And less cash in home buying and lender underwriting. Weve talked a lot about some loosening in the market. More adjustable rate loans and even interestonly loans coming back. Freddie mac made some changes when it comes to student low debt as well. That should give branks and nonbank lenders a boost in earnings for the year. We actually have more housing data out today. Mortgage makeses edging up ever so slightly 0. 1 last week but existing home sales, thats where i really want to focus in on because they came in quite strong. Right . Yes, mandy. Were seeing healthier sales in june. Prices, not so much. Sales gained a larger than expected 3. 2 in june for the month, up 9. 6 for the year. Thats the strongest monthly pace in over eight years. But they came at a very high price. The median existing home price hit 236,400. Thats the highest ever. It is due to tight supply up less than half a percentage point from a year ago, just 2. 3 million homes for sale. It is also due to more expensive homes selling. Sales of homes priced below 100,000 actually fell from a year ago. Back to the mortgage picture, purchase application volume is up 18 from a year ago. The loan size is shrinking a bit which could mean more firsttimers are getting into the market. But that hoent shownasnt shown up yet. Firsttime buyers just 30 of the market since june. If you want to hear from the realtors, it is on instagram now. Diana olick on instagram. Youre going all modern on us. Weve got a whole lot more analysis on the Housing Market later in the show as well with an economist. Back to the stock market the dow, the s p and nasdaq are all moving lower just past 1 00 p. M. Here on the eastern coast. The russell 2000 are just moving marginally higher. Lets get to Bertha Coombs in times square to find out more about what in particular is happening . It is a total big cap drag story today. We have the russell 2000 right at the slot line. Mid caps are also just fractionally positive today as well but you see the 1 drop in terms of the large caps. Thats almost exclusively in terms of the point drop coming from microsofts miss and microsofts 3 plunge today. Apple, though theyve come significantly off of the lows, overnight it went close to its 200day moving average and seemed to hold support there. We are seeing apple on pace for a 100 million share day. Hasnt seen that since it hit an alltime high back during its april earnings. And before that was the day that carl icahn tweeted he was buying when apple was down heavily back at the end of january. Well see if that happens today. The real Collateral Damage is really slipping over into the chip stocks. Chips had been the worst performers and the wireless chips today in particular avago and xpi. On the flip side you are seeing some of the companies today that are hitting alltime highs. Two surgical among them. After much better than expected divinci systems its robotics had better reporting in terms of operations with those. Then you also have thoratec getting bought out by st. Jude medical for 3. 6 billion. Already this year we have a Record Number of health care deals topping about 395 billion according to thompson reuters. Thats more than we saw all of last year. Theres still a few deals that are out there being talked about that are very well in the pipeline, mandy. Thank you very much Bertha Coombs. Big time for alzheimers. Eli lilly and biogen both out with highly anticipated data from their alzheimers drug trials. Start with biogen shares coming under some pressure today on what some are calling controversial results from its alzheimers testing. Importantly it seemed to slow cognitive declines when you looked apartment the trial more effectively at higher doses. There was one closely watched middle dose which did not show statistical significance in two measures on cognition. Thats why some folks are disappointed in this data. A lot of analysts say this changes nothing but Piper Jaffray did downgrade the stock calling the data sloppy, loafer lowering its stock price to 410. Eli lilly has recovered some of the losses earlier in the day, trading about flat now. Analysts say the data on a similar drug came about in line with expectations. A lot more going on. Well tell you more in the next hour. Lets get back out to whats happening with housing with existing home sales nearing 8 1 2year highs. Is it safe to say housing might be in some sort of recovery . Lets bring in nela richardson, good to see you. What i find very interesting here were seeing prices at record highs seeing a lot of demand there, but were seeing very little supply. If im not wrong, supply is around record lows for houses on the market. Why is that demand not bringing out more people selling their homes . You know the buyers recovered faster than the sellers. It is as simple as that. Many sellers want to buy where they live. They want to be in the same neighborhoods and that neighborhood may have already outpriced you. You might not be able to afford the neighborhood that you could have afforded eight years ago. Those mortgage products that were available eight years ago have disappeared and prices have gone up near after year after year, month after month. I think thats part of the reason why were not seeing the translation into inventory that you would expect. Were never afraid of their investment in housing until the financial crisis. Then they became very afraid. Do you think that that fear of loss of money, that fear of going under water is one of the things thats restraining the Housing Market . Theres fear on both the buyers and sellers. For the sellers, it is a fear. These are different sellers than they were two years ago. Two years ago it was investors selling. Now it is traditional people selling, moving up. That means todays seller is tomorrows buyer. There is a fear that they wont be able to find something in their price range. For buyers were already starting to see this fear play out in the data there is a sense of fatigue that theyve been asked over and over again to go to the max of their budget and they dont want to do it anymore. They are afraid that they are going to buy at the top of the market and that is no one wants to do that no matter how much money they have in the bank. I know how to do that. Ive done it a lot. Oh so many times i cant even tell you. Its not a good feeling. Is it . Ive been there, too. But if you break down these Housing Markets one by one, i see top of the list here is denver. I was in denver just a couple of weeks ago and it felt like some kind of like mini boomtown was going on there. Do you think that kind of pace. Home sales in a market like denver is going to be sustainable and which markets would you expect to follow . For denver specifically its the fastest market weve seen. The median home the typical home, stays on the market for six days. Some that means 50 of homes are off market even faster than that. It is not just the denver natives who want to buy there. There are a lot of people relocating to denver. Austin is another market that were seeing. Theres these typically affordable markets that are now taking off and their prices are grow region their supply is shrinking as more and more people search for affordability. Were getting the behind of herd belafr inhavior in housing that you see in the stock market. Wow. Thank you so much for joining us. Why stock buybacks are distorting Earnings Growth. Bob pisani will join us with that story. Weve also got all the alzheimers data out today. The best biotech buys coming youry way. No fifth graders ever sat at the cool table. But your jansport backpack is permission to park it wherever you please. Hey. Thats that new gear feeling. Now get a swiss gear backpack for only 10. Office depot officemax. Gear up for school. Gear up for great. Female announcer get three years interestfree financing on brand name mattress sets. Plus, get free delivery, and sleep trains 100day low price guarantee. Sleep trains interest free for 3 event ends sunday. Your ticket to a better nights sleep recapping the headlines. Wells fargo is now the worlds most valuable bank with a market cap approaching 300 billion. Thats 42 billion more than jpmorgan and 120 billion more than citigroup. Shares of pet foodmaker blue buffalo soaring during its debut. Company trading as much as 27 per share. Thats well above its ipo price of 20 per share. And breakfast lovers rejoice because fast food giant mcdonalds may offer allday breakfast nationwide beginning in october. The company saying preparing breakfast alongside hamburger and fries presented operational challenges. Mcdonalds shares currently up just by. 2 . The stock buyback craze has continued into the Second Quarter. According to our bob pisani investors are being deceived deceived about Earnings Growth because of it. Lets bring in bob from the New York Stock Exchange. Thats a strong word bob. I wonder whether you really mean that they just dont understand the arithmetic of what buybacks do to ets numbers. Im concerned that lowering increasing the buybacks helps the bottom line but it doesnt do anything in terms of organic growth. People need to understand when theyre getting when you have buybacks. The fact buybacks are very big and an important part of the overall earnings picture. Right now 92 companies have reported in the Second Quarter. 20 have reduces their shares outstanding by at least 4 . What you want here is results that incur with shared reductions, actual real share reductions. Because with that thats when you get an improvement in the earnings per share. Look what the big one is out there. Apple. They are the biggest one out there in terms of how much they spend on buybacks. They have reduced their share count by 4. 7 in the last year. Thats remarkable. Thats an improvement of 4. 7 earnings per share, all other things being equal. In the last two years, they reduced it by 10 . Those are incredible numbers going into the bottom line and helping things out. Other companies are doing this aggressively well, too. Not just apple, but Bed Bath Beyond has reduced their share count by almost 16 . Delta, sherwinwilliams harleydavidson, a whole bunch of companies that have just reported reduced their shares by more than 4 . Other companies that been doing this for years and years. Ib mr. Is ibm is a good example. Theyve reduced their share count by 22 since 2010. Independently of whether theyve had any real organic growth. It is just Financial Engineering. The mother of all this with exxonmobil. Theyve been reducing their share count since the mobile deal in 1999 and they have take been doing it every year collectively since 1999. Theyve reduced their share counts by 40 . My point in all this is investors love buybacks because when you get share reductions real share reductions, you improve the earnings per share. My problem is that there are a lots of investors who are concerned about what they call the quality of earnings. Other investors are looking for real organic growth real Revenue Growth real growth in their business. This doesnt happen when you buy back your shares. There are other ways you can spend your money besides buybacks, you can invest in companies and invest in growing your company. Thats not whats going on right here. The New York Stock Exchange trade reporting facility did report briefly some incorrect trades earlier this morning. That happened 10 00 eastern. Very brief fiveminute period where there were some incorrect trades that were reported. Thats been fixed. Everything seems to be fine. There was a brief period for a short while ago for a few seconds where some of the touch screens froze here as well. None of this seemed to have affected trading at all. I just bring it it up because given what happened a little while ago with that outage there is a little bit of sensitivity to any of these kinds of little glitches that occur. Well keep our eye on it and let you know if anything else happen. What youre saying about earnings per share, is that when you reduce the number of shares out there and spread the same profits over them automatically earnings per share is going to go up. You seem to be saying that for those companies have that buybacks, earnings per share is not meaningful a profit measure as what . Organic growth. I mean, look. Organic profits. Yeah. My point is this. A real investor will look for, is the Company Growing its own Business Organic Growth internally. The products they sell. Can they show that theyre growing in some way. Thats what you really want to invest in longterm. Not saying theres anything wrong when people improve their earnings per share by doing Financial Engineering with be which is what this is like reducing the share count. It is perfectly legitimate. But think about it, if you are a really Quality Investor you want to know how that company is doing, are they really grow region longterm their business. Thats not what you get when you get reduction in the share count. All right, bob. Thank you very much. Airport workers threatening to walk off the job at two of the nations busiest airports. We have the latest on how this could affect your travel plans ahead. Plus hupup next if life gives you lemons, this startup says spike your lemonade. Craft cocktail in a can originated in my familys bar in long island new york. I love the taste. Which is essential. Whats the wholesale cost for one of these cans . Stay tuned to find out. Ikely to go away on its own. So lets do something about it. Premarin vaginal cream can help. It provides estrogens to help rebuild vaginal tissue and make intercourse more comfortable. Premarin vaginal cream treats vaginal changes due to menopause and moderatetosevere painful intercourse caused by these changes. Dont use it if youve had unusual vaginal bleeding breast or uterine cancer, blood clots, liver problems, stroke or heart attack, are allergic to any of its ingredients or think youre pregnant. Side effects may include headache, pelvic pain, breast pain, vaginal bleeding and vaginitis. Estrogens may increase your chances of getting cancer of the uterus, strokes, blood clots, or dementia so use it for the shortest time based on goals and risks. Estrogens should not be used to prevent heart disease, heart attack, stroke or dementia. Ask your doctor about premarin vaginal cream. Everyone loves the picture i posted of you. At t reminds you it can wait. No fifth graders ever sat at the cool table. But your jansport backpack is permission to park it wherever you please. Hey. Thats that new gear feeling. Now get a swiss gear backpack for only 10. Office depot officemax. Gear up for school. Gear up for great. It took Serena Williams years to master the two handed backhand. But only one shot to master the chase mobile app. Technology designed for you. So you can easily master the way you bank. Welcome back everybody. It is time for todays power pitch where one bartender entrepreneur is trying to raise the bar this summer. Does her startup have what it takes to be the next big thing . Hi my names bronya. Craft cocktail in a can originated at my familys bar on Fishers Island floshg. Ive been in the industry for over ten years and saw a demand to create a better option for the readytodrink category. Super premium grade ingredients which includes vodka, whiskey, all natural lemon and honey. Served in a 12ounce can. Does not consist of any artificial preservatives. They are served at 10 a cocktail or at offpremise locations for 15. 99 for a fourpack. Weve sold over 1,500 cases in the past year on track to sell over 8,000 cases this summer. So join me this summer and enjoy fishers isle lemonade in a can. Welcome to todays power pitch. You just saw bronyas pitch. Now lets meet the panel. Good to see you all. Thank you very much for joining us today. First of all, love the taste. Which is essential. I had several backstage. The value of a great brand in this sector comes from a, having great taste, and b, having massive distribution. Can you tell me how you get to 100,000 cases and whats it going to take to get there . Right now what were trying to do is hammer down really in our market right now which is Fishers Island new york connecticut, rhode island, mass and now long island. Weve seen growth within year one and year two and i think were just making time going down the eastern coast. To me this product screams lifestyle. Chilling on the beach, watching the sunset. Have you done any partnering up with sponsorship in similar category like Beach Volleyball tournaments or sailing or surfing tournaments . Actually sailing specifically. Weve done a lot of race weeks as well as marthas vineyard, the taste. Were trying to go after that lifestyle within the new england communities. Talk to me about your longterm vision for the company. Will there be products for other regions in the u. S. Or nonbeverage products . Whats the master plan . Right now really focused ond creating the foundation with what is our original product lemonade from the bar, the house recipe. I think after this with growth going down the east coast, within the coastal communities flavor would be great. So extensions keep going with other cocktail recipes. Can you describe who actually youre targeting and when and where they drink it . Were hoping theyre drinking it after 5 00 p. M. Really the millennials are really where we focused at first but going from 21 to 60 years old an everybodys really enjoying lemonade. As a beverage bar im always concerned with cost. Whats the wholesale cost for one of these cans . The wholesale cost is 75 per case. It is 24 to a case. It is a little over 3 a can the wholesale cost. We try to keep our margins in line with the Industry Standard given the fact that it is liquor, not malt not beer it is going to be a little higher than the average craft beer or Something Like that. But given that weve come from a bar and that wed personally buy it ourselves, then everybody is making the fair margins. I know there pea a natural angle to your product. Tell me a little bit more about how that plays out in the ingredients. We really try to bring down the sugar content being that it is sweetened with granulated sugar and honey. The natural is a lemon, not art artificially corn syrup filler like you see on the market. We are