow. it's still in its infancy. it's the backbone of communications for the mobile world. charles: lululemon? >> they are starting a subscription service for die-hard followers and it's doing extremely well in a trial run in canada. people are describing, people who joined this service will spend more in the stores and that's been proven in their trial run in canada. it's pulled back over 26%. it's a great time to get in. i couldn't even step room in the store over the holidays. there was no room. charles: it is an amazing shopping experience. 15 seconds left. on the bank stuff, is there anything that would make you more concerned about them right now? >> let's focus on the texas bank issue. charles: 15 seconds. >> go back to 2014. you've got to have oil down at $30 a barrel for three years or more for it to really affect

these banks. most don't have nearly the oil exposure people think they do. charles: kevin, i love when folks come on and give us ideas. not wishy-washy stuff. don't tell me about countercyclical emerging markets. you guys delivered. thank you. now cheryl casone will do the same. cheryl: one hour to go for the entire year. we are looking at markets in the green as we enter the final hour of the final day of the quarter, the year, all of it, for 2018. those are up arrows. it's okay to look at your screen right now. we are helping to wipe away the pain of this year's historic swings in the market fueled by fed fears, worried about europe trade wars, all kinds of good stuff. tell you what, 2019 already, 13 hours old in hong kong. the chinese territory brought in the new year in style, as you can see. celebratory fireworks taking the place of trade tension fireworks