This is a rush transcript from "Your World," June 21, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: All right, you're looking live at the Pentagon right now. It is a formal goodbye by Patrick Shanahan, the acting secretary of defense. He will be saying goodbye to staffers there.

Meanwhile, as you know, Mark Esper, the Army secretary, is going to replace him on an acting basis, hopes to make it through the confirmation process. We are there when he speaks.

And then, of course, there is this, something that would be front and center for the Defense Department, "cocked and loaded, a president saying that he is in no hurry to strike around, the president today defending his decision to call over retaliatory airstrikes just 10 minutes to go, saying it would have been probably not proportionate to the downing of an unmanned drone.

So what will the right response be, whenever it comes? We will ask the ranking members Foreign Affairs Committee, Mike McCaul.

Busy news day for you.

Welcome, everybody. Happy to have you. I'm Neil Cavuto.

We have got FOX team coverage with Jennifer Griffin at the Pentagon on what the military is saying now, and Kevin Corke at the State Department on why airlines are taking no chances now.

We begin with Jennifer.

Hey, Jennifer.

JENNIFER GRIFFIN, NATIONAL SECURITY CORRESPONDENT: Hi, Neil.

Well, there's a very different atmosphere here at the Pentagon today from yesterday. Navy warships, we have learned, were in position and ready to strike with Tomahawk missiles, just awaiting the go orders. President Trump explained his change of heart in a tweet -- quote -- "We were cocked and loaded to retaliate last night on three different sites when I asked how many will die?; 150 people, sir, was the answer from a general. Ten minutes before the strike, I stopped it. Not proportionate to shooting down an unmanned drone. I'm in no hurry."

There remains serious questions about what changed the president's mind. Any military strike plan earlier in the day would have been accompanied by a casualty estimate. Those first briefings by the military occurred at 11:00 a.m. at the White House, not 10 minutes before the launch. This was a propaganda victory for Iran.

State TV released this video showing what it claims is the wreckage of the large U.S. Navy drone. It's the second time in a week Iranian forces fired on U.S. drones. There is no evidence, based on Iranian behavior, that these were rogue units.

Furthermore, Iran said today it chose not to shoot down the manned U.S. Navy P-8 Poseidon surveillance plane with 35 American service members on board to avoid casualties. That plane, we have confirmed with U.S. officials, was flying near the American Global Hawk drone and shot this video of the drone being shot down.

Tensions are lower today, but the U.S. military, we're told, is still poised to respond if need be. There are still 70,000 U.S. troops in the region and an aircraft carrier strike group -- Neil.

CAVUTO: Jennifer, thank you very, very much.

Much major airlines, meanwhile, are rerouting flights around the Strait of Hormuz, Gulf of Oman, fearing a passenger plane could be mistakenly targeted. By the way, that has happened before. More on that in a second.

To Kevin Corke at the State Department on what has got folks there very nervous.

Hey, Kevin.

KEVIN CORKE, WHITE HOUSE CORRESPONDENT: Absolutely, very concerned. You're right on the money.

When you think about it, commercial airliners getting mistaken for military aircraft could certainly happen, and so they're being warned by American officials to steer clear of that area.

Let me share part of the notice sent to American aviation companies and individuals who might be operating aircraft in that part of the world.

It reads thusly, at least in part: "The NOTAM warns pilots that flights are not permitted in the overwater area of the Tehran Flight Information Region until further notice, due to heightened military activities and increased political tensions that might place commercial flights at risk."

It ends by saying this: "The NOTAM applies to all U.S. air carriers and commercial operators."

This of course, all comes after Iran downed a $130 million surveillance drone, but to hear the Iranians tell it, Neil, it wasn't an accident, it was justified. One of their generals saying: "We have issued verbal warnings, fired warning shots, and have repeatedly conveyed to American officials our objection through the Foreign Ministry, but apparently they don't plan to abide by international regulations. So it's normal that we react."

Meanwhile, local long-haul carriers like Emirates and Etihad were among those that have changed their flight routes. I have been in that part of the world, as you have. As you know, it is a major hub to global air travel. And at least for right now, they are not taking any chances, Neil. Steer clear of the area, we're all being told from our perch here -- Neil.

CAVUTO: Probably a wise move.

All right, Kevin, thank you very much.

Meanwhile, did the president then make the right move?

FOX News military analyst Colonel David Hunt with me now.

Colonel, what do you think?

COL. DAVID HUNT, RET., MILITARY ANALYST: I think it's a great day we don't go to war with Iran.

I like -- I like the fact that it wasn't a proportionate response. We haven't had any American ships hit in these two months. This was an unmanned global drone. I like it.

I like the fact we didn't go to war. I also think that the president -- the administration has cut the decision process almost in half. And all the people complaining about this are wedded to the old bureaucratic system that brought us Vietnam and 18 years of war in Iraq and Afghanistan.

CAVUTO: You know, Colonel, I wondered whether the president is providing wide latitude with the Iranians to come up with maybe, I don't know, an ego-saving type of an alternative to say, all right, you could not have planned this attack on this drone, that it had to be an errant general or someone with a trigger finger, what have you, and then today to remind the Iranians that we were ready to strike, and he pulled it in the last few minutes.

They have not necessarily responded entirely in kind. But they did remind the world that they were seeing a U.S. military plane with 35 on board that they opted not to shoot down. They said it was over their airspace. We have said the opposite.

But is that the first sign that maybe the two sides are trying to deal with each other in a less bellicose way?

HUNT: Yes. It's a smart move on our part, a smart move on Tehran's part.

We have really crippled them economically. They used to have two-and-a- half million barrels a day they was selling. Now it's down to 200,000. It's always a tense area. But what we didn't do yesterday was a strong signal that we're not looking to go to war. And a lot of people are complaining about this, but would have complained either way.

I think it's a great move that we don't kill 150 Iranians and possibly go to war with Iran. We got 18 years of war we're still at in Afghanistan and Iraq.

CAVUTO: All right, Colonel, thank you very, very much.

We're going to break away here just to catch Patrick Shanahan, the acting secretary of defense, who is saying his goodbyes at the Pentagon. We don't know if he's going to make formal remarks, per se.

But he's done. He is leaving. And, obviously, as you know, Mark Esper, the Army secretary, is going to replace him, also on an acting basis, as the defense secretary. This would be the third such defense secretary for this administration, obviously, in the middle of everything that's happening in Iran.

We will keep very close track of that.

Do want to take your attention to the markets as well, because, for all of this back and forth, and the ships, and who's running the Defense Department and not, what's happening Iran and not, you would think that we would be freefalling, or at least oil prices would be skyrocketing. We're not.

We ended on a down note for the Dow today, but it could have been a lot worse, oil on the week up about $4.66 a barrel. But putting that in perspective against the first sort of unrest around OPEC oil cuts with us back in the early 1970s, they effectively doubled to quadrupled in about 48 hours.

That was then, a very, very different reaction now. So we're going to be exploring that in a lot more detail here, but the world markets and our own markets holding up very nicely on the week, the Dow up about 2.5 percent, similar advances on all the other major market averages.

In the meantime, the ranking member of the House Foreign Affairs Committee, Mike McCaul, on what he thinks we should do next -- after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CAVUTO: If it had been a manned plane, a U.S. pilot was killed, would it have been different, you think?

BILL RICHARDSON, D-N.M., FORMER GOVERNOR: Yes, it would have.

But I think what we need to avoid is military escalation. I think what the president needs to do, Neil, is address the American people, talk about a strategy, what's at stake here.

He should go to Congress, get an authorization. They not necessarily would be against him.

(END VIDEO CLIP)

CAVUTO: All right, that was the former U.S. Ambassador to the United Nations Bill Richardson, among other titles, with a message to this president: You want to go fight Iran, then you better go to Congress.

I want to get a read on what he makes of that, the ranking member of the House Foreign Affairs Committee, who was at the White House briefing yesterday on Iran.

Of course, I'm talking about Texas Republican Congressman Mike McCaul.

Sir, very good to have you. Thanks for taking the time.

REP. MICHAEL MCCAUL, R-TX: Hey, Neil. Thanks for having me.

CAVUTO: The president seems to be handling this with an abundance of caution, and just trying to take us off the ledge from the ledge. What do you make of his -- his handling of this thus far.

MCCAUL: Well, I was invited yesterday to the White House.

I commend them for inviting the top national security leaders in the Congress, both House Senate, and bipartisan, quite frankly, to get our advice on moving forward with such a serious decision, which could lead to an escalation of war with Iran.

I think he weighs this very heavily. I think, at the end of the day, he didn't think it was a proportionate response to what the Iranians did. I do think a measured response is necessary.

But I do think he's sort of stepped back for a minute to give the diplomacy a little more time, so that we don't escalate the situation.

The intelligence community will tell you that, if we hit Iran and Iranians on Iranian soil, that we could really escalate the situation and have the people of Iran rally behind the ayatollah.

CAVUTO: All right, so, if his response this morning or overnight was, we're not going to respond in kind, then I would assume, unless something changes, that that holds.

So what -- is it back to sanctions? Is it back to what?

MCCAUL: Well, there will be new sanctions issued on Iran.

And I will say, the president, by snapping back the sanctions, has crippled the Iranian economy. I think these additional sanctions will do the same. If I were going to maybe do strikes, perhaps the oil platforms in the Gulf that would hurt them economically, because, the more they're hurt economically, it could collapse.

And what he stands up for are the Iranian people over the ayatollah. He doesn't want to see a nuclear Iran.

CAVUTO: So he has been open to the possibility of even speaking to the ayatollah, if need be. And he has held open the possibility that maybe the Iranians might have erred in this original drone attack, that it wasn't coming from Tehran, that, in fact, it was coming from someone who had a trigger finger, whatever, and, then again, with minutes to go, halting this that strike that was ready to go.

He's obviously trying to put this back in Iran's court to do and respond. We got a hint of that, Congressman, with the Iranians saying they could have shot down a U.S. military jet with 35 on board, and didn't.

So maybe something's happening. What do you think?

MCCAUL: Well, I think, certainly, if there were service men and women that were shot down, I think would have been a much easier decision for him.

It is important to note the United Nations Security Council is going to meet on this issue on Monday. I think he wants to get the full support from our allies before he takes action in the region. This is not a president who's shy to use force.

But I think he is using -- being a little more thoughtful and measured and deliberate in his approach, because, once you start this escalation, as the head of the IRGC, the general, said, he's calling on the proxies to go to war. They would respond in kind, and we would escalate the entire tension between the two countries.

So, I think a little bit of a pause is probably not a bad idea here. I do think they should -- they should suffer for what they have done in the Gulf area and their provocation. But I think the president was exercising caution here.

CAVUTO: Do you think, right now, as things stand, Congressman, that the fact that oil markets didn't go nuts, that world markets didn't go nuts, that, obviously, the expectation is that cooler heads will prevail, and then there is no crisis here?

Do you think they're getting ahead of themselves?

MCCAUL: I think the markets did respond positively to this. I don't think most people want to see us go to war in Iran. And the president knows that the American people are tired of wars in the Middle East.

He also mentioned President Xi's interest in -- I think, 80 percent of their energy comes out of the Straits of Hormuz, so they ought to be bearing some of the burden here. And I think he's right about that.

And so this is a -- this is an intense situation. I got to tell you, Neil, it's one of the most sobering meetings I have been in with, with the president there, the Joint Chiefs of Staff, the secretary of state. And I think the president's using caution, but he's being patient.

But his patience -- patience will wear thin, particularly if the Iranians continue in this provocation.

CAVUTO: Now, we were talking about to Ambassador Richardson, of course, who served under Bill Clinton, said, you got to run this by Congress first.

Well, you're in Congress. You're a major player, in fact, in Congress on these and other issues. Should he?

MCCAUL: Well, the authorized use of military force would come through my committee.

We take our Article 1 responsibility seriously. I would argue, though, that strikes have been done both under Clinton and Obama in the past without an AUMF. That wouldn't really apply if we engaged in hostile activities on the ground.

And so I think it's premature. But I do you think going through Congress is always a better route. But, right now, it would be self-defense, which the president, under Article 2, is fully authorized to do to defend the nation and American interests, which is what this drone strike was.

CAVUTO: Chairman, thank you very, very much. Good talking to you again.

MCCAUL: Thanks, Neil.

CAVUTO: All right.

Meanwhile, Democrats are calling on their 2020 candidates to cool it, especially when it comes to bashing the front-runner, Joe Biden. Proof that this could be boosting someone else, and that's what's got them nervous?

After this.

(COMMERCIAL BREAK)

CAVUTO: All right, so say it ain't Joe. Cool it with all the Biden bashing.

That is the reported message we're getting from some Democratic lawmakers who, for a bunch of reasons, are saying that the bunch of hopefuls for the nomination are going to ruin it for everyone and, ultimately, ultimately, get Donald Trump reelected, including this and forth between Senator Cory Booker and the former vice president over the vice president's openness to talk to admitted segregationist senators just to get things done.

Peter Doocy in Colombia, South Carolina, with more on all of this.

Hey, Peter.

PETER DOOCY, CORRESPONDENT: Neil, as these attacks against Jill Biden escalate, Democrats who aren't running for president are watching and warning.

(BEGIN VIDEO CLIP)

SEN. CHRIS COONS, D-DEL.: Democrats will do best when we focus on the positive and optimistic case that we hope to make to the American people about why our next president should be a Democrat.

In the upcoming debates in Miami, every minute that is spent attacking each other is a good minute for Donald Trump's reelection campaign.

(END VIDEO CLIP)

DOOCY: I talked to Kamala Harris about Biden's fond memories of serving alongside segregationists. And she again called them misguided and indicated that it's something she might bring up to Biden when she sees him over the next couple of days.

But Congressman Jim Clyburn, who is not endorsing a candidate in the primary, but is hosting them all for a fish fry tonight, says that, despite what he calls Biden's unforced error, he understands the point that Biden was trying to make, because he's been there.

(BEGIN VIDEO CLIP)

REP. JAMES CLYBURN, D-S.C.: Strom Thurmond and I had a relationship that wasn't grounded with him. It was grounded with his sister Gertrude.

A lot of people don't know this. In 1965, Gertrude and I worked together in the same office with our desks side by side. And so you don't walk away from those relationships over politics.

(END VIDEO CLIP)

DOOCY: And Clyburn told me that Biden's comments recently are definitely something that people here in South Carolina are going to notice and have noticed.

So it's going to be really interesting to see how Biden addresses what he said and what he meant with the one minute that he is given tonight in his first public remarks since this all made front-page news and how the other 17 or so Democrats who are going to be here tonight address it as well -- Neil.

CAVUTO: All right. Thank you, my friend.

By the way, while that report was going on -- and it wasn't Peter's fault or anything -- but we showed House Majority Whip Jim Clyburn, identified him as a Republican. Of course, he's a Democrat, but just wanted to get that out there.

In the meantime, Democratic strategist David Burstein with us right now, Turning Point USA's Rob Smith, and The Wall Street Journal's Jillian Melchior on where this is going here.

I'm looking at a lot of this, Rob, and thinking, if you're Joe Biden, they're eating your lead away.

ROB SMITH, TURNING POINT USA: I actually disagree. I have said this many times. I do believe that Joe Biden will get the Democratic nomination.

And my theory is this. The path to the Democratic nomination goes through black voters in the South, particularly older black voters. They are comfortable with Joe Biden. He's got a lot of cache from having served as vice president under our first black president.

And I think that that is the way they're going to go. Now, I am very surprised that after Joe Biden served as vice president for eight years, the mainstream media is just now unearthing these comments. I think that that's pretty funny.

(CROSSTALK)

CAVUTO: Well, that's the risk and danger of being around a long time.

SMITH: Yes. Yes.

JILLIAN MELCHIOR, THE WALL STREET JOURNAL: Yes, it is.

And, I mean, I kind of have to laugh at these calls for civility. I think they're going to work about as well as in 2016 saying Republicans, hey, don't snipe at each other.

This is a really crowded field. And I think especially candidates like Cory Booker, who are in the bottom tier of it, are going to be using anything they can to scrap their way up.

This is going to be vicious.

CAVUTO: Well, they had a phone call with each other, right? And apparently the idea was to let bygones be bygones, but it ended nastily, I'm told.

DAVID BURSTEIN, DEMOCRATIC STRATEGIST: Well, look, I mean, here's -- here's the problem with Biden.

This incident may not be the -- may not do it. And we still have a long way to go.

(CROSSTALK)

CAVUTO: We should say, the incident that's to do with how he characterized talks with segregationists at the time. But go ahead.

BURSTEIN: Right. Exactly.

And the point is, Joe Biden's been telling this story for many, many years, right. People went and found a speech where he talked about this in the '90s, in the '80s. He's been telling these same stories. He's been telling the same stories in politics for 30 years.

And the reality is, though, the times have changed. And he should know better than to know that, at this moment, with the way the Democratic Party is, it's probably not the best story to bring up.

So the question is -- we already had this with the Hyde Amendment.

CAVUTO: But talking to the other side and getting stuff done is hardly an offensive story.

BURSTEIN: Of course. Of course. Of course.

And that was the point of the story. But he could have found any number of other people who weren't segregationists, Orrin Hatch or other Republicans he's worked with over time, to use that example.

And it just -- that kind of political intelligence, I think, is Biden's problem. It's not one incident, but it could be death by 1,000 cuts with a bunch of slip-ups like this.

SMITH: I mean, the thing about Joe Biden is that this is a very old-school candidate that's playing in a new school field. He's playing in a very crowded field.

And the Democrats have gone very far to the left. I also -- you brought up Cory Booker. And I thought that it was really funny how Cory Booker kind of seized on this try to make it a moment.

He ran over to CNN. He's so offended. Cory Booker is just not really doing well. And I think that that was kind of desperation to have a moment.

CAVUTO: It's been all in the news this week.

(CROSSTALK)

SMITH: Yes. Yes, it's got some big press.

BURSTEIN: And it's interesting, to that point. Rob brings up a very good point.

The core constituency for the Democratic Party primary is African-American voters. And it's interesting to point -- to note that Cory Booker and Kamala Harris have not gotten as much traction with African-American voters as Joe Biden has.

So people need to look at that as they think about the trajectory of these candidates. It's a very, very important constituency.

SMITH: And another name that hasn't came up a lot is Bernie Sanders. And a lot of the stuff that I have been seeing on Twitter...

CAVUTO: Not at all popular with African-American voters, right?

SMITH: Yes, not at all popular.

CAVUTO: Why is that, by the way?

SMITH: You know what?

I think that -- I honestly think that black voters on the left just don't really know who he is. And he can hire as many influencers on Twitter to push him to African-American voters. They're really just not buying it.

CAVUTO: What do you think, Jillian?

MELCHIOR: Yes, I mean, I think you have got a point there.

But, again, this is such a crowded field. I think we're going to see a lot of stuff coming out like this. And I think the risk for many of these candidates -- I mean, we talked about Biden facing changing goalposts on some of these things. Times have changed. This is the second time he's been ensnared in that.

But I think that's a risk to any of the candidates.

(CROSSTALK)

CAVUTO: Or is it a reminder that his political instincts and, maybe to Dave's point, aren't attuned for the times right now, and that that -- he's the kind of candidate, every time he's run, he looks good from afar, but once in the race far from good.

Now, Barack Obama, true, did make him his vice president. That changed a lot of things. But at his core, is he just a bad candidate?

BURSTEIN: Well, the thing to remember is, I have to say, when I watch Joe Biden, something in him reminds me a little bit of Jeb Bush, who -- Jeb Bush hadn't run a competitive race in many, many years.

Sure, Joe Biden's been engaged in politics, but he hasn't run a competitive race now in over six years. And that's an eternity in this politics.

By the time the election comes around, it will have been eight years.

CAVUTO: But a lot of vice presidents suffer that, George Bush, right?

BURSTEIN: But there's a particular tuning to this environment that I think he's just ignoring of how fast these things can move and how destructive that this can be.

(CROSSTALK)

CAVUTO: But do you think it's being self-defeating for Democrats? He's the guy who polls the best.

(CROSSTALK)

SMITH: Yes, I really do have to agree with you.

And there's something about how long Joe Biden has been around and how rusty it seems. When you put Joe Biden...

(CROSSTALK)

CAVUTO: It always seems that young guys say that.

(CROSSTALK)

SMITH: But it's not even an age thing, because when you put Joe Biden up against Donald Trump, you see Donald Trump seems youthful.

CAVUTO: Well, it's like the "Cocoon" club.

SMITH: It is that.

But he seems youthful and exuberant in a way that Biden doesn't.

CAVUTO: All right.

MELCHIOR: Well, I do think, for Biden, too, the key is to be not apologetic, because these attacks are going to come one after the other.

And he risks looking weak if he continues to apologize.

CAVUTO: And he's apologized for a lot of stuff.

MELCHIOR: He really has.

CAVUTO: After a while, you got to...

(CROSSTALK)

BURSTEIN: He should just hone his instincts. Then he wouldn't have to apologize for so much.

(CROSSTALK)

CAVUTO: Sorry, we're out of time.

All right, see what I did there? That is basic cable.

(LAUGHTER)

CAVUTO: Meanwhile, if stocks are worried about Iran, all these other developments, man, oh, man, do they have a funny way of showing it? What do the markets see that maybe a lot of pundits do not?

After this.

(COMMERCIAL BREAK)

CAVUTO: You think it's crowded now on jets? Would you stand for this? These are standing seats, maybe for your next flight. Apparently, you can fit a lot more people on a plane.

And I'm sure they will all be happy and delighted.

(LAUGHTER)

CAVUTO: We're back in 60 seconds.

(COMMERCIAL BREAK)

CAVUTO: OH, it was looking like five for five. In the end, we had to settle with four out of five.

On the last day, trading dipped a little bit. But the fact is, when you look at everything going on in the world, including Iran and on-again and off-again China talks, and what's going to happen if we cut interest rates, and the world is freefalling, and all of that, look what we did.

We had an up week. We're looking at a potentially record month. So what does Wall Street see that maybe the rest of us do not?

We have got market watchers Anna Zakrzewski -- now, I practiced that several times. I think I got it.

(LAUGHTER)

CAVUTO: And, last, Ann Berry. So, we have an Anna and an Ann.

So, Anna, let me begin with you.

Looking at the markets' response, they don't appear too worried about Iran. They don't appear too worried by all these other crazy things going on. So maybe we shouldn't worry.

ANNA ZAKRZEWSKI, BOSTON CONSULTING GROUP: Well, look at it that way, right?

End of 2018, we had worse crash since the last 10 years. And if you compare what happened to wealth and market developments, et cetera, it completely slowed everything down.

So the question is, is that a trend that will continue for the next five years? Question mark, right?

CAVUTO: But we now know that you had bought in the middle of that downdraft last December, when it looked like the world was going to hell in a handbasket, you would be richly rewarded. Right?

ANN BERRY, FINANCIAL ANALYST: Right.

And I actually think, Neil, a couple things have happened since then that have been very pivotal, I think the big one being the Fed coming out this week and dropping that magic word, patient, basically saying, we're going to look at the markets, we're going to see what happens broadly, but to see if we will take a rate cut.

That's a change in the position from that period.

CAVUTO: But does it worry you?

Normally, when the Federal Reserve is talking about cutting interest rates, you would worry. Like, what do they see that we don't see, right? But, obviously, they were doing it to show we are there at the ready in case something on the trade front hits the fan.

But would you worry if the Federal Reserve started cutting rates now?

ZAKRZEWSKI: I wouldn't worry.

But, on the other hand if you look at that, I'm coming from Europe, and in Europe, we are having negative interest rates.

CAVUTO: Right.

ZAKRZEWSKI: So I think the impact here is at the moment positive.

But if you look at negative interest rates in the long term...

CAVUTO: Do you think we could have that in the United States?

ZAKRZEWSKI: It started with a few markets, and then other markets keep getting it as well.

And it's good or it's bad, but, still, that's the question right? At the moment, I think it's got a positive impact.

CAVUTO: Yes.

ZAKRZEWSKI: In Europe, we have been having them for way too many years.

CAVUTO: Yes, where actually you have to pay the bank to hang on to your money.

(CROSSTALK)

ZAKRZEWSKI: Well, they don't charge you yet. But we don't know, right? Some are thinking about it.

CAVUTO: Right. Right. Not yet. Not yet.

ZAKRZEWSKI: Some are thinking about it.

CAVUTO: No, that's amazing to me.

You know, Ann, the president last week was talking about, if he were defeated, there would be a market crash. Do you agree with that?

BERRY: I don't necessarily agree with that.

I think the fundamentals in the U.S. economy that have created the strength we see now being put in place, I think they predate the president. I think there are certain policies he's put in place to support that, whether it's the tax cut.

CAVUTO: But he did put it on steroids, didn't he, I mean, between the tax cut, cutting regulations.

I guess what he was hinting at is, any one of these Democrats, they hate my tax cuts, they're not a big fan of what I have been doing on the regulation front. So, assuming they were to reverse that, it's going to be bad.

Do you agree with that?

BERRY: I think he's saying that.

I think he's also pointing specifically to who the leaders in the Democratic race is at the moment, right? So if we take a look at Bernie Sanders and Elizabeth Warren, they're right on top of each other right now on certain key policies that kind of scream tax increases, right, whether that's...

CAVUTO: Well, Joe Biden wants to get rid of the tax cuts too, right?

BERRY: There's a reverse with the tax cuts, but then there's also policies that would maybe require increased tax revenue, for example, the cancellation of student debt, or tuition-free universal college for all.

Those kinds of policies scream tax increases to the electorate. And so I think President Trump's pointing to those sorts of threats too.

CAVUTO: Got it.

Anna, I know the read that this country is at is that we're the best place for your money, the best market on the planet. Capital will be always attractive here. Do you buy that?

ZAKRZEWSKI: Well, I would say you're the largest wealth market, right, $90 trillion, growing numbers of millionaires.

We expect, the next five years, wealth to continue to grow over like 6 percent.

(CROSSTALK)

CAVUTO: Concentrated in the United States?

ZAKRZEWSKI: That's only the United States. It's the largest wealth market globally.

So, assuming the markets continue like they have at the moment, it's going to be a 6 percent growth rate and an increase in wealth, yes.

CAVUTO: So, you're bullish?

ZAKRZEWSKI: We are actually conservative.

If I was bullish, I would say 7 to 8, because that is what we have seen in the past.

CAVUTO: So, you're conservative at 6?

ZAKRZEWSKI: I'm conservative at 5 to 6. And I'm pessimistic at 1 to 1.5.

CAVUTO: OK. But it's a problem when it's a minus sign in front of that, and it's not that.

ZAKRZEWSKI: Well, we had a negative growth rate in Canada for the first time ever.

CAVUTO: That's true. We did.

ZAKRZEWSKI: So, at the moment, U.S., no negative.

CAVUTO: OK.

Are you looking at any problems for the markets, or still OK?

BERRY: We still wait and see.

I think when you look at the manufacturing data that's been coming out, that's pointing to real slowdowns down to levels in 2009. But when we think about relative opportunity, it's about not just in a vacuum how's the U.S. performing, but how is it as a haven for investment relative to other parts of the world? And it's looking pretty attractive on a relative basis.

CAVUTO: Knock on whatever.

(LAUGHTER)

CAVUTO: All right, thank you, guys, very, very much.

In the meantime, what if I told you, all this going on in Iran is not going to impact your gas prices at all, but this, this is?

The aftermath of an explosion on the East Coast's largest oil refinery in Philadelphia, no deaths or injuries. But if the AAA folks are right, it is going to hit you at the pump, and maybe sooner than you think -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, who says it's over in Hong Kong?

Thousands of protesters there marching on police headquarters, pushing back against a controversial extradition bill with mainland China. Now, it's been suspended, but it hasn't been entirely taken off the table. And that's what's got their goat.

Greg Palkot there with the very latest.

Hey, Greg.

GREG PALKOT, CORRESPONDENT: Hey, Neil.

Yes, it's early morning, Saturday morning, here in Hong Kong. But it's been another tense night. Just a couple of blocks from our harbor-front position here, protesters were active.

They surrounded and block the city's police headquarters for much of the day into the evening. Yes, they're upset and they are demanding the scrapping of that controversial extradition law, which could, they think, expose residents here to the very suspect Chinese justice system.

They have a bunch of other demands too. We were out on the street. Here is how the protests kicked off on Friday. Take a look.

(BEGIN VIDEO CLIP)

PALKOT: Student activists on this day in Hong Kong staging in front of the police headquarters here. They're demanding the release of those who were arrested in last week's riots. For the moment, at least, security authorities vastly outnumbered.

(END VIDEO CLIP)

PALKOT: Again, the police seem to be holding back here, Neil, and neither side looking for a replay of last week's riot, which saw dozens arrested and injured.

At the same time, these young people who are out on the streets, they sound very determined. Take a listen to a few of them.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We're here today because the government is not listening to us.

PALKOT: You're going up against China. You're going up against Beijing.

UNIDENTIFIED MALE: Yes, we clearly know that, but there's nothing that we can lose. And we cannot be afraid of death.

UNIDENTIFIED FEMALE: I have hope somehow. I have hope in Hong Kong.

PALKOT: You have hope?

PALKOT: Yes, I have hope in Hong Kong.

(END VIDEO CLIP)

PALKOT: Amazing stuff, Neil.

Remember, last Sunday, we saw two million come out on the streets. Smaller protests are planned this weekend, but some bigger protests in the future, including July -- June 1, which -- excuse me -- July 1, which is the anniversary of the handover from the U.K. to China -- back to you.

CAVUTO: Greg, thank you very, very much, Greg Palkot.

Meanwhile, suspicious deaths of Americans who vacationed in the Dominican Republic, but officials there are saying there's really nothing to see here -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, the families and two more Americans who suddenly died while visiting the Dominican Republic have come forward.

Now, the country itself is saying that there is no mystery to these deaths. The FBI is looking into this.

Former FBI Special Agent Manny Gomez with us right now.

Manny, there have been quite a number of deaths now. And you do see a pattern. What do you see?

MANNY GOMEZ, FORMER FBI SPECIAL AGENT: Well, I see something that's happening that is very suspicious.

These deaths have occurred at different resorts. It just hasn't been one resort. It's been at several different resorts in a short amount of time. So the main suspect is methyl alcohol.

But if that's the case -- and obviously the FBI is there using their expert toxicology equipment to try to identify if that is the case, if it was methyl alcohol, or if it was another sort of poisonous substance that could have been introduced...

(CROSSTALK)

CAVUTO: But, in other words, that's replacing the expensive stuff in a lot of courtesy bars and everything else of these resorts.

GOMEZ: Yes.

CAVUTO: And it turns out that this lot, if you're right, was bad, was very dangerous.

GOMEZ: It's criminal, obviously, in nature, because people are getting hurt and dying. There's been about a dozen that have been fatal.

But there's dozens of people that have been gotten -- that have gotten severely ill.

CAVUTO: So, it was a bad batch in this case?

GOMEZ: It's a bad batch.

But, worse than that, we don't know how many more batches are out there.

CAVUTO: Right.

GOMEZ: And that's the concern, because it's continuing. And now the summer's here. A lot of people are taking off. The kids are out of school. They're going to be traveling to the Caribbean, to other places.

And the concern is, are there many more batches out there that could potentially be lethal or harm people? And so that's why the FBI is there. The Dominican Republic doesn't apparently have the resources that we have here in the States, specifically the FBI, to be able to identify what's going on.

That being said, the next phase of it is the investigation. So, now, if they identify that there's a toxic substance in these drinks, then they have to find out where it came from and stop it, so it doesn't continue.

CAVUTO: So, if it was something like this, and it was not an attempt on the part of going after American tourists or something that even has more sinister implications, what does that tell you?

GOMEZ: It tells me that they don't have control.

The government, the resorts themselves, they need to have better control. They need to fully investigate, identify where -- if in case this is methyl alcohol or some other poisonous substance, where it came from, who was responsible, and make those people accountable.

CAVUTO: Some of these are very pricey resorts. You think that would be the last thing they would concern themselves with.

GOMEZ: Absolutely.

But perhaps it's coming from the same distributor? Who knows? That's where the investigation has to lead. And that's where the Dominican Republic has to let the FBI do the good work that they do.

CAVUTO: All right, we will watch closely. Manny, thank you very much, Manny Gomez, the former FBI special agent.

By the way, we are learning that the U.S. Federal Reserve has just cleared 18 of the largest banks in this country, passing the Fed's annual stress test. In other words, if everything hit the fan, they try to gauge whether these banks are ready for that, akin to what we had during the meltdown. And they say the 18 largest U.S. banks are.

Hope springs eternal.

More after this.

(COMMERCIAL BREAK)

CAVUTO: All right, it's probably no secret that airlines tried to fit as many fannies into their planes as they could possibly get. But now there's the SkyRider.

It's a saddle-like seat. Have you seen this? It maximizes passenger capacity. Apparently, if you really wanted to push it, double the capacity of a normal plane, if they use them to the max.

So our Generation is Hexed, and, by the way, not just young Gen Hexers. I'm talking like people like me, who say, I'm never getting in that thing.

Internet radio host sensation Mike Gunzelman. We have got political strategist Ash Wright, and last, but not least, Ruby Media Group's Kris Ruby.

Kris, this sounds crazy, but I think it's the future.

KRIS RUBY, RUBY MEDIA GROUP: Is it the future? Really?

CAVUTO: I think it is. I do.

RUBY: If this is a future, that's not a bright future.

CAVUTO: But if you could get your ticket half-price, would you do that?

RUBY: Absolutely not.

CAVUTO: Really?

RUBY: I think there are two different groups of consumers. Right?

There's luxury. And then there's the other group, which would want to do this if it's cheaper. I'm not part of that group. I would rather -- I mean, it's like riding a bike.

MIKE GUNZELMAN, INTERNET RADIO HOST: Yes.

No, this is a terrible idea all around. You talk about an atomic wedgie. You know what I mean? You're going to be sitting this thing dangling.

(CROSSTALK)

GUNZELMAN: No, because here's the problem, right?

Airlines are trying to do too much right now. There's two things we want, more leg room, and fix the Wi-Fi, all right? Focus on that. Don't be dangling us. Like, what do you do? Like, oh, your leg cramps up. It's just going to be a nightmare.

(CROSSTALK)

ASH WRIGHT, REPUBLICAN STRATEGIST: And it's going to -- they will put more people on the plane. It will weigh it way down.

And it'll cost more in fuel. So the ticket price isn't going to come down that much.

CAVUTO: So, at least if get a deal on a ticket.

And can you imagine, as these people come in the plane, you pass first class, you pass the normal seats, you, back over here.

(CROSSTALK)

RUBY: Even if you gave me that seat for free, I still wouldn't take it.

(CROSSTALK)

RUBY: Absolutely.

CAVUTO: But you're an elitist.

RUBY: It does not make me an elitist.

CAVUTO: Exactly. Exactly.

I also, guys, want to get your thought on this. Maybe you should have this while you're in this said jet with these seated planes.

Do you ever wish that there was some sort of device that could help you from doing something bad? If you're going to reach for a donut, like -- all of that.

Well, apparently, there is. And this is it. Take a peek.

(LAUGHTER)

CAVUTO: That's the producer having a lot of time on his hands.

Thank you, Andrew White (ph).

All right, in the meantime, it's called the Pavlok, I guess. Maybe it's a play off Pavlovian response. Anyway, it's a wristband to zap you out of habits like sleeping in or smoking or eating sweets or donuts.

Amazon is already apparently selling them for 200 bucks a pop.

Would you guys buy one?

GUNZELMAN: No good.

CAVUTO: Really?

GUNZELMAN: No.

No, listen, it is my God-given right to be -- to have as many bad habits as I want. All right? I don't want to be getting shocked left and right over this.

I mean, but also from a larger, more serious standpoint, what about self- control or learning to discipline yourself? Especially if you're younger, you have to go through that. You don't want to be getting zapped.

Parents are going to -- kids don't eat their vegetable, their parents are going to be zapping them left and right.

(CROSSTALK)

RUBY: I think what is interesting about this is the remote shocking capability.

So that is what is most fascinating. So, basically, that's -- like I can give you the option remotely to shock me if I do something wrong.

CAVUTO: Really?

RUBY: Like let's say I say something wrong in this segment. You could shock me.

CAVUTO: I have done that with him.

(CROSSTALK)

(LAUGHTER)

CAVUTO: But he keeps coming back.

(CROSSTALK)

CAVUTO: But what I don't actually -- how does it work, then?

If you -- is it preprogrammed that, if you're going to reach for a donut or you're going to, I don't know, do whatever?

WRIGHT: Apparently, it'll be with your snooze button.

So if you hit the snooze button, it can be preprogrammed to send you a shock while you're...

CAVUTO: But how will it distinguish you reaching for a donut and you reaching for a carrot?

GUNZELMAN: I think it's supposed to self -- kind of like you shock yourself type thing. It's like, oh, I did it again, oh, no.

(CROSSTALK)

WRIGHT: Or another user.

(CROSSTALK)

CAVUTO: But, yes, but what if you are doing this by itself?

RUBY: It also assumes that people really know what behavior they need to modify, which I think is the challenging part. People don't always know that. Right?

So I think if you took this and maybe paired it up with some genetic testing, that would be interesting, where you could see from a DNA perspective, OK, you have these sort of things.

CAVUTO: You're being far to intelligent.

GUNZELMAN: Yes, what it is, these words that are happening? This is Gen Hexed.

(CROSSTALK)

CAVUTO: You're doing a full examination. Do I really want the donut?

(LAUGHTER)

CAVUTO: All right, meanwhile, police in California are turning the tech to fight crime.

They're deploying this H.P. RoboCop to the streets to keep a watchful eye on public areas. Now, Amazon is considering a similar device.

So do you want a robot following you around?

GUNZELMAN: No. Once again, I hate all these ideas.

(CROSSTALK)

GUNZELMAN: I think this is a slippery slope down technology and policing.

And I think it can get out of hand very quickly. You can't talk to a robot. You won't be able to argue your case. Or in case they miss something, you can't -- you have no...

(CROSSTALK)

WRIGHT: But, apparently, it will interact with you, say hello, tell you how -- if you're having a good day.

CAVUTO: Well, HAL in "2001" did that, you know?

WRIGHT: You know, as far as privacy, look, we already have red light cameras. We're on security cameras everywhere we go. I feel this is the future.

And I'm actually glad that a city is taking steps and actually advancing technology.

(CROSSTALK)

CAVUTO: It's meant to protect you.

RUBY: I think, on the positive side, it can free up certain police officers to free up their time for more dangerous crimes that are being committed, right?

And so you use this RoboCop in...

(CROSSTALK)

GUNZELMAN: I don't need robots following me around.

(CROSSTALK)

CAVUTO: Let's say safety in a neighborhood, and you have one of these patrolling the neighborhood, it could let your neighbors know, hey, there's someone at my house or whatever.

RUBY: That's true.

I would just be careful who you're in the park with or wherever you go.

GUNZELMAN: Or you go up and you push it over. Look at that thing.

(CROSSTALK)

(LAUGHTER)

GUNZELMAN: Push it on its side.

(CROSSTALK)

CAVUTO: ... more sinister look.

(CROSSTALK)

CAVUTO: Mr. T., it is not.

All right, meanwhile, apparently a lot of younger folks are turning away from deodorant. A new poll that shows a certain generation is saying, I don't need this stuff, whatever. And they have lost friends left and right.

Anyway, a personal hygiene company called Schmidt's Naturals is collaborating with Justin Bieber, who apparently does not stink, to get young people to at least try their products.

What do you make of that?

RUBY: This is great. This is where millennials are heading. They want more natural products.

And I don't necessarily think it's saying that they're not wearing deodorant at all, right? I think they just want deodorant that doesn't necessarily have aluminum in it.

CAVUTO: Yes, but they're eschewing that if it has all sorts of chemicals in it.

RUBY: Yes, they don't want the -- they don't want parabens. They don't want aluminum.

(CROSSTALK)

CAVUTO: Right. I know. But then they stink and make it offensive for us.

RUBY: There's essential oils they could be using.

GUNZELMAN: I just don't want to hang out with anybody who purposely wants to smell bad. You know what I mean? You're not a fun night if that's happening.

(CROSSTALK)

RUBY: You know what I mean?

(CROSSTALK)

WRIGHT: ... going to get older and it was going to be like, I couldn't keep up with social media or technology. I didn't realize I was going to be, now I'm old enough to remember when people wanted to smell good, which is where we're at.

CAVUTO: But is it based on chemicals? Is that what's driving it?

RUBY: Totally based on chemicals, yes, because there's all these correlations and links between cancer and aluminum and these products.

So you also have the rise of what we call pit cleanses, which is detoxification for armpits now with bentonite clay.

(CROSSTALK)

GUNZELMAN: Just smell good, people.

(CROSSTALK)

CAVUTO: Just smell good, yes. Get something natural or just something, really. We work with a lot of you. And we don't want that.

All right, "The Five" is coming up.

We will see you here tomorrow on "Cavuto Live"

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