Transcripts For CNBC Power Lunch 20170628 : vimarsana.com

CNBC Power Lunch June 28, 2017

Bazos versus trump power lunch starts right now heres what else is happening. Southwest airlines pulling back on its service to cuba because the routes were not sustainable. Southwest will continue the service from ft. Lauderdale and tampa to havana. Phil jackson out as New York Knicks president they were 80166 in his full three seasons. And for the first time ever, samsung will build appliances right here in america. It will open a factory in South Carolina creating more than 950 jobs by 2020. Im Tyler Mathisen a rally today. Financials, industrials are leading the way at this hour one stock were watching is fedex. The stock is higher after it said there was no data breach to the tnt express unit but there could be a possible Financial Impact from a disruption in operations lets get the latest on this rock them, sock them rally in this edition of power lunch. Bob pisani is on the floor of the nyse hi, bob. Reporter there doesnt seem to be anything in the way of the market ramp. Lets look at the internals right now. We open 5 to 1 thats a good open it stayed that way throughout the whole open the volume is moderate lifting quietly and volatility keeps dropping we know that story, too. Sector, its this rotation again. Oil service names, bank names and retail names, whatsectors are trading for the upside oil service names, bank names and retail they are leading as well here and how about the banks starting to see the move forward. Weve been telling you about the results this afternoon who will be able to buy back more stock citigroup on many peoples list for increasing the dividend as well stabilization with the tenyear is helping as well and to look at oxlf, even in europe you see the europe banks strong again from an ecb banking forum. Some may get the green light to buy back capital or buying back a return capital michelle, wouldnt that be something to see something happen with the european banks as well . Again, remember, 2 1 2 days away from the end of the quarter. Michelle thank you, bob. We already talked about the stock market but fed chair janet yellen saying that its looking somewhat rich if you have some traditional metrics and John Williams saying that the stock market is running on fumes are they right nancy, when i looked at the Market Reaction today, its like they look at these people as contrarian i contrarian indicators. What do you think . It always makes me nervous when the fed is talking about the stock market and the comment that its running on fumes is ludicrous and the market is responding to that the majority has been driven by earnings growth, somewhere over 60 . And the rest is multiple expansion. Still, were not at nosebleed levels in terms of multiple expansion. Give me a number. What are you looking at in forward earnings, for example . What am i looking when when it comes to valuations and p. E. Levels, they are not at nosebleed levels, where are they and where do you think they could go i havent looked today but were looking at 18 times forward earnings ive been in this business for a long time. Weve been at much higher levels for the nasdaq so im not arguing that stocks are cheap, but theyre not running on fumes that is to be sure. Mark, if nancy is right, and my sense is that its the valuations that are a little higher than the average historically that they have been is this a time where you buy the market or youre far more selective and try to buy individual stocks, though indexes have beaten most of the time. I think its a time to be more selective i think you can look at the market today and we talked about the valuations at roughly 18 times p. E. I would argue that is fairly expensive. Its 20, 25 above longer term historical norms 18 times p. E. , 12 times ebitda, thats a little high the nice thing today is Interest Rates are low, inflation is still low. I think you can argue for that. Where do i find bargains . Where do i find value in a market that you describe is a little stretched what we do is we try to focus on companies that have sustainable, competitive advantages so some economic moat around their business and then build around the Balance Sheets. Give me an example. Give me some examples of companies that have those moats. Berkshire hathaway, Southwest Airlines whether its Carnival Cruise line, a number of companies where i think theres moats there and, importantly its called the ocean for carnival, right . Its also a billion dollars to build a shop. How hot is it today in phoenix, nancy its 118. 118 okay enjoy. Oh, yeah. Its not the heat its the humidity. A news alert in the bond market sevenyear notes are up for auction. Rick santelli is tracking it it is a cminus, similar to yesterday at 34 million. The yield of these 28 billion, sevenyear notes lasted 88 in coupon supply. It was 2. 056 it was just a whisker above the big side of 2. 05 so not perfect in pricing 2. 46 bid to cover. It was the lightest since january. Not that long ago. Longterm average is 2. 53. 65. 4 is a little light 9. 4 on directs was also a little bit light. Everything was a little below average, hence the c minus sometimes you get a rally. Not seeing it today. With supply out of the way, i guess all we have to look forward to is more information from Balance Sheet controllers around the globe like mario draghi yesterday you were talking about this, but the big pop in european yields yesterday helped lift american yields a little bit right, rick . Yes tell me more about that. The intersection there is quite simple, that the globe and Light Capital moves, rates are going to follow each other if mario draghi is hinting about an exit with regard to the Balance Sheet, no matter the timeline, market takes it a bit serious. We followed european rates up. Theyve come off a little bit today but not much you can clearly see whether its tens or higher yields before draghis statement and thats very important terrific. Rick, thanks training tomorrow and a worrying sign ahead of it. What does this mean for blue apron as it prepares to go public is this a bad sign for the ipo in general lets bring in the Senior Deputy San Francisco bureau chief and cnbc contributor scott, ill start off with you do you think if they did the pricing last friday before the amazon whole foods deal happened, that this could be a different story altogether it could be i mean, the certainly the valuation is weighing on investors. They slashed the price below what investors Like Fidelity paid two years ago and i think certainly amazon whole foods, when you look at what amazon could do, with suddenly having over 400 distribution points in highend neighborhoods serving premium food, to borrow the shark tank fame, amazon could crush blue apron like the cockroach that it is its growing very quickly. Its revenue is doing well. Its got a brand theres not a lot of barrier there is for other companies to come in. Im sure its weighing on the divor investors minds but their marketing costs are growing as well about 25 of revenue compared to 15 a year ago and thats because they have to keep replenishing their customers and that costs a lot of money. And its up 181 yearonyear herb, i know youre the skeptic. You say they already have so many competitors already before amazon and whole foods tied up. It wasnt just the competitors. It was the 25 discount card i got in the mail. Its not just one i mean, i know i got the offer again and again and again. It would be one thing if they made the food for me but when you look at any of these, you could extend it to uber. When youre talking to the uber driver and they say how they are being subsidized, youre like, what happens when this goes public it doesnt guarantee its going to be what the private investors thought they were. Blue april, the latest example. Should we worry, herb, about the fact that their s1 says they may never, ever make money . Well, thats a lot of Companies Say that. Every single one of them. And by the way many of them never did. Well, those boilerplates are there for a reason they can point back to them. Look, weve been in periods like this so many times before and to try to Say Something like, you know, does this top the ipo market who knows. Its a company trying to make an exit at a time that isnt appropriate for them. Leslie picker is squoinijoins she was on squawk box earlier. Have you heard a positive word about this company yet going public during these discussions today . I have been looking for one, michelle, and im having a hard time finding that. Herb brought up a great point. The timing they decided to go out right after this amazon whole foods deal was announced are they rushing this out before things get worse, before they face a momentous amount of competition . I think thats why were seeing so much skepticism heres the thing. The world is so contrarian on this ipo i mean, its so negative i am so negative weve all cited the very obvious things. The sentiment of snap going into its ipo, its got giant competitors in facebook or which ever competitor that you want that is bigger than snap and was there this shout that snap had to get things out before things turned yeah. Are we looking at everything with such a skeptical eye these days absolutely. I think blue apron really needs the cash they had about a quarter left of burn they raised debt to help them out but they are spending money like crazy right now there are all of these facebook offers in my facebook field, these blue apron coupons. As we look at these Meal Delivery services, we have half a dozen of them over there im familiar with hello fresh. I like what they deliver its a good product. Its not an inexpensive product. How many of these brands, scott, are going to be out there as standalone brands in three years . Not many. Look at ecommerce how many can you really name that have done well . Zulilly was supposed to be ecommerce ipos. Weve had other companies try and amazon is the brand name the consumer side is just very difficult. The company doing well are would you put your money in any of these, herb well, you could have asked me the same question about web van back at the 1990s and i could argue that it was just an idea that was a little too early. Yep. By 20 years and maybe 20 years from now well say, what a great idea this was and who so you just never know i was going to ask the opposite question of tyler herb, would you recommend shorting blue apron when it goes public well, since we havent done one ounce of work on it since will you be looking into it we dont recommend shorting or doing anything like that. We would put up risk it was a highrisk situation based on everything that was disclosed based on everything that we know about it, especially the Customer Acquisition costs and the level of competition so that would be big, red flags for us, you know, assuming we looked at it which we have. All right scott, herb, leslie, thank you coming up in the next hour, well speak with a blue apron competitor called freshly and they actually do cook the food for you. All this week were debating specific issues with health care today were tackling this question should the Drug Companies not be allowed to advertise directly to consumers . Spun cc. M. At porlchnbcomyace is coming, i un. Were back after this. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. You see a drug for gout and you think we should stop that . Its a huge industry. I can tell you why. The consumers who dont understand the sophisticated issues about these drugs take the name of the drug into the doctor and say, will you write me this prescription too many of them just do that drives up the costs for health care that are not effective or not really necessary. That was senator dick durbin speaking with me this morning on morning joe. His point is that we could save billions of health care if Drug Companies were barred from advertising the drugs directly marketed to consumers on tv, magazines and newspapers does he have a point 3 billion to prescription now to 45 billion far outpacing the costs. Doctor, the senators point is, people see this stuff and say, i have an itchy back im going to tell the doctor what i need. How serious of a problem is that do you agree we should ban directtoconsumer advertising well, first of all, its a pleasure to be on. Im a physician and i practice internal medicine and theres a great deal of evidence out there that directtoconsumer advertising stimulates prescriptions to be written for expensive medications, in many cases where those medications are not clinically indicated there may be lower cost options, generic drugs for conditions that arent being advertised but what we see is when patients do bring these specific advertising directed requests into physicians, physicians in many cases write the prescription for the products there are plenty of other data supporting what senator durbin has to say john camp, what are your thoughts ban it or let people make up their own minds . Is this the kind of bread i want, these are the kind of pills i want those who want to ban for directtoconsumer drugs are voting for ignorant among the american people. We believe that the best decisions are made when doctors and patients have good conversations that are based on facts. I disagree with the doctor on the idea that docs are automatically going to prescribe a drug that is asked for theres really Good Research, a doctor out of california has done some Good Research and found that when patients ask for a specific drug, they dont necessarily get it but they do get the standard of care in their area i so i think that we need to be very careful of what we are doing in america. Respond to what john kamp just said but is the problem that you pinpoint in your earlier answer, does it really have to do with the advertising or is the more central problem the relationship between the doctor and patient, that the doctor doesnt step up and say, okay, you bring me this advertisement for an 86,000 a year hep c medication and theres one that will work fine for you at 9,000 a year isnt that really what we ought to be focusing on here well, i do think you have to focus on the advertising itself because, in many cases, the advertisements do not show a full picture of the product that they make. So why dont you . Are doctors wimps . Its the doctors job to say, actually, that doesnt apply to you. Youre telling me as an industry that you cant no, i think doctors can do that but it is there is a limbed amou limited amount of time and a lot of things to go over im not saying this is right or wrong. The data shows that in many cases doctors will how do you handle it . I try to sit down and have a full conversation with them and explain the benefits and risks of the medications they saw on television and if there are other medications that are better or more appropriate for them it takes time and, in many cases, again, im not trying to blame physicians because they have a lot to take care of in a limited period of time and these kinds of requests that are driven by advertising, patients can get the wrong impression about the product because it doesnt fully describe the risks or may misrepresent doctor, time is tight john, you talked about ignorance. Shouldnt we be a little ignorant about this . This is specialized stuff. Thats why this doctor goes to school for stuff like this eight years after college, including residency. Do americans need to understand all that stuff complicated medical stuff . No, they dont need to understand all of the complicated medical stuff. What they need to know is that theres an option available to them that they can have a reasonable discussion with their doctors about those options. Doctors arent stupid. They are incredibly intelligent people my doctors like the conversations that i have with them about the kpgoptions that e available to me because it means that im clearly invested in my medicines and the treatments that are available to them i think we need to have those conversations with doctors and patients so that doctors can make the decisions that are appropriate. John kamp and doctor, thank you for joining us. The question i have, if the u. S. Did ban directtoconsumer advertising, would that actually lower the cost of drugs . Why is there a notion that if Drug Companies dont spend that money, that that will go to the cutting of prices . Im not convinced. I guess the answer to that and im just speculating we did 4. 1 billion prescriptions filled last year lets say that cuts down by 15 . Insurance Companies Pay about 75 of your drug costs you take those costs out of the system a lower total expense one thing that would be true is that lots of Media Outlets and magazines. Would suffer. Would suffer massively. Because these are not just quick ads. They are long ads. Oh, yeah. The side effects. Its 5 pitch and 75 disclaimer. Absolutely. Whether thats in print or on television. Yes. And literally, the disclaimer is the majority of the ad. They have these incredible go to the hospital. Obviously anyway side effects of turning green and dying. All right. Now its your turn do you think its time to ban drug ads you can email us. A lot of email going on lately. Powerlunch cnbc. Com. Your response is at the end of the show will traditional retirement plans, Pension Plans soon be a thing of the past . Im shocked plus, jury selection in the New York Knicks<\/a> president they were 80166 in his full three seasons. And for the first time ever, samsung will build appliances right here in america. It will open a factory in South Carolina<\/a> creating more than 950 jobs by 2020. Im Tyler Mathisen<\/a> a rally today. Financials, industrials are leading the way at this hour one stock were watching is fedex. The stock is higher after it said there was no data breach to the tnt express unit but there could be a possible Financial Impact<\/a> from a disruption in operations lets get the latest on this rock them, sock them rally in this edition of power lunch. Bob pisani is on the floor of the nyse hi, bob. Reporter there doesnt seem to be anything in the way of the market ramp. Lets look at the internals right now. We open 5 to 1 thats a good open it stayed that way throughout the whole open the volume is moderate lifting quietly and volatility keeps dropping we know that story, too. Sector, its this rotation again. Oil service names, bank names and retail names, whatsectors are trading for the upside oil service names, bank names and retail they are leading as well here and how about the banks starting to see the move forward. Weve been telling you about the results this afternoon who will be able to buy back more stock citigroup on many peoples list for increasing the dividend as well stabilization with the tenyear is helping as well and to look at oxlf, even in europe you see the europe banks strong again from an ecb banking forum. Some may get the green light to buy back capital or buying back a return capital michelle, wouldnt that be something to see something happen with the european banks as well . Again, remember, 2 1 2 days away from the end of the quarter. Michelle thank you, bob. We already talked about the stock market but fed chair janet yellen saying that its looking somewhat rich if you have some traditional metrics and John Williams<\/a> saying that the stock market is running on fumes are they right nancy, when i looked at the Market Reaction<\/a> today, its like they look at these people as contrarian i contrarian indicators. What do you think . It always makes me nervous when the fed is talking about the stock market and the comment that its running on fumes is ludicrous and the market is responding to that the majority has been driven by earnings growth, somewhere over 60 . And the rest is multiple expansion. Still, were not at nosebleed levels in terms of multiple expansion. Give me a number. What are you looking at in forward earnings, for example . What am i looking when when it comes to valuations and p. E. Levels, they are not at nosebleed levels, where are they and where do you think they could go i havent looked today but were looking at 18 times forward earnings ive been in this business for a long time. Weve been at much higher levels for the nasdaq so im not arguing that stocks are cheap, but theyre not running on fumes that is to be sure. Mark, if nancy is right, and my sense is that its the valuations that are a little higher than the average historically that they have been is this a time where you buy the market or youre far more selective and try to buy individual stocks, though indexes have beaten most of the time. I think its a time to be more selective i think you can look at the market today and we talked about the valuations at roughly 18 times p. E. I would argue that is fairly expensive. Its 20, 25 above longer term historical norms 18 times p. E. , 12 times ebitda, thats a little high the nice thing today is Interest Rates<\/a> are low, inflation is still low. I think you can argue for that. Where do i find bargains . Where do i find value in a market that you describe is a little stretched what we do is we try to focus on companies that have sustainable, competitive advantages so some economic moat around their business and then build around the Balance Sheet<\/a>s. Give me an example. Give me some examples of companies that have those moats. Berkshire hathaway, Southwest Airlines<\/a> whether its Carnival Cruise<\/a> line, a number of companies where i think theres moats there and, importantly its called the ocean for carnival, right . Its also a billion dollars to build a shop. How hot is it today in phoenix, nancy its 118. 118 okay enjoy. Oh, yeah. Its not the heat its the humidity. A news alert in the bond market sevenyear notes are up for auction. Rick santelli is tracking it it is a cminus, similar to yesterday at 34 million. The yield of these 28 billion, sevenyear notes lasted 88 in coupon supply. It was 2. 056 it was just a whisker above the big side of 2. 05 so not perfect in pricing 2. 46 bid to cover. It was the lightest since january. Not that long ago. Longterm average is 2. 53. 65. 4 is a little light 9. 4 on directs was also a little bit light. Everything was a little below average, hence the c minus sometimes you get a rally. Not seeing it today. With supply out of the way, i guess all we have to look forward to is more information from Balance Sheet<\/a> controllers around the globe like mario draghi yesterday you were talking about this, but the big pop in european yields yesterday helped lift american yields a little bit right, rick . Yes tell me more about that. The intersection there is quite simple, that the globe and Light Capital<\/a> moves, rates are going to follow each other if mario draghi is hinting about an exit with regard to the Balance Sheet<\/a>, no matter the timeline, market takes it a bit serious. We followed european rates up. Theyve come off a little bit today but not much you can clearly see whether its tens or higher yields before draghis statement and thats very important terrific. Rick, thanks training tomorrow and a worrying sign ahead of it. What does this mean for blue apron as it prepares to go public is this a bad sign for the ipo in general lets bring in the Senior Deputy<\/a> San Francisco<\/a> bureau chief and cnbc contributor scott, ill start off with you do you think if they did the pricing last friday before the amazon whole foods deal happened, that this could be a different story altogether it could be i mean, the certainly the valuation is weighing on investors. They slashed the price below what investors Like Fidelity<\/a> paid two years ago and i think certainly amazon whole foods, when you look at what amazon could do, with suddenly having over 400 distribution points in highend neighborhoods serving premium food, to borrow the shark tank fame, amazon could crush blue apron like the cockroach that it is its growing very quickly. Its revenue is doing well. Its got a brand theres not a lot of barrier there is for other companies to come in. Im sure its weighing on the divor investors minds but their marketing costs are growing as well about 25 of revenue compared to 15 a year ago and thats because they have to keep replenishing their customers and that costs a lot of money. And its up 181 yearonyear herb, i know youre the skeptic. You say they already have so many competitors already before amazon and whole foods tied up. It wasnt just the competitors. It was the 25 discount card i got in the mail. Its not just one i mean, i know i got the offer again and again and again. It would be one thing if they made the food for me but when you look at any of these, you could extend it to uber. When youre talking to the uber driver and they say how they are being subsidized, youre like, what happens when this goes public it doesnt guarantee its going to be what the private investors thought they were. Blue april, the latest example. Should we worry, herb, about the fact that their s1 says they may never, ever make money . Well, thats a lot of Companies Say<\/a> that. Every single one of them. And by the way many of them never did. Well, those boilerplates are there for a reason they can point back to them. Look, weve been in periods like this so many times before and to try to Say Something<\/a> like, you know, does this top the ipo market who knows. Its a company trying to make an exit at a time that isnt appropriate for them. Leslie picker is squoinijoins she was on squawk box earlier. Have you heard a positive word about this company yet going public during these discussions today . I have been looking for one, michelle, and im having a hard time finding that. Herb brought up a great point. The timing they decided to go out right after this amazon whole foods deal was announced are they rushing this out before things get worse, before they face a momentous amount of competition . I think thats why were seeing so much skepticism heres the thing. The world is so contrarian on this ipo i mean, its so negative i am so negative weve all cited the very obvious things. The sentiment of snap going into its ipo, its got giant competitors in facebook or which ever competitor that you want that is bigger than snap and was there this shout that snap had to get things out before things turned yeah. Are we looking at everything with such a skeptical eye these days absolutely. I think blue apron really needs the cash they had about a quarter left of burn they raised debt to help them out but they are spending money like crazy right now there are all of these facebook offers in my facebook field, these blue apron coupons. As we look at these Meal Delivery<\/a> services, we have half a dozen of them over there im familiar with hello fresh. I like what they deliver its a good product. Its not an inexpensive product. How many of these brands, scott, are going to be out there as standalone brands in three years . Not many. Look at ecommerce how many can you really name that have done well . Zulilly was supposed to be ecommerce ipos. Weve had other companies try and amazon is the brand name the consumer side is just very difficult. The company doing well are would you put your money in any of these, herb well, you could have asked me the same question about web van back at the 1990s and i could argue that it was just an idea that was a little too early. Yep. By 20 years and maybe 20 years from now well say, what a great idea this was and who so you just never know i was going to ask the opposite question of tyler herb, would you recommend shorting blue apron when it goes public well, since we havent done one ounce of work on it since will you be looking into it we dont recommend shorting or doing anything like that. We would put up risk it was a highrisk situation based on everything that was disclosed based on everything that we know about it, especially the Customer Acquisition<\/a> costs and the level of competition so that would be big, red flags for us, you know, assuming we looked at it which we have. All right scott, herb, leslie, thank you coming up in the next hour, well speak with a blue apron competitor called freshly and they actually do cook the food for you. All this week were debating specific issues with health care today were tackling this question should the Drug Companies<\/a> not be allowed to advertise directly to consumers . Spun cc. M. At porlchnbcomyace is coming, i un. Were back after this. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors<\/a> think. With objectives like building capital for the future, managing Portfolio Risk<\/a> and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment<\/a> objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. You see a drug for gout and you think we should stop that . Its a huge industry. I can tell you why. The consumers who dont understand the sophisticated issues about these drugs take the name of the drug into the doctor and say, will you write me this prescription too many of them just do that drives up the costs for health care that are not effective or not really necessary. That was senator dick durbin speaking with me this morning on morning joe. His point is that we could save billions of health care if Drug Companies<\/a> were barred from advertising the drugs directly marketed to consumers on tv, magazines and newspapers does he have a point 3 billion to prescription now to 45 billion far outpacing the costs. Doctor, the senators point is, people see this stuff and say, i have an itchy back im going to tell the doctor what i need. How serious of a problem is that do you agree we should ban directtoconsumer advertising well, first of all, its a pleasure to be on. Im a physician and i practice internal medicine and theres a great deal of evidence out there that directtoconsumer advertising stimulates prescriptions to be written for expensive medications, in many cases where those medications are not clinically indicated there may be lower cost options, generic drugs for conditions that arent being advertised but what we see is when patients do bring these specific advertising directed requests into physicians, physicians in many cases write the prescription for the products there are plenty of other data supporting what senator durbin has to say john camp, what are your thoughts ban it or let people make up their own minds . Is this the kind of bread i want, these are the kind of pills i want those who want to ban for directtoconsumer drugs are voting for ignorant among the american people. We believe that the best decisions are made when doctors and patients have good conversations that are based on facts. I disagree with the doctor on the idea that docs are automatically going to prescribe a drug that is asked for theres really Good Research<\/a>, a doctor out of california has done some Good Research<\/a> and found that when patients ask for a specific drug, they dont necessarily get it but they do get the standard of care in their area i so i think that we need to be very careful of what we are doing in america. Respond to what john kamp just said but is the problem that you pinpoint in your earlier answer, does it really have to do with the advertising or is the more central problem the relationship between the doctor and patient, that the doctor doesnt step up and say, okay, you bring me this advertisement for an 86,000 a year hep c medication and theres one that will work fine for you at 9,000 a year isnt that really what we ought to be focusing on here well, i do think you have to focus on the advertising itself because, in many cases, the advertisements do not show a full picture of the product that they make. So why dont you . Are doctors wimps . Its the doctors job to say, actually, that doesnt apply to you. Youre telling me as an industry that you cant no, i think doctors can do that but it is there is a limbed amou limited amount of time and a lot of things to go over im not saying this is right or wrong. The data shows that in many cases doctors will how do you handle it . I try to sit down and have a full conversation with them and explain the benefits and risks of the medications they saw on television and if there are other medications that are better or more appropriate for them it takes time and, in many cases, again, im not trying to blame physicians because they have a lot to take care of in a limited period of time and these kinds of requests that are driven by advertising, patients can get the wrong impression about the product because it doesnt fully describe the risks or may misrepresent doctor, time is tight john, you talked about ignorance. Shouldnt we be a little ignorant about this . This is specialized stuff. Thats why this doctor goes to school for stuff like this eight years after college, including residency. Do americans need to understand all that stuff complicated medical stuff . No, they dont need to understand all of the complicated medical stuff. What they need to know is that theres an option available to them that they can have a reasonable discussion with their doctors about those options. Doctors arent stupid. They are incredibly intelligent people my doctors like the conversations that i have with them about the kpgoptions that e available to me because it means that im clearly invested in my medicines and the treatments that are available to them i think we need to have those conversations with doctors and patients so that doctors can make the decisions that are appropriate. John kamp and doctor, thank you for joining us. The question i have, if the u. S. Did ban directtoconsumer advertising, would that actually lower the cost of drugs . Why is there a notion that if Drug Companies<\/a> dont spend that money, that that will go to the cutting of prices . Im not convinced. I guess the answer to that and im just speculating we did 4. 1 billion prescriptions filled last year lets say that cuts down by 15 . Insurance Companies Pay<\/a> about 75 of your drug costs you take those costs out of the system a lower total expense one thing that would be true is that lots of Media Outlets<\/a> and magazines. Would suffer. Would suffer massively. Because these are not just quick ads. They are long ads. Oh, yeah. The side effects. Its 5 pitch and 75 disclaimer. Absolutely. Whether thats in print or on television. Yes. And literally, the disclaimer is the majority of the ad. They have these incredible go to the hospital. Obviously anyway side effects of turning green and dying. All right. Now its your turn do you think its time to ban drug ads you can email us. A lot of email going on lately. Powerlunch cnbc. Com. Your response is at the end of the show will traditional retirement plans, Pension Plans<\/a> soon be a thing of the past . Im shocked plus, jury selection in the Martin Shkreli<\/a> case. Finding jurors is a problem. We have the latest on that next. At johnsons we care about safety as much as you do. Thats why we meet or exceed 15 global regulations for baby products. And where standards differ, we always go with the toughest. Johnsons. Announcer cnbc news update is sponsored by comcast business built for business hi, everybody. Im sue herera heres your cnbc update for this hour russian president putin says russia intends to grow its military potential further he spoke at a ceremony for military and Police Academy<\/a> graduates. He said the only powerful armies forces can protect russia from possible threats a fire burning in california has had a devastating impact on that area in central, california they are fighting hot spots right now. Some people are returning to their homes finding that they were destroyed the blaze is 40 contained. More than 68,000 chest of drawers sold online are being recalled because of serious dangers of tipping over. And wine, anybody . A japanese logisticscompany teaming up with an Artificial Intelligence<\/a> developer to create a robot to determine your favorite taste in wine theres been a 48 rise in sales. Thats the news update at this hour michelle, back to you. Thank you, sue. The dow and s p having the best oneday gain in two months. S p is higher by 23, a gain of nearly 1 . Nasdaq is up more than 1 , actually, 1. 25 . Cboe, Northern Trust<\/a> and delta and sherwinwilliams are at the highest. At oneweek lows, marathon, anadarko and newfield. Lets head to dominic chu. In the entire sector, the stocks are on the highest rise jpmorgan and Goldman Sachs<\/a> helping to lift the dow overall. Check out the ticker xlf it appears over the last three days those traders have stepped up to buy that dip guys, back over to you. Dom, thank you. Workers at ups break decades of a tradition and freeze Pension Plans<\/a>. Morgan ups will freeze Pension Plans<\/a> for nonunion workers and will contribute to any beyond savings employee matched the move speaks to a big trend incorporate america right now. Ballooning pension liabilities and the effort to quell them ups had a nearly 10 billion pension shortfall. So in light of this, weve got more plans that are being frozen with employers shifting to hybrid pensions and defining Contribution Plans<\/a> like those 401 k s. From 1998 to 2015, the percentage of fortune 500 employers still offering the defined benefit plans to new hires fell from 59 down to 20 . And 39 had frozen pension plan altogether some of the names that have frozen plans kimberlyclark, boeing, aig, u. S. Steel, just to name a few Many Companies<\/a> like gm and united tech and last month, sears, are now offloading those obligations to insurers. Most notably, prudential and metlife, this makes the Balance Sheet<\/a>s less volatile and creates a source of growth for multiline insurers so were seeing a shift away from traditional pensions and then were seeing those frozen Pension Plans<\/a> shifted to insurers guys morgan, thank you morgan brennan. Its day three in court for Martin Shkreli<\/a> who is being charged with price gouging hes so disliked that the court is struggling to find impartial jurors this could be a big problem for the case, meg. It could be we were expecting opening arguments could have started at the end of day one or maybe the beginning of day two weve been sitting at the courthouse they have reached a pool of 60 prospective jurors from which they are going to narrow down to 12 you can see shkreli arriving there this morning from the 60, they will widdle down to 12 and 6 alternates. A lot of people had potential scheduling issues. A lot of people saying i cant get away for six weeks a lot of people expressed opinions that they had about him coming into the courtroom that they said would make them unable to be fair to impartially weigh the facts of the case. One person telling the judge, in this particular case, the only thing id be impartial about is which prison he goes to. That will get you disqualified. I think a defense would throw a pitch. Maybe and just looking at him kind of twists my stomach. And a third person saying, he disrespected the wutang clan. So now that weve reached the 60, they have gotten through the people who said they couldnt be impartial. What did he do with the wutang clan he purchased it for 2 million. It was a oneoff album. Songs that have never been heard by anybody and he bought it and said he wouldnt play it for anybody. Now you get it, right so the wutang members are like, we didnt want this guy to buy the album. It shows the frustration that people have with drug prices thats what a lot of people who have issues coming into the courtroom have expressed. Thank you, meg. Still ahead, look, no hands. Gm upping the ante in the Autonomous Vehicle<\/a> race. Look at that there is all of the technology in the cars the answer to fixing distracted driving or is it making it worse . Well ask someone who makes his living behind the wheel for nascar well be right back. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security<\/a> helps protect business, from the largest Financial Markets<\/a> to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. [ intense music playing ] ] its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the e300 for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Welcome back to power lunch. The dow is near session highs on track for the best days since the start of the month all components positive on the day so far leaders include jb hunt and matson and ryder there are reports coming out of tesla that bmw may release an electric vehicle keep an eye on it, guys. Michelle, back to you. Thanks, dom speaking of cars, gm is upping the ante in the super Cruise Control<\/a> system in a new cadillac phil lebeau is in california with more. Reporter im driving handsfree im on 280 heading into San Francisco<\/a>. This is super cruise technology. We have a couple of shots here you can see im driving handsfree as were going down the highway. Were going to raise the speed here you can use this up to 85 Miles Per Hour<\/a> and its only technology that can be used to drive handsfree on the highways. You cant use it in the neighborhood if you look at this camera right here, this camera right here on the steering column, this allows the car to check your eyes, your head position to ensure that youre always paying attention which then raises the question, what happens if im one of those people who insists on texting or if i get drowsy while im driving . Watch what happens when my eyes leave the road for too long. Were not endorsing texting and driving but look, im holding a smartphone and at some point the car is going to take control and say, i need to take control. There you go you hear the alarm red light comes up here. And now im back in control. If you continue to ignore these warnings, lets say youve fallen asleep, driving late at night and youre not hearing these warnings, the car will continue to alert you. Then the hazard flashers will come on. The car will slow down and eventually come to a stop and then an onstar operator will reach out to you and say, whats going on did you have a heart attack . Are you asleep youve got to take control of the vehicle. Once again, ive reengaged it and were driving handsfree. Guys, General Motors<\/a> and cadillac believe this is a gamechanger it can allow people to go long stretches if you dont want to engage the vehicle if you dont want to. You need to engage the wheel to lane change. If youre going from chicago to st. Louis, you can do virtually the whole drive like this without having to ride the brake or the accelerator or to hold on to the steering wheel. It seems a lot like autopilot, phil. Even down to the point where it alerts you to slow and then eventually stops the vehicle reporter but autopilot does not have the camera and thats what cadillac points out is a key difference here. This camera allows them to say, we know youre not paying attention. Again, were not endorsing this, but if you were to close your eyes, im closing my eyes. At some point the car will know youre not paying attention and when youre not paying attention, the car will say, okay, youve got to see, its been in the same lane. And then it will tell you it didnt beep, though. You had your eyes closed for a long time. You can keep your sunglasses on ive had this question all day long the system cant see your eyes, how does it know where you are its facial recognition and relative to what is going on out on the highway ahead of you. Very cool technology, guys. The camera may not have noticed that you had your eyes closed but some of the drivers that passed you did. Very alarmed i think ive lost you can you hear me . Yes i hear you ill send it back to you and take it from here. So is this push to create more seemingly smart cars going to make us safer on the road or is all of this Technology Going<\/a> to lead to maybe more distracted driving . Paul is editor of the revs institute. This Cadillac Technology<\/a> sounds to me a little bit like an inbetween way to move to autonomous driving in other words, you still have to pay a lot of attention here you cannot completely check out. So why have autonomous drive well, youre exactly right, tyler. This is sort of a stop gap or interim step on the way to full autonomy but the fact that this system is checking to see whether youre still engaged means you have to be engaged yeah. In the industry, these things are known as drive state sensing. But the other thing that those initials could stand for is driver spy system, right youre being monitored in your own car which some people may find freaky. The question is, honestly, even if this sends an alert to get reengaged, can you instantly, after a period of sort of relative disengagement, can you get reengaged instantly in an emergency even with this system . And thats really unclear, to be honest with you. Paul, i dont see driverless being worth it until i dont have to look anymore at all, until i can sit in the back seat they are teasing us with all of this stuff but when are we going to get there are we ever going to get there thats a big debate in the industry in some companies, for example, google is really emphasizing we ought to skip this interim step and go to full autonomy. Yep theres a government terminology. Theres Different Levels<\/a> l1, 2, 3, 4, et cetera. I think it stops at 4 or 5 but full autonomy is an l4 and google is an l4 approach while most of the auto industry, not every car company is more on the l3. Well get you there partially step by step the government is going to have to decide this at some point, honestly the government or insurers are going to have to decide. Or the consumer. Or the consumer yes. Theres a lot of dynamics. But whats legal and what will consumers accept in the end, im absolutely convinced that Driverless Technology<\/a> will save a lot of lives, be better for the environment and that sort of thing. The big question is, how do we get there . What are the steps and are some of these interim steps really that beneficial if you have to remain engaged anyway . Paul, thank you very much, from naples, florida. Get ready, folks, nascar returns to nbc this saturday night at 7 00 p. M. Eastern time. Clint boyer is going to be in it thank you for joining us. Thanks for having me on before we get into nascar and youre a businessman as well, semiserious question were talking about distracted driving. Yeah. Are you more nervous on the highway . Im not kidding. Or the track. You know, probably more frustrated on the highway. You see so many times somebody swirling all over the road and there they are on their phone and youre like, what are you doing, man focus. Distracted driving is a worry for everybody. Its a problem its real and alive and weve got to get to the bottom of it because we have to go both left and right in life. Exactly. Lets talk about your business you own the Clinton Bowyer<\/a> business how do you see the economy how are your car sales doing how is the business of bowyer . I think the business of nascar is alive and well thats my business, right . I race on sunday and hopefully sell on monday and that aspect has rang true with this sport. The networking and partnerships behind all of these races. As you see, a respon a sponsor t car, hopefully you can connect the dots with their business and the next business. Its a ton of fun. Youre not just a driving holding a wheel. Youve got to be a spokesperson for all of these companies and do your job outside as well. You should have been sponsored by duct tape because the front of your car was totally covered. I tore it up, didnt i . You finished second thats great we see people switching sponsors after the financial crisis it looks like things have gotten more focus its gotten more focus. The networking behind these partnerships, thats the fun part about it. You cant lose sight of that you get a new opportunity, a new partner coming in, you want to be able to figure their world out. How can i connect the dots and get more sponsors. Thats how it works. And its going to work in a big way on saturday night. Clinton bowyer, i predict a big win for you. My predictions never come true but this one will. Its 7 00 p. M. On saturday night. He hes been hot. Back to you. Power rundown is next. I need the phone thats where i happen to be. To be the one that rings. I need not to be missed phone calls. To not be missed. I need seamless handoff. Canyon software. From reception, to landline, to mobile. I need one number. Not two. Im always moving forward. Because i cant afford to get stuck in the past. Comcast business. Built for business. Time for the power rundown three big stories making news today. President trump ticked off and tweeting, quote the amazon wos sometimes referred to as the guardian of amazon not paying internet taxes which they should, is fake news it comes after the Washington Post<\/a> put out a story a fake issue of Time Magazine<\/a> was hanging in some of the president s golf clubs what are internet taxes sales tax i thought amazon was collecting yes you know, i assume amazon do what the president does, and that is to stay pay as little tax as the law requires. Which is fair its legal. And we can deduce that amazon is in the president s sights i mean, whether or not he can do anything about whole foods hes got his eye. Its in the sights because he doesnt like the Washington Post<\/a> and its conch of it. He slammed amazon before bezos bought the Washington Post<\/a>. For anticompetitive. Too big, too powerful. Hes very good at ill say this, his main beef has to do with the Washington Post<\/a> coverage dont you think hes good at surfi surfing the zeitgeist of the moment he thinking there is a swath of the population its sort of an odd tweet can we agree on that yes add it to the list. Forget about the content, just the word structure. Okay. I think word structure is not his reals occupation. Topic two, representative Jason Chaffetz<\/a> says they could have been a Housing Allowance<\/a> to help ease of pain of the d. C. s pricey market, 2500 a month. Hes leaving his position, right . So i think all of his other colleagues put him up to this, because he doesnt he doesnt have to run, so he can say this i agree with it, though. Why because ill bet you we find first off the cost of travel a lot of these guys go home every weekend, the flights, i dont know if thats reimbursed. So if it keeps them around to work more . I think we should the United States<\/a> government should buy a dormitory in the outskirts of and make everybody stay in that dormitory as Public Servants<\/a> of the United States<\/a>. Wow. Do they get to see visitor as after 10 00 p. M. , melissa . [ laughter ] probably solve some other lastly here, we hear every year americans are getting heavier. It appears or pets are as well a new report by banfield pet hospital found one in three pets who visited their facilities was overweight or obese. Are we surprised . No. Thats what happens to children, it happens to pets. Do you have a dog i have two cats. Are they obese . Probably not, because youre not. No, one is probably a little heavier than it should be, but the reason i ask is our viewers probably know this, if you have a dog, my dog is almost 18, so he gets to eat whatever he wants you go to the pet food store and its turned into gourmet aisle theres 4 cans of stew you would consider eating if you were hungry and there was nothing else so i think maybe theres too many pet food options. Some of it looks good. Tasty little things. Any port in the storm, tyler. Im asking for a friend. Speaking of health the pate look good on cracker. Remember prince of tidess abusive father shall she served of dog food now, this is food. The real segue, the problem with health care, it may be not who is paying, but how much we are paying how do we fix that thats ahead in the second hour of power n it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management<\/a> firms in the country. Discover how we can help find your unlock. At johnsons we care about safety as much as you do. Thats why we meet or exceed 15 global regulations for baby products. And where standards differ, we always go with the toughest. Johnsons. You realize the smartest investing idea, isnt just what you invest in, but who you invest with. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual<\/a> wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you\u2122 Liberty Mutual<\/a> insurance. At crowne plaza we know Business Travel<\/a> isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance<\/a> and speed across all your locations. Hello, mr. Deets. Every Branch Running<\/a> like headquarters. Thats how you outmaneuver. Welcome to the second hour of power lunch. Are we focused on the wrong problem . Maybe the issue isnt who pays, but how much we are paying for the treatment itself plus Warren Buffett<\/a> called the new Health Care Bill<\/a> the relief for the rich act. Is he right . A deeper dive as to what taxes will be cut and who benefits. Blue apron gets set to go public, and well competent is a competitor freshly could they be next in line for an ipo power lunch starts right now strong day, the major averages, financials are leading the way, the feds record cart, you can see the dow is higher by 160 points s p financials higher by 1. 66 , and some beaten down names are rebounding trip divorce, transocean down 40 , kroger down 30 this year, but today those names are leading the s p 500. Tripadviser up fearly 6 . Well come to the second hour of Powell Powell<\/a> pending home sales missing estimates and dropping in may. Aprils reading revised down, as lower inventory continues to push Prices Higher<\/a> sticking with housing, Mortgage Apps<\/a> dropping more than 6 last week as wealthy buyers step back the averages loan size for home purchasing fell to the lower level since january. After a long search, a jury now apparently has been chosen in the schkreli trial. While Congress Continues<\/a> to argue over how to pay for americas 3 trillion mel care bill, why are more people asking why Health Care Costs<\/a> so much in the first place . Why do we spent so much more we are asking that, and look at some of the staggering growth in perperson Health Care Spending<\/a> according to a Government Research<\/a> paper, per person spending averaged about 9y 200 in 2013. Thats up from just 147 per person in 1960 consider this if Health Care Costs<\/a> rose with the normal race of inflation that 147 would be 1200, instead nearly eight times that why . The biggest cost is the treatment of chronic diseases, which account for 86 of total health spending. Some of those chronic diseases are directly related to things like americas obesity crisis, diabetes and arthritis another thing we spent so much is the huge jump in prescription drugs issued to americans. Much of that related to what we just talked about. A final stats for you. In 1960, america spend just under 3 billion on prescriptions, 55 years later that has grown to more than 45 billion, a change of more than 1500 . Last year more than 4 billion prescriptions were filled at american pharmacies. On squawk box this morning, Toby Cosgrove<\/a> ceo of the Cleveland Clinic<\/a> talked about the alarming issue of cost. I dont think theyre dealing with the root cause of the problem. Its not how you divide the money. The problem is the rising cost of health care. Lets now bring in steven brill, author of New York Times<\/a> bestseller americas bitter pill. Bakley were trying congress has an impossible job, because theyre trying to figure out a way to pay for a system which is probably something you cant pay for, 3 trillion and continuing to grow. Have you been able to identify in your research why we spend so much money on health care, compared to everybody else sure. Sure congress doesnt have an impossible job theyre just doing the wrong cob as Toby Cosgrove<\/a> pointed out theyre fog can yous on the cost of Health Insurance<\/a> premiums, and premiums cost so much, because the health insurers, just like you and me, have to pay for the high cost of drugs and the high cost of hospital stays. Why is that cost so high because in the United States<\/a> we tried an experiment that no other country in the world tried. We decided that were going to make health care a free market product. Hospitals can charge everything they said and they so that the insurance company, if they have to negotiate with the Yale New Haven Hospital<\/a> in new haven, its the only hospital in town, so they have to pay whatever the hospital asks them to pay. So the issue isnt what congress is doing about Insurance Coverage<\/a> the issue is why are we the only country in the free world, for example, that doesnt do something to control the cost of drugs. Because it promotes a tremendous amount of innovation and new drugs, et cetera a lot of people would argue we need a free market in Health Insurance<\/a> where none of us here actually buy it out on the open market, right . We get it through our employers. Excuse me, you interrupted me i thought you had stopped talking. No, i didnt have a chance to finish my point. The Drug Companies<\/a> spend less on r d than they spend either on stock buybacks or on marketing that is a total myth, and the Drug Companies<\/a> are very happy to sell in europe and in asia for half or two thirds the price what they sell for here. So even assuming you were right, what you would be saying is the United States<\/a> has signed up to pay premium for drugs so that they can be less expensive all over the world which isnt true we have long argued that in fact this should be the government getting involved with the World Trade Organization<\/a> and saying to places like japan and germany, why do you you, a rich country, deserve cheap pricecontrolled drugs why are we subsidizing, they dont have cheap you just mentioned that no, i said theyre less. U. S. Companies sell for far cheaper overseas, you dont think theyre bullied into that . I didnt use the word cheap they less at less exorbitant prices the Drug Companies<\/a> in the world, in this country have Profit Margins<\/a>, Gross Profit Margins<\/a> after all that great r d that are higher than google, higher than any industry you can name why is that . Because we give then a monopoly when we give them a patent they can charge anything they want its not that the cost of drugs is cheap in germany, its just that its at slightly higher profit margin, whereas in this countryist double or triple that profit margin. Are they able to are those countries able to sell those drugs or buy those drugs at lower prices, because they have national of course they do. National Health Insurance<\/a> programs that negotiate that price . Of course they do thats exactly right congress doesnt even let medicare, the Largest Consumer<\/a> and buyer of drugs in the world, doesnt even let medicare negotiate the price of drugs. So, you know, youve mentioned, and i think interestingly, the idea that Drug Companies<\/a> are given patents on their discoveries, but shouldnt they i mean, shouldnt they have some period where they benefit from the intellectual ownership of course they should. How would you change that i do it every other country, they apply some control to the prices, so that the ceo of a drug company cant wake up one more and saying, you know, the 200 were charging for this pill, lets make it 1,000, what the heck that is abuse of a monopoly. Every other country does it. This is not Rocket Science<\/a> the same thing with nonprofit hospitals, the same thing with medical devices. We are the only country in the world that does this our health care results are no better, and often worse than every other country. Our costs are 50 to 80 higher why is this such a mystery profits of what bring products to market. But they would have we would have far better products on the market if other countries actually did it our way. So youre saying that if one of the Drug Companies<\/a> only had a 30 margin instead of a 60 margin, im talking net, not gross, that they would just decide lets go out of business, its not worth it . No. Youre making a totally different point than what im making, profit is what brings things to market. No one is against profit. The more you control profit, the fewer products you will get. If you start to squeeze margins, youll get less of it. Its that simple thats the tradeoff that we have accepted in this country, and youre right, i think its completely wrong that other countries try to control Profit Margins<\/a> so much more than we do. Its not fair, theyre wrong, not us steven, lets change the topic. Well, shes very sure of herself. So are you. Im just matching you you think of sing ofpayer system is the way to do. Did i say anything about a singlepayer system. No, but you want a lot more government control that gets closer did i say anything about single payer is that some interview i wasnt involved no, im guess youre using different words to drew i what most countries do. A lot of countries dont have single payer, but they have some controls on profits of a product where the consumer has no choice but to buy that product. Thats not a terribly exotic argument steven brill, we are going to leave it there it was a meaty discussion, a heady issue. This issue of cost at least now people are talking about cost instead of just how to pay somebody is finally asking why does it cost that much steven brill, thank you. Sure enough. Relief for the richard, robert frank joins us now. The senate Health Care Bill<\/a> would reduce tax revenue yet 45 of those gains go to the top 1 . The legislation would repeal the tax hikes imposed by the Affordable Care<\/a> act, as well as the 0. 9 medicare payroll tax surge overall, they would cut household taxes by a total average of 670 a year, middleclass earners would see a tax cut of about 280, about 0. 4 the top 1 gets a tax cud of 45,000, even on a percentage base, much higher, 2 . The richest earnerses those who make 5 million or mo a year, an average tax cut of 250,000, a cut of 2. 5 . Since they pay most of the taxes, and of course lots of people say this isnt a tax cut, just reversing the hikes billions nair could see much of his friends would be saving so million or more are talksing things that wealthy mainly take. So, yeah, its just only been around a couple years im not saying people should be for or against it, but this is something the writers are going to have to address rhetorically its going to be the charge from the democrats. I think the sad part is im not saying its not important, but i think the sad part goes to everything Chuck Schumer<\/a> the other day. Ten seconds into his comments responding to Mitch Mcconnell<\/a> he talked about tax cuts for billionaires no one is talking about why were so sick, why Health Care Costs<\/a> so much. Its clouding the entire serious issue. Its an important economic component. There are people, our views who this matters to. Exactly. Thanks, robert. Oil still below 45 a barrel at what point does this become a problem to the drillers. Is turmoil in d. C. Affecting how c oeismts view the economy all that and more coming up on power lunch. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual<\/a> wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you\u2122 Liberty Mutual<\/a> insurance. A used car, yogigspeed internet. Me . You know whats not awesome . When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids. And these guys. Him. Ah. Oh hello that lady. These houses yes, yes and yes. And dont forget about them. Uh huh. Sure. Still yes you can get it too. Welcome to the party. Introducing gigspeed internet from xfinity. Finally, gig for your neighborhood too. Time for street talk Analyst Recommendations<\/a> on the stocks you need to know about citi initiating coverage on big insurers, humana and aetna specifically also added to citis u. S. Focus list the firm believes the stock has a strong position with the market the analyst also setting a buy rating 275 price targets on humana saying its built a coveted franchise, and that should deliver strong growth. One angle health care we havent talked about is the impact on companies, they must be switching constantly when these new bills come out its hard its hard to handicap it. Were giving you a shoutout, analysts, a little love. Goldman sachs adding to the conviction buy list. That is about 14 up side. The analyst at goldman says theres an improving story, assumptions seemed conservative with margins he thinking theyll gro up, with Asset Servicing<\/a> and think that is buybacking will drive about 15 earnings growth. State street bank up about 2 maybe on the call. Clearly financials have had a great twoday run here, right . Carries about 3 over the past two sessions alone next up, square. With a buy rating calling it the tesla of payments. Youre the tesla of anchors. I dont know what i ill think about what you are, brian. The target is 28, worth noting the firm is also starting coverage on visa with a buy rating, one of the reasons why increased credit card usage in japan which could add a billion in incremental revenue thats big in japan last but not least, generally your smallcap call. Its Blackhawk Network<\/a> californiabased provides of things like gift cards and prepaid telecom on cards bimo up to outperform, recently met with management, analyst is comfortable with amazons entry. They note that blackhawk works with amazon and whole foods already. Stock was already above 40, so i get it, its a smidge about 15 total return today, but i guess the concern again is if people are not going into stores, would they not buy gift cards . This analyst said, dont worry, it works with everything. Crude oil still down over 10 over the past month. Here as the Continental Resources<\/a> ceo hamm had to say earlier on squawk. This is not sustainable we know that, in the 40s, you know, needs tore north of 50 for sure, and to be sustainable in the world. While this period of adjustment is going on, producers dont want to drill themselves into oblivion. So can we head back above 50 . And what happens if we do not. Lets bring in den knit gartman. Always good to see you. Good to be seen. Were at this point in oil where it seems like everything that should be right is wrong. We have the dollar down here to date whats your bias now it depends on ones perspective. If youre talking 20 years, lower still. Ill go with the deputy crown prince of saudi arabia, muhammad bin salman, who has made it abundantly clear that he thinking crude oil in the next 20 years will be essentially worthless, perhaps we could get a rally in wti back to 48, maybe 49 at the best, but given the fact you have a positive carry from overnight to two to three years, if you have wti back to 48, two years forward would be about 51, 52, and drillers would be more than happy to supply all that these possibly could, sell that forward, earn the cotango and produce on mr. Hamm is one of the fathers of fracking, he is a genius, and the country owes him thanks for doing what we have been able to do, which is turn the United States<\/a> into a net supplier of crude to the world, but i think he misses the fact that were not the only people that will be fracking. Lets remember one of the outcomes of the President Trump<\/a> visit to saudi arabia was all these deals with fracking companies. Halliburton and schlumberger bay be exporting some of that technology, good for the companies, bad for oil prices, but i noticed something, roberto friedlander, an analyst at seaport global, iraq is now sending nearly as much oil to the United States<\/a> as saudi arabia iraq on the ascension and just blowing through every barrier that anybody trying to set for them. Take a look at whats gone on in libya. Libya as well a year and a half ago they were producing a quarter of a Million Barrels<\/a> of crude oil, now 950,000 barrels of crude oil per day. It probably will get back to what it was producing four years ago, nigeria is coming up very quickly. Theres a real problem out there in the crude oil market. You will get a rally and the market is rallying today, it is nothing but a dead cat bounce. I see we have nearby wti at near 45. We might get to 48, but thats diagnose to be hardpressed to push beyond that much at all. Its energy week in washington and the president is expected to make a speech at the department of energy storm with the focus expected to be on exports of crude ago well as crude products im wondering what you think the impact would be on this market first of all, isnt it amazing we are now talking about the United States<\/a> being an exporter of crude oil, being an exporter of in when i was in undergradual dennis, im sorry to interrupt were going to break in to show some video of the president welcoming the World Champion<\/a> chicago cubs lets listen to his remarks, also about health care well, i guess that was that was a nice little event. We missed the moment where he was asked a question about health care. Obviously his answer was quick and short. Back to dennis and let him finish his thought what do you want to do, folks . Lets go to the tease. Thank you, dennis. Were sorry we had to interrupt. What do ceos want from the president . Can President Trump<\/a> deliver . Hell be right back. There he is again. Created, e first stocks as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Dont put off checking out your Medicare Options<\/a> until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement<\/a> insurance plans insured by Unitedhealthcare Insurance Company<\/a> come in. Like all standardized Medicare Supplement<\/a> insurance plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long\u2122. Call now and request this free decision guide and explore the range of aarp Medicare Supplement<\/a> plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement<\/a> insurance plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long\u2122. Hi, everybody. Heres your cnbc news update President Trump<\/a> thinking the senate is getting close to passing the Health Care Bill<\/a> he made the comments during an Energy Roundtable<\/a> meeting at the white house this morning we have a plan that, if we get it approved this is very tough. Every state is different, every senator is different, but i have to tell you, the republican senators had a really impressive meeting yesterday at the white house. I think well get at least very close, and i think well get it over the line. A National Oceanic<\/a> and add moss spheric satellite capturing the moment of a gigantic solar eruption on june 19th. A noaa Spokesman Says<\/a> it shows the ability to track potentially dangerous space weather. The clippers have reportedly agreed to trade chris paul to the houston rockets, paul agreeing to opt into the final year of his contract to make the trade possible thele receive a 2018 firstround pick michelle, back to you. We are 90 minutes from the closing bell you almost 73 points, the on, jpmorgan Raymond James<\/a> among top. Crude prices have been trouble finding footing today. 1 a small billed in crude, and it like looks the market likes this expectations have been adjusted the draw is a better build also supportive, down 100,000 barrels a day, thats constructive, but the market knows its still not enough. Session high 44. 84 im being told that volatility is expected this week. Kpm going latest survey showing that being pushed back inned stall of tax reform. Live at the kpmg limp summit with the companys ceo lynn dowdy. Were on the putting green at the putting field were here for the womens leadership summit. There have been some stellar athletes and excelling tiffs here, and lynn dowdy, thank for you being with us. Thank you. Were here at the womens leadership conference. I want to get your thoughts on the state of women in business you have previously said its a great time for women in leadership roles, but given some of the turbulence we have seen particularly where i report from, San Francisco<\/a>, are you surprised about i what you have seen what are your thoughts on the state of big right now i think when you look at whats going on in your environment around us, where businesses are but disrupted, technology is changing the fundamental business models, innovation is probably well, we actually know its the top of the list for many executives so when youre faced with how do you be innovative . You need the most diverse teams, you need different perspectives, so i think its more important than ever having women in leadership positions being the most collaborative, looking for what does your ecosystem look lie. Women are in a great position to take advantage of whats going on in the marketplace. I so at the with executives i talk with, that Diversity Inclusion<\/a> is in the forefront and what will make business successful. Are you surprised by some of the stories that have come out of the Tech Community<\/a> as far as the challenges this. I think theres challenges in all trying, were looking at how do you get more women involved in stem . It has to start young. When you look at the pipeline there are certainly some trying that are challenged. Both of my kids are engineers, a son and a daughter when you look down on that stage and you see the women going into engineering programs, we have work to do it actually needs to start in high school to get more kids interested i think you were sharing with me earlier some of the maria barra was talking about getting more emphasis around girls who code i think all of us are foulke cussed on that. My colleague michelle you do a survey every year of ceos, just released it, a big surge in optimism last year. Why . I think a lot of that has to do with optimism in the u. S. Around the probusiness agenda, that theyre hoping for. We havent seen it yet, but i think that the ability to have maybe regulation thats going to be favorable to business and other proeconomic measures is spurring some of the that optimism i think were also see top of the agenda is around new emerging technologies, the importance of innovation, and so companies are looking at it from the sense of, although things may not be perfect yet, theyre seeing the opportunity for there to be advancements, and theyre putting a lot of emphasis on innovation as a result. Lynne, im curious, i see the same thing as you see on one item or another item or another item, whether its tax reform or what have you, but it seems the underlying feeling behind this optimism is that business is in the middle of a less regulatory regime, it has a friend in washington and near the admission or thats the case where any of them are delayed. Thats a long question, but i think you gelt the sense of it i do get it theyre looking at airs of technology, how that will change, theyre looking at ways how to innovate and have a culture that will allow innovation to take spark and change the way theyre thinking about the future of their business though place of business theyre not in belief that tax reform will happen in this year theyre sticking to the key as deal you saw amazon and whole foods, the blue apron ipo, though at a lower than than initially expected is that going to when we looked at and asked the ceos and survey about m a and what that outlook looked at, it was not in the top list of the five priorities for them im not sure about what the deal volume will be look in the future obviously its been stagnant as we looked over the past 18 months or so you might see some big deals, but those big deals are being spurred by what . This Disruptive Technology<\/a> and how are you digitizing your business in new ways i think well see more deals on par with that agenda of, you know, whats a digitized business look like in the future . Thank you soech deer ra, are you going to ask her the question you emailed me i asked her before do it whats a hokie . Lynne is a hokie. Lynne is a hokie, so is Brian Sullivan<\/a> us hokies stick together. Youll have to explain it to us, brian. Lynne, thank you. A big banks about to get their report cards from the fed. Those stocks rallies today ahead of the results well tell you who will come out on top plus the dollar is at a sevenmonth low. Power lunch will be right ba ck online u. S. Equity trades. You realize the smartest investing idea, isnt just what you invest in, but who you invest with. At crowne plaza we know Business Travel<\/a> isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. This afternoon, the second report will be released. Buybacks, increases in dividends. Lets bring in jason goldberg. Good to have you here. Good afternoon. So people wait for these stress tests, because this is the moment where finally the fed has said, okay, you have enough capital, so now you are allowed to do other things with it, presumably return it to shareholders you cover a big pile of banks, what percentage of these banks are going to raise their dividends . We think almost all of them maybe one or two back in focus, but essentially every bank we cover will likery release their dividend and every single bank we cover will come up with a share buyback, buying back 5 6 of its stock over the last year there have been tremendous runs in a lot of these bankses Morgan Stanley<\/a> up 80 . I mean, huge, huge moves how much is already priced in . The stocks has certainly outperformed last year, but year to date is barely budged if you look at the relative pes versus where they were prior to the election, they havent moved, either, so you have seen upward visions in part due a better Interest Rate<\/a> environment, and in part just due to hopeful you get some of the this regulatory rollback, cap return will be quite substantial. We continue to be constructive looking out. But the group is moving today, jason you know, absolutely, but you know still as of late, youve till seen some improvement in the yield curve this week, which has certainly helped our coverage is 120 billion or so of capital can be returned to shareholders next four quarters, thats up 25 from the last four, and, you know, the group will still have a lot of excess capital that either guess deployed back. Are think any banks in your coverage universe that are at risk, perhaps a wells fargo . This is the qualitative part of the stress test. Certainly theres some concerns around that name, we kind of think about a stress test qualg at a timive per spect continue on capital return it doesnt have that much to do with sales practice issues, you know from a capital standpoint, while certainly not good from a a, it hasnt had that much impact on their capital. B, they were taken a lot of measures it came to light. Could this be a sell the news event, jason you know, if we look at the last several years, the last six, i think the group underperformed at the last four, last year they outperformed, but that was after brexit, so heart to tell. Its something well warrick over the next couple days, perhaps over the next 12 months, we think the group has the capacity to outperform. Jason, good to have you, as we watch for those stress test results. The dollar index falling to a sevenmonth low, what is the message the currency market is sending stocks chas, how much are you looking at the dollar and what is the dollar telling you about the state of stocks right now . What the dollar is telling me is that Global Growth<\/a> overall has been very good, in excess of expectations a bit of a slowdown and softening here, but nonetheless on the e. M. Side as well as on the developed side, it has been positive that will have positive implications not only on s p earnings, but also on revenues, so boris, youre the on currency guy. Whats behind it lower positive, because they source everything this dollars and sell everything in euros but Something Else<\/a> is going on in the currency market that perked up my ears. We have sees a maggive nick in volatility i wonder if thats a precursor to an increase in volatility to the equity market. That is not really good news i think there could be a message there that nobody is anticipating now one thing i would just say is that the Central Bank Community<\/a> indication from the ecb had a substantial reasoning behind all of that volatility, and you can anticipate that in the coming months. Chad and boris, thank you very much. For more trading nation, we do two a days, go to cnbc. Com. Blue apron expected to go public tomorrow. The company now faces a lot of competition now in the Meal Delivery<\/a> market, ahead of one of those competitors will join us next announcer and now the lading from tradingnation. Cnbc. Co [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management<\/a> firms in the country. Discover how we can help find your unlock. Blue apron expected to go public tomorrow. The Service Space<\/a> is competitive. Aditi roy looks at the winners an the loser thats a nice play on words there, and well continue with the puns the market is definitely poised for a food fight blue apron is tapping into a trouted market that could reached 66 billion by 2021 just check out the competition plated, hellofresh is valued at 2 billion euros but had a down round and call off the ipo, then theres freshly, and achieved, and unilever backed sunbasket, but also some notable companies have gone belly you have spring once valued shut down, so did maple that was backed by david chang and launched to much fanfare, but if burned through cash quickly. And then theres munchery, once valued to 275 million its gone through layoffs and recently but the companys ceo tells me that munchery was profitable in all of its markets in may, a first for them, he says what are the ingredients for success . Industry watchers tell me many use conventional mail rather than kurtiers for delivery, driving down the operating costs, but some experts athe biggest threat mike the combination of whole foods and amazon thank you very much. As aditi mentioned freshly is one of those competing, just announcing 77 million funding led by nestle. Michael wisetrack, the ceo and cofounder of freshry thanks for having me on. We were chatting before this is different from the Meal Delivery<\/a> services that we were talking about in the context of blue apron these are cooked meals you are delivering yes, almost everyone you had on that list was in the meal kit kit space which is raw ingredients that youre cooking yourself ours are all precooked for you, big, healthy angle all of our stuff is all natural, 85 band ingredients, no artificial flavors or sweeteners how much did the cost break down to . 8. 99 per meal were actually in line and slightly cheaper than the meal kit guys just takes you three minutes, heating up the meal, and youre ready to go. Why dont i just order on seamless i want to cook a meal and i dont want to cook it, i probably dont want to heat it up either. Well, theres a few things. So one if you order on seamless, youre waiting 45 minutes. If you go to your fridge and ready in three minutes, thats more convenient. The bigger thing is cost 8. 99 for a meal, where if you order seamless, savage 15 if 20 per person i think the final thing is health, right . So, you know, you know when you order off seamless, youre not getting that healthy meal you want were taking care of that Health Component<\/a> for you. Your subscription, right, as opposed to i use them and i pay for a meal, i can order it and run for six. Yeah, were a subscription. So i pay per meal so with that youre paying for a meal were a box. So anywhere from 4 to 12 meals per box, its shipped directly to your door, just like an amazon box you get at your door, and you load up, your foods good for seven days, its fresh, never frozen you heat it up and ready to go how worried are you that amazon and whole foods, whole foods has a lot of prepared foods, theyre just going to box them up and reach out and punch something. So im not worried at all first of all, were huge fans of whole foods and what it has done for the industry as far as moving healthy food forward. So, the reality is, amazon and whole foods combine make up 2 of the food market, right . So you look at that, its a 1. 2 trillion market. I think were excited that consumers are going online and theyre now getting better, healthier options to get food offline. Thats an interesting move what have you learned about consumers . We just did a segment earlier today on Health Care Costs<\/a>, a large part of that is our obesity crisis, in america so you serve food to people. What have you learned about the american consumption and attitude around food well, i think so one, the american consumption has changed. More importantly, the food the people making food, their responsibility is changing and i think this is something whole foods started 37 years ago which i love the responsibility of saying hey, look, were going to be the first people, were going to deliver the right food to you. 30 of americans are going to be obese by 2030, 66 of americans are overweight the Biggest Health<\/a> epidemic is going to be waste. So, its certainly got to be on us as the consumer, but its also going to be on Food Companies<\/a>. And i think thats freshly, thats whole foods, thats a lot of Companies Generally<\/a> were excited that the food market is moving healthier. Consumers are getting more and more Healthy Options<\/a> when you look at what is happening with whole foods, walmart, amazon, theyre all moving in the organic pot. Theyre getting more Healthy Options<\/a>. Are you surprised at what appears to be a lackluster desire for blue apron . Well, i think so the interesting thing will be, with blue ipo, their product. I saw the ipo product down today. I dont know if im the right person to comment. I can say that i believe strongly that in a longterm play, blue aprons going to be an amazing purchase. How are your revenues doing thats question one, number two, what is your burn rate 77 million with nestle. Must be burning through cash those are great investor questions, we dont give out either our unity economics are some of the strongest if not the strongest in the industry. Delivering a better product than the consumer and making sure that the consumers love it i use one of the meal kit services, i was saying earlier, my main beef, not a use a bad choice of words is that the amount of time they say it takes to prepare, thats not really reflect the amount of time it takes me or my life. If the food thing doesnt work out, go on the bachelor or bachelorette great smile. Im single. Win i appreciate that i think but can you cook . No, i cant i am our ideal customer. You cannot cook i cannot cook he heats them up. Are you heres the sort of semi producers want to meet you by the way. Theyre female. Happy to meet them. Are you its hard to follow that. I think im stumped for the first time speechless ever. Are you going to go logistics or food food at scale is logistics, and i think wed like to say were a Health Company<\/a> first and foremost whing you look at what is going to deliver a meaningful impact on the health of america over the next 10, 20 years, its going to be on people like us, Food Companies<\/a> that will deliver a better thing. When you date michael, he brings dinner. I show up with dinner absolutely correct hey melissa, were the test love eat, shell love that melissa, we are the tesla of eating all right, michael, thank you. Michael. Check please is next and your emails and tweets about whether to consumer drugs as should be banned. Michael, thank u. Oduc it. Go lk. Yo im here at the Td Ameritrade<\/a> trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform<\/a> aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade<\/a>. At johnsons we care about safety as much as you do. Thats why we meet or exceed 15 global regulations for baby products. And where standards differ, we always go with the toughest. Johnsons. The first hour we asked you if it was time to ban direct to consumer direct advertising. Heres what you had to say as a pharmacist, i see patients leave their doctor until they find one who will prescribe tv ad sad. Everyone says sad now. Bill weighed in, no, transfer information, always figure your position, knowledge is power mark writes, Drug Companies<\/a> should most certainly not advertise the general public, public has no idea whats in their best interest. James says, how much are the Drug Companies<\/a> spending . They could not advertise how much lower could their drugs be . I think its like 6 billion is the much more than that anyway finally a tweet from ron, yes, it should be banned for a variety of reasons it does more harm than good. Can you also get rid of the mattress salesman . Random twitter this is twitter. Knowledge is power. I think thats the important part absolutely. Do what you want with the information, but have the information. This idea that people should have less information, its bizarre. Bizarre you brought this up wont be good for our industry. The advertising went away wed lose every commercial break during the Football Game<\/a> is like beer, burgers the two and magazines they have to buy two pages, not just one. Right sometimes three all right ill see you tonight, jeremy pipen on set thanks for watching power. Closing bell starts right now. All right. Am i ready for this . We have a lot going on we have a lot as we like to say on this show, we have a lot of show today. Welcome to the closing bell were going to get to this exciting information. Im sitting next to a mound of produce well get to that later oh, i thought you meant me. Im bill griffith, the mound of produce. Fedex by the way if you havent heard revealed this afternoon a key issue that could show up on the next Earnings Report<\/a> were going to tell you what this is. The stock was holding for a while. 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