Replace obamacare. Hospital stocks are leading the way, but insurers are outperforming the market and drugmakers, too, have been going up well have much more on the proposal and the impact on various stocks thats coming up in just a few moments here. Molina health care is one insurer really profiting from obamacare. How will the bill affectmanage cops like molina well have the ceo weigh in. And were pleased to welcome Goldman Sachs new president and chief executive officer Harvey Schwartz who is with us here at the New York Stock Exchange. Well talk with him exclusively about financial reform, the latest round of the stress tests which, by the way, are coming out a little more than an hour from now a lot to talk with harvey coming up in a little bit here. Lets begin though with the Health Care Stocks rising after Senate Republicans released their discussion draft of the bill Kayla Tausche joins us from washington with some key takeaways. Kayla. The discussion draft is seen as an opening volley for the senate side piggybacking off the house plan using tax credits to replace the Affordable Care act mandates and reoperation virtually all of its taxes, but some key differences are there credits on the tax side are based on income, not on age. The plan elongates medicate expansion with bigger cuts overall when it eventually phases it out and upholds payments to insurers to offset plan costs for those lowincome enrollees. The u. S. Chamber of commerce says, quote, we have long sought this type of balanceled solution that doesnt jeopardize employersponsored coverage while seeking Affordable Access for all americans, but it had its detractors, too, called the better care plan, but it can only lose two republican votes and currently at least four senators oppose it last hour senators cruz, johnson, lee and paul all said they would vote no on the bill for a variety of reasons heres senator paul just last hour on capitol hill were keeping the subsidies and boosting the subsidies for stabilization or risk pools, and i think it looks a lot like obamacare actually. That may be a public negotiating tactic, but there may be some quieter opposition behind the scenes. The president today said it will take, quote, a little negotiation, but its going to be very good, but, bill and kelly, theres only about a week for them to figure out how good they can make it to get those republicans on board. But, you know, they are at odds on some key issues. Ted cruz was also saying he wants to see he doesnt see anything there that will bring premiums down, but you cant bring premiums down if youre not raising or at least maintaining the subsidies that are in there which rand paul opposes, so, you know, they are at odds on some very fundamental issues here still, arent they and it feels very much like the process we saw play out in the house from march to may where it wasnt one clear ideological issue where if you could just get that one thing solved then you could bring that whole caucus to the table. There are quite a few issues here theres an unofficial group called the coverage caucus that doesnt want to see millions of people lose their insurance coverage, so for them the cbo score is going to be the most important number out, and then you have ted cruz who wants to see premiums get lowered and senator rand paul who wants the subsidies to get repealed and wants it is to look more like a fullscale obamacare repeeshlgs so its hard to know which of these players Senate Leadership can please if they cant please all of them. Im wondering, too, about the time line at this point. We heard earlier they might want to bring this thing to a vote as son as next week, kayla, but youre saying can it even get out of committee yeah, i mean, thats going to be the real question, kelly. Theres a soft hold for next thursday for a potential vote on this, but the oddsmakers who watch these legislative movements are putting about a 40 odds on 35 , lets call it, odds on this actually getting voted before the july 4th holiday. Its quite a bit higher before august 4th, but at the same time, i mean, they are going to have to go back and forth with the house on this. Its going to be a really, really complicated endeavor behind the scenes to actually get some compromise here, but then theres another outlier question which is, guys, will they put it to a vote if they dont have 50 votes. We havent gotten an answer on that, and that question has been asked quite a few times. One last thing very quickly im very interested in the market response as well because all the health cashrelated stocks are going higher, and whats interesting is in the past weve learned thats whats good for hospitals isnt always good for Insurance Companies and vice versa, but they are all going up today, and Drug Companies too. They are all going up, bill, for a couple key reasons when you have a longer tail for medicaid, that means that the rate of insured in a lot of these states like ohio, arkansas, for instance, thats not going to go down right away, so hospitals will have some time to actually figure out how to regroup in preparation for their clientele to change a little bit. Thats not going to be the rug being pulled out from under them immediately and then on the insurance front, quite a few buckets of money being put towards the Affordable Care act exchanges to try and stabilize that, and those had been funds that the Insurance Companies have been saying we need certainty on that. We cant price our plansch we dont know how to operate if we dont have that, but the senate bill actually does go to quite Great Lengths to put some money behind that. Very interesting. Kayla thanks as always, Kayla Tausche on capitol hill lets get to our Closing Bell Exchange dow is up 33 points as you heard. Health care stocks leading the way to the upside. Doug sand sler with us from river front Investment Group at post nine and sitting next to the man himself, mr. Arthur cashin from Ubs Financial Services and Rick Santelli is joining us from the cme in chicago. Arthur, health care is going up. Energy has been a problem for this market as well. What do you make of todays actions so far well, youve gotten a little bit of a bounce in oil, but it really hasnt translated into much in the energy stocks, and i think that indicates the heavy skepticism that youre seeing. People arent buying this bounce as a real turn there are some speculation around that the new crown prince in saudi arabia may try to get the oil price higher in order to get his ramco ipo gunning, but, again, thats created by skepticism by a great many people oil is probably going to be center stage here for a couple of weeks. Doug, what about you guys where do you see the most opportunity right now . Yeah. So im a u. S. Investment central artery gist for river front but surprisingly most of the opportunities that were seeing are overseas i look at overseas markets, particularly europe. You know, were looking at markets at kind of where the u. S. Was three years ago, that they are seeing economic strength and Earnings Growth and have cheap valuations. Actually starting to see politics the political environment where everybody thought the worse was going to happen to hey, there might be a bright side here weve been talking money out of the u. S. And putting it international, not because we dislike the u. S. But simply the better opportunities are overseas rick, here we go again. We were talking the equity market, the responding positively in certain sectors to the Health Care Proposal out of the senate the yields on treasuries are sharply unchanged today. So youre not getting much of a response there at this point, hu no, youre really not you know, a monthtodate charge says everything you need to know we keep drifting lower and price keeps drifting higher in treasuries of the right now two basis points off the low yield close of the year. Dollar index has had a pretty good june, but its still 4 plus in the red, and as far as the health care issues, repeal and replace in the senate, you know, i enjoyed listening to the discussion and the information from kayla you know, handicappers, they havent done very well from trump to brexit to georgia, so i dont know i believe that the market is looking optimistically, and they are probably thinking along the kidney stones. They are painful best to pass them as quickly as portion and i think the latter is most likely what will occur that might be my new favorite analogy of all time. Doug, i mean, i was going to ask you about china real quickly so we have this move by msci to add chinese shares and then regulators are cracking down on streaming news, web kafgt, and then you have them talking about others being investigated, so what is happening there and what would you invest in china . Not one of our top places to invest, you know, but particularly like asia, emerging countries around china, but, you know, the conclusion of the a shares is good for the first year but as the country becomes more and more developed its going to be a great source of growth for the rest of the world. Not right now youre staying away from it for the time being. Were neutral weight, emerging marks and if i had a look at risk and return, i think the developed markets outside the u. S. Are certainly your best opportunity. Arthur, what are you watching energy obviously aside health care is a big mover right now. I i was reading today somebody was using the word placid to describe this market for the last several months as weve discussed here, but whats going to shake this market up that youre looking for down the road here . Well, youll have a pretty exciting day tomorrow. Youve got the russell rebalance going on. Okay. Youll see somewhere between 25 million and 30 billion in swaps going back and forth it could be record volume, so i think traders will be cautious going into the close here to see what that does, and then the friday after that will be the end of the half, the end of the month and the end of the sub quarter so that will be a busy day, too, so weve got backtoback big fridays coming up here. All right fridays are always big in the summertime, too, as well. Have fun with that tomorrow. Indeed. Thank you, everybody. May you never have to pass a kidney stone, as a matter of fact. Or legislation. 50 minutes to go to the close. Dow up 30 as bill mention. We started unchange and did move higher around the same time the Health Care Bill came out interestingly now. Also, in the near term here, the fed is releasing the first part of its latest stress tests on the banks Goldman Sachs cochief operating officer Harvey Schwartz will give his first tv interview. A lot coming up from post nine. And a middle east rival looking to buy a stake in american all of this headscratcher ahead. Youre watching cnbc first in business worldwide. I love how usaa gives me the peace of mind and the security just like the marines did. At one point, i did change to a Different Company with car insurance, and i was not happy with the customer service. We have switched back over and we feel like were back home now. The process through usaa is so effortless, that you feel like youre a part of the family. I love that i can pass the membership to my children, and that they can be protected. Were the williams family, and were usaa members for life. Call usaa today to talk about your insurance needs. Youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if there was a single site where you could find the right hotel for you at the best price . There is. Because tripadvisor now compares prices from over 200 booking sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. Welcome back shares of tesla are up 2, an its not just looking to revolutionize the Auto Industry or maybe give trump the idea for that solar wall. It set its sights on the music streaming business tesla is talking to record labels about create being its own streaming system and it would include licensing, a proprietary service, a bill that would come with their cars. Of course, they would think about a music streaming service. Its also cool. I dont know. What happened to sharply defined Business Models that, you know perhaps its the user experience, right. We talk about this in the fast Food Industry each fast food franchise chain has its clearly defined food group that its going after and now they are haul blending not why hasnt mcdonalds launched a streaming music yet because that may be torn to its restaurant experience. Whats next, Goldman Sachs will introduce a an Online Lending Service for less than 30,000 . Whats next in this business. Funny you should say. The fed is scheduled to release results from its twopart annual stress test a little over an hour from now. For more on the state of the u. S. Financial sector were joined at post nine for a cnbc exclusive by Harvey Schwartz, president and cochief executive officer of Goldman Sachs welcome to you. Welcome to post nine here. Kelly, bill, great to be here. Is it a game of thrones type of thing for who wins chief operating is that right for the palace intrigue. I mean, you know, do you guys just divvy up responsibilities, or is it, you know as you know, at goldman theres a long history of coeds for the vast majority. Ive had them. Its worked well its pretty easy worked together for years, and we both grew up on the client side and we lean towards our strengths. Do it right and one plus one equals a lot more than two. The stress tests are what, eight years old, seven years old . Yeah. Are they still working, still needed what kind of modifications would you want to see, if any, here . Were big supporters of stress test, the way we think about Risk Management. Its been a critical part of our tool kit so were supportive i think were seeing the evolution of stress testing. The Federal Reserve had to bring the industry standards up, and now the standards are quite high and whats interesting is whether or not the market is as focused on this years results or they are more focused on what the next steps are as all this discussion happens in washington about where does regulation head it always seems the treasurys recent announcement, and even Jerome Powell yesterday talking about, you know, maybe able to loosen up some of the regular industry regime. Whats most important for you guys what do you want to see happen theres not one thing that we would be focused on. What the we would say is when you look at the treasury report, its its really straightforward, quite sensible and and, look, before the crisis there wasnt enough regulation now theres been a lot of regulation, and the real question is has the pendulum swung too far and how can we calibrate so it better supports fundamental growth which is what i was getting at with the stress tests are there modifications you want to see they have set the bar pretty high, and a lot of banks are hitting that now with the late round of stress tests well see a lot of capital loosened up that could go back to Share Holders in some regard does that suggest to you that maybe they need to relax those standards just a little bit here well see how much capital comes out in the stress test itself i think even before dan who was the chief architect of the stress test, said they should be looking hat the stress test for modifications was an indication that the stress test itself, that standards were at a level where the system could can be looked at how to make better enhancements for the process. Right theres also legislation that would make these one every two years and the qualitative peace of it and maybe thats something they do away with, because by definition its hard to figure out what regulators look, if only you had someone in the white house that could kind of make the case for goldman. Yeah. And, you know, its do you get you go years, decades back with gary cohn. Yeah. You worked together for 20 years. Yeah. I talked to gary a lot more when we worked on the same floor. Dont talk to gary as much as now. Were super proud of gary, but as you know its a little awkward for us and for exactly the reason we mentioned. We dont talk all that frequently but very proud of him. You want to the ask how do you think hes doing so far . I think garry is doing great. I thought you might say that. I think garry is doing great. Look, its early days for the administration clearly they have had some challenges from had a market perspective, obviously expectations were very high, and they have cooled off a little bit, and, you know, hover the next six to nine months, what really our clients are going to be focused on is whether or not the Growth Initiatives and the policy actually come together, because thats what people were expecting at the beginning of the year. Yeah, i know. We were talking to dick bovane not long ago and had this remark when we were talking about the repeal of glass steagall, if that were to happen, go back to separating investment banks from commercial banks saying if that happened goldman shares would double because all of a sudden the Competitive Landscape dramatically favors you guys is the that true if we were to go back to the future in that sense, that even if its a 21st Century Glass steagall, whatever that would mean right i dont know what 21st Century Glass steagall means thats not something we would think would help us best serve our clients. Remember, glass steagall, thats late 90s. The firm went public in t