♪ good afternoon, everybody. welcome to "power lunch" alongside kelly evans, i'm tyler mat mathisen. glad you could join us. fed chair jay powell says the economy remains strong, despite recent schooling and holding rates too high for too long could jeopardize economic

growth. hint-hint. >> speaking of economic growth, the values of sports teams have been skyrockets for decades. recessions or not. is there any sign we might have finally reached the peak? before that, let's get a quick check on the markets. as you see there, apple and microsoft continuing to battle out for the market cap leadership, getting close to 3.5 trillion as we watch that battle it out. plus, tesla higher for the tenth-straight session, up 40% during that streak. if you're holding it, i hope you're long. i hope you're not short because you're getting crushed if you are. you'll get advice from our trader in three stock lunch. fed and the markets, fed chair jerome powell testifying before the senate banking committee, while he acknowledged the risk of holding rates higher for too long, we also need to see more good inflation data before cutting them. take a listen. >> it doesn't seem likely that the next policy move would be a rate increase. we don't take things like that off the table, but that does not seem the likely direction. the likely direction does seem to be in -- as we make more

progress in inflation and the labor market remains strong, we begin to loosen policy at the right moment. >> let's get some reaction from dryden pence, he is here, cio of pence strategist. welcome to both of you. drieden, quick knee-jerk market reaction. markets took this slightly hawkish given he said maybe we need so see more consistent progress. >> well, i think at this particular point it's always continues to be that wait and see. it's a question, is it one cut or two, september, is it december? but in general, they're still trying to be very data dependent. trying not to give the idea that they will be political about it or anything other than completely objective. that's the market is taking that in stride. and continue to -- we have a robust economy. and i think that that's one of the key things that -- we're just slowing down from 90 to 50. >> let's ask the economist to your left. is it robust? we were debating last hour whether things have now slowed

not -- you have to debate the recession question of cutting the rates from 5.5% to something maybe more neutral or appropriate? >> exactly. no, the economy is cooling off, but it's cooling off from a very hot setting for, you know a couple years now. and i thought it was interesting in the hearing the politicians wanted to emphasize how much it's cooled off and not talk about the level and powell kept coming back to the fact that, yeah, we're slowing down but the economy is still solid. >> why do you think he did so? because it's funny because you think, okay, well, it would be the opposite. i would expect the fed chair to talk about things are cooling. everyone else is saying, no, inflation is still high. sounds like that wasn't quite the tone of it. >> as you imagine, most the politicians are probably hoping for a little rate cut before the election. and i think powell didn't want to have to commit to anything. so, if inflation data coop rate, there will be easing soon enough. but we're not there yet. >> drieden, we'll start seeing some earnings later this week from some of the big banks.

what are you expecting for earning season as we get into it and then earnings for the rest of the year if, in fact, the economy is slowing a little bit? >> we're going from a torrid pace to sustainable pace. i think what we're going to see and know here within the next 30 days is that a broadening out -- earnings recession is now turning into from a rolling recession into a rolling recovery. you're going to see the broadening out of many companies are beginning to see pick-up in earnings. we had this narrow growth. we'll see that broaden out. we'll see more companies. i think the vast majority of companies will beat and they're going to beat expectations and they're going to be beat handily because you're beginning to see this final phase of the rest of the s&p 500 finally catch up to some of the earnings growth that the magnificent seven had. >> are you at all concerned about the valuation? i note in some of my research materials that when you look at the equal weighted s&p 500 -- i'll ask you first and then maybe you can chime in, the equal weighted s&p, you take out

the magnificent seven, the earnings multiple are pretty normal. >> exactly. when you say at a higher -- the market has gone up too far, it's only with a few companies. so when you look at the rest of it, about 18.4 if you pull out the mag seven. into a normal valuation, a normal pe area, earnings are growing, that will be supportive of those stocks. one of two things happen here. either the foundation of the market gets better and stronger and broader. or, it propels the market forward into the rest of the year. and so, i think that we're kind of on the side of we think the market is going to be reasonably robust continuing for the rest of the year. it's just leadership is going to change. you're going to see that rotation in leadership to a broader group. >> stephen, i just read an interesting stat from bespoke the manufacturing services are under 50, as we know, usually that only coincides with recession. the weird thing they said about that is usually by the time this happens the market has already

sold off but this time we're at record highs. it's very odd. >> again, this gets back to the change versus level picture because the ism measures change, right? so the economy can be cooling and not necessarily be weak. i think the manufacturing sector has been contracting a little bit, but the services sector, i think, it maybe is normalizing. but i don't think what we're seeing this that part of the economy is weakness at all. >> so it doesn't worry you. why don't you comment on dryden's comments on earnings. how do you expect them to come in? >> if the economy slows, it can still be a good period for companies. companies had better pricing power maybe to chairman powell's chagrin. as long as that continues, it obviously weighs in positive direction for profitability. a recession is one thing, a slower economy is something very different. >> but that's where i find the helen of troy example very interesting today. not to go too granular. this consumer products company

that raised prices, gone too far, now has to pull back. this is what piper sandler been warning could happen. we could see corporate revenues stalling out, margin pressures, earnings declines. you know, so from that point of view, this doesn't look quite so much of a healthy development as maybe the start of a worrisome one? >> well, it certainly -- you know, you're talking about a weaker economy, right? so there are also dangers in that. it also means an economy that is more vulnerable to a shock, right? recessions don't just happen out of thin air, usually caused by some kind of external shock. growing at 4%, we with stand those types of shocks as we have over the last few years. you get a slower economy, you're more vulnerable. doesn't necessarily mean recession, but it could happen. >> and similarly, dryden thoughts what we're seeing in helen or spg companies having to rethink price now. >> i think the idea that people going out and buying any product at any price is over. for a while they did that.

and so now you have a consumer more conscientious, more thoughtful, picking what they're going to spend their money on and seeing some changes in consumer behavior, right? you have seen companies in fast food industry not do as well or not sustain their price increase because you expect fast food to be fast and cheap. when it's neither, you'll move to something else. and so, consumers are beginning to change their pattern as they think more about this inflationary environment and becoming pickier. doesn't mean they're not spending money. more people are making more money than ever before. and americans spend it. so the aggregate demand stays very high but it will move from sector to sector. people are moving towards experiences. people are moving towards other particular things they're trying to spend their money on. and being more thoughtful about it. >> dryden, takes a cool cat to wear a full three piece suit on 97 degree day and double breast suit. looking good. >> thank you. >> appreciate it. coming up, some housing

industry watchers expected home prices will ease in the second half of the year, but so far, that's far from the case, even as supply of homes increases. we will discuss what's going on in real estate. plus, what if the earning stocks one of the most successful nba franchises is reportedly losing serious value on the open market. we'll look into that and more when "power lunch" returns. we'll be right back. ♪

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lunch," everybody. we heard from chair powell on interest rates today. no clear sign of when a rate could be coming. lots of hints in the air, though. that may be bad news for home buyers hoping for a drop in mortgage rates soon and perhaps home prices as well. but so far that has not been the case, even as the supply of homes on the market finally, finally increases. diana oe lek joins us to explain what's going on and why. >> hey, ty. we're in a housing market unlike any other due to economic forces unlike any other. the foreclosure crisis, the great recession, the pandemic and unprecedented quick cut and then quick spike in mortgage interest rates. take a look at supply of both newly built and existing homes for sale. it shot up during the 2005 housing boom and the ensuing foreclosure crisis, which flooded the market. so home building essentially ground to a halt. by 2012, new homes were just 6% of all supply. then, total supply dropped even more in the pandemic when demand

spiked. now it's climbing back. but in a weird twist, it's mostly new homes climbing back. the month supply of newly-built homes for sale is now almost three times that of existing homes. months supply is how long it would take to sell that supply at the current sales pace. now, new and old home months supply usually track pretty closely. but new construction now makes up 30% of total inventory. this is due to a roller coaster mortgage rate scenario, dropping to historic lows at the start of the pandemic and then spiking to 20-year highs just two years later. that makes homeowners who wanted to move up instead stay put, cutting existing supply further and it makes buyers look for cheaper homes. so you can see that in the months supply of homes for sale in may by price tier. it is the lowest in the 100 to $500,000 range because that's where most demand now lives. and that is despite the fact that supply has increased the most in those lower tiers. the homes are just getting eaten

up that fast and that is why prices are still going up. back to you guys. >> yeah. people are looking for a price point here, i think. and they're getting squeezed out at the high end. so i'm -- i guess that's why people are building to where you go where the money is. you go where the people are. >> you do. and that's why some of the big builders who are looking at the lower entry level models are doing well. your dr hortons, you know, they have an express brand, your kb homes that have that built to order brand. but again, there's going to continue to be pressure until we see mortgage rates pull back, but then the argument is, if we do see those rates pull back, then you have a flood of demand comes in and that just pushes prices even higher. >> di, appreciate it so much. >> to another key component of the cpi, car prices. a short time ago we got the new data on the used car market. phil lebeau with the details. phil? >> and they continue to fall, kelly. if you take a look at the june

data comes to us from cox automotive,over all prices compared to june of last year, down 10%. but look at the decline compared to may. it's definitely slowing down. down just 2.2%. it was lower for every single vehicle segment. trucks, compact, you name it, the prices have been coming down. however, this is getting close to the point where most believe we'll see a normalized market. in fact, cox automotive beliefs used auto prices will be stabilizing over the next six months. demand nor used vehicles that continues to increase and that will give support to the prices there. one area where you may not see support in prices, the used ev market. and keep in mind, what we're seeing in the used ev markets are a lot of vehicles that initially were being sold for well over $50,000, that ain't happening on the used market. so far, when you compare june with last year, down 16.6%. in may, they were 6.5% higher in

terms of pricing. this is expected to continue especially as you see more lower priced evs come into the market. so as you take a look at the auto dealership stocks, they should be getting a little bit more demand over the next couple of months and the supply is going to be limited because we're in that part of the three-year cycle where there's going to be fewer three-year lease vehicles coming back to be turned back into the dealerships. and that's going to support pricing as well. guys? >> why have prices come off the way they have? not just for -- not just for evs. we know a little bit about that. >> sure. >> but why are they falling? >> right. well, first of all, the demand clearly outstripped the supply when you go back during the pandemic and then right after the pandemic. and that demand has fallen off significantly. and as that demand has fallen off, increasingly a lot of people who were in the market to potentially sell their vehicles -- i mean, i'm sure you've gotten these notes, tyler, email from your dealer, have you taken a look at what

the value is of your vehicle? you want to send it to us, you want to sell it to us? you know, those things are prompting people to say, okay, i'll do that. so you had a lot of supply come back into the market. that also brought down prices. and we're getting to a point where it's just much more normalized compared to what we saw during the pandemic and right after the pandemic. >> i sadly have one of those evs that i bought at a premium price. then the company, which shall remain nameless, cut the price on the new cars and that, of course, sent -- >> gee, i wonder who that was. i wonder who that was. >> i wouldn't want to mention on a 10 or 12-day stock winning streak. who cares. but anyhow, the value of the residual value of this particular vehicle is much lower than i would have anticipated. >> the honda mini van, ty, if you had gone that route. >> i saw you rocking the big mini van. >> they want it back. they call me all the time trying to off load that thing. >> yes, they do. >> they want it back. >> mini vans are in demand. that will continue for a while.

there's just not much production of them out there. and so, if you have one and you get one of those emails, people are thinking long and hard, is it too imto get out of the mini van. >> if you can. >> not in me casa. phil, thank you, sir. quick power check as we head to break on the positive side -- there you are. >> just add insult to injury. >> tesla continuing to rally there, ladies and gentlemen. trying, yes, the shares are trying. tenth straight day in a row. we will get the trade on that one ahead of three stock lunch. negative side, you have our albermarle, shares of the lithium producer lower after oppenheimer cut its price target. did they make a movie on oppenheimer? 'lbeig bk..t coming up wel rhtac

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energy, one of the worst performing groups today. that's why we invite pippa stevens here. tell us about it. >> yes. we have four big movers. i'll run through quickly. let's start with bp, they announced q2 considerations today. they're taking impairment charge of up to $2 billion thanks to on going review at one of their german refineries are decreasing output, they also said they had weaker refining margins to the tune of 700 million and pointed to trading weakness and this of course, all comes as they try to reinvigorate investors in the stock since he took over on a permanent basis back in january. weaker refining playing through to exxon which gave their q2 updates. upstream operations should be helped by higher oil prices, however, that will be offset by lower nat gas prices. when they report later this month, that is the first update since they completed the pioneer acquisition. that will be important as well as the on going soap opera of

the chevron/exxon. devin, moving through to the next one. so they will left out of the m & a party no more. buying the assets from privately held grayson mill energy. so that will increase their footprint up there. and various said they will leapfrog from the eighth largest producer to the fourth. so a pretty big sizable footprint and then also relocating some of their operations outside of the premium led bank of america to upgrade the stock. >> they're not down much. only down fractionally. that's interesting. >> especially since it's not a play on their longer term inventory, current production, about 70 to 80% is based on operations already on going versus the long-term inventory. albemarle down 8%. lowered target from 170 to 127. similar from oppenheimer. we have a longer-term chart. it is now down more than 70% from its 2022 high.

>> crushed the year. everyone knows this is the lithium play, one of the real company plays on that commodity on the market. it's been a tough year. >> lithium prices have fallen more than 80%. i think they ran up way too quickly i think everyone would now agree and the decent has been just as extreme no favors for any producers. you can't predict your long-term pricing and any of your contracts if you have these wild swings. relatively new commodity market so still sorting out some of the peaks and drops. >> wow. >> pippa, thank you very much. and let's get to kate rooney for a cnbc news update. kate? >> hey there, kelly. nato will send a representative to kyiv as ukraine continues to push for membership into the alliance amid its war with russia. secretary of state antony blinken announced the development this afternoon along with several other measures meant to strengthen nato support for ukraine. that includes a new military command in germany led by a three-star general that will train and equip ukrainian troops. hurricane beryl knocked out power for more than 2 million

people in texas as sweltering temperatures blanket the states storm hit southeast. the power company for the houston area says it's assessing damage from the storm and will soon publish estimates for restoring the system, but state officials warn could take days to fully return power. and russian court issued an arrest warrant today for alexei navalny's exiled widow. the court accused julia navalny of participating in extremist group. she has taken the manual as russian opposition leading following the death of her husband in a penal colony in february. kelly, back to you. >> kate, thank you very much. kate rooney. still ahead, dropping like a steph curry jump shot. the new york post reporting the golden state warriors are struggling to sell a stake in the team. they claim the value is slipping despite being one of the nba's best performing teams of the past decade. could an exodus of tech firms and workers be to blame? we'll dive into all of that when "power lunch" returns. (♪♪)

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♪ welcome back to "power lunch," everybody. sports team values continuing to soar so much so that many are wondering if it has to stop eventually, including our friend and houston rockets owner tillman.

here is what he told us last year. >> i can tell you this from being involved in the denver process and in the washington process, there's not a lot of buyers out there. when you start talking about these numbers. we're in numbers now that middle class billionaires like myself can't afford them anymore. >> i would like to be described as a middle class billionaire. that would suit me just fine. we're going to find out because boston celtics are going up for sale coming off an nba championship. talk about selling at the top tick. here is what celtics majority owner wick grossbeck said about investing in sports teams yesterday on "closing bell". >> we put in 200 million of equity 22 years ago for this. it really was literally 200 equity. we won't repeat that in the future. but i'm bullish about the nba going forward. i think it's a sound investment. you should own this team if you love trying to be the best.

you should own it for reasons of community and competing on the court, but you know what, the finances can also work out. >> i should say so if you bought it 200 million and going to sell for 5 billion. the golden state warriors owner is trying to sell a piece of that team. perfect time to welcome our newest team member. >> great to be here. thank you. >> delighted to have you with us. so, am i wrong, or does it seem like quite a few nba owners have been selling in recent months? you've got the bucks. lazry got out. mark cuban selling a big hupg or all of his stake. i can't remember in the mavericks. now we have the bay area team selling out. and we've also got -- well, you know who we also got, deirdre bosa in the bay area. she joins us, too, to chip in here. but now the celtics, so the celtics the warriors, the mavs,

the other team in the finals. and the bucks all selling. what's going on? >> all for different reasons. i know that doesn't help at all, but, marly taking some money off the table. mark cuban sold controlling stake in his team, but he still got to run the team. >> he still got 27% of it. got exposure. >> right. exactly. the huge next media deal coming along, going to probably see the average amount being paid to the teams go from 90 million to over 225 million per team. so you have some owners taking cash off the table. grousbeck, family estate planning involved. look, he's done okay. 23, 24% annualized return on his investment. not too bad. >> deirdre, let's talk about the warriors. last year they didn't make the playoffs. they had a very poor record, maybe one, two years before that. and now klay thompson is gone

and they are in a reload -- >> curry is getting older. >> curry is getting older. and would probably rather play golf than basketball. who knows. but at any rate, the thing that makes the warriors so valuable in part is that you also get that chase center arena. >> yeah. that's right. they moved over from oakland for that chase center. it's supposed to be sort of this mixed urban complex. you saw uber move in there before the pandemic take up a ton of office space. they've sublet -- sublease their space to open ai. there is activity there. i guess a the heart of the question is, you know, san francisco, a fair weather sports fan city. and that's something i've asked myself since moving here about eight years ago, guys. i come from toronto, which is through and through a hockey town. okay. i know in the states it's a little different. there's not as much hockey. this is certainly been a basketball town since i got here, since we have seen the warriors do so well. but it does feel like something is shifting. and as san francisco sort of one

of the last major cities to really go back to work, we still have many companies here with hybrid work policies and seen companies sort of move out or stay with hybrid work. there's less fans to go to some of these games. it's not all that surprising. if the warrior's valuation goes down, which maybe mike can speak more to. mike, are you seeing that go down? do you think that might be one of the reasons for it? >> no. i think the valuation is going up. there's a small piece that there's been an agreement to sell that piece in the team probably for a month and a half. that minorityvaluation is about 6.5 billion. if you gross up to a control stake, you're talking at least 7.5 billion. the thing is not with standing everything deirdre said, all spot on, a lot of the revenue streams are guaranteed. there are contracts there for several years. season ticket holders from sponsors. so they're really locked in for several years. >> you're saying there's no valuation decline for the warriors or for the nba more broadly. >> i don't see it in the next

couple years, not with this massive new tv deal coming along. and i think as private equity investors and institutional money continually see the nba and other sports as an asset class, diversify the winnings they had, i think money will come in. >> are the poor middle class billionaires being priced out here? >> the three of us, yes. i think maybe season tickets, stub hub, maybe we can buy something. >> maybe bring dee into the equation it will change everything and get it moving here. >> i would also like to be a middle class billionaire, but you know -- >> would you? >> i would. i would not mind that title. but let me tell you something because what's been really interesting here in the bay area, i'm sure you've seen the men's sports teams increase in value, lots of season tickets selling out. but a new movement specifically here in the bay area is really the rise of women sports. other the last two years, we have seen a new soccer team, bay fc, women's soccer team, and in 2025, we're going to be getting

the first wnba expansion team in more than a decade. the valcaries. they see san francisco -- we had an event here at our one market studio just a few weeks ago. they were so enthusiastic. the cfo of san francisco fc, seeing images from it now. they were so optimistic and so excited to be here. and i asked them even, is it hard to get talent to play here because housing prices, because of the city's reputation, the so-called doom loop? they said not at all. women want to come and play here. we're figuring out the housing piece of it. but let me give you a clip, too, of brady stewart the bay fc ceo. her enthusiasm comes across here. >> i've been blown away by the bay area sports community embracing our team and our organization. we do have many -- multiple teams that everyone looks up to, right? the giants, the warriors, the

niners. there are incredible organizations and have opened their arms to us. and it's been very humbling, frankly. i think community of sports and athletes has been very powerful in the bay area. >> mike mentioned private equity. that is a big piece of the growing popularity in valuations for women's sports teams. >> so on that note, and i think as people look to diversify ownership, they're looking to retail, mike, as one potential way of getting the public in on this, not exactly through an etf, but a structure like this where there could be broad ownership. that's why the valuation question becomes so interesting. you don't want the moment the valuations have peaked to be the moment you bring in the retail public. you still think there's considerable upside here. >> right. this is all new. private equity only started coming in the last five or six years really. so when those funds liquidate, they want to show positive returns. and i think what deirdre is talking about, it's almost like women sports the nasdaq tech growth stocks of sports. you know, 50 million can get you a wnba franchise. that's phenomenal. it couldn't get you a fraction

of the golden state warriors. >> it's interesting. we're not going to see a repeat of that $200 million investment going up to 6 billion in 20 years. we're not going to see that again. he was pretty clear on that. >> i'm only going to say this, wick is a great guy. i know him. he's very smart. but when i first started valuing sports teams in 1989, and i was looking at the list, i asked the sports banker, i said, wow, george steinbrenner paid 8.8 million for the yankees and now you're saying they're worth 225. the guy said to me, yeah, but that's because tv rights have gone up a lot. we're not going to see that over the next ten years. >> and yet here we are. >> yeah. i think as -- look, there's disruption, right? we're going from linnier broadcast to streaming. everybody in media is figuring it out, how to monetize it and professional sports is going through the same thing, i think. but as this new nba deal shows,

particularly like a bloebl sport with the nba, these players are brands, it's going to be monetized. >> one of the things that's interesting to me is how the nba -- the valuations on nba teams have closed the gap in valuation vis-a-vis the nfl. i mean, they're out there asking 5 billion. it wasn't too long ago that 5 billion was the top valuation of an nfl team. >> that's a great point because it's funny you're saying that. we're talking about private equity. well the nfl has not yet allowed private equity to come in. when the commanders were sold, josh harris' group was sort of trying to use that, the nfl put its feet down. but i think when you see private equity come into the nfl, which is going to be in the not too distant future, instead of nfl teams going for maybe six times revenue, versus nine or ten for the top nba teams, you'll see revenue multiples go up for the nfl as well. >> so -- what did the commanders sell for? >> little over 6 billion. >> little over 6 billion. so you're saying that number in a few years is going to look

antique? >> yes, absolutely. >> and only the high class billionaires or the retail public or everyone coming together are going to be able to afford i think to get in at that point. deirdre, quick last word? >> mike, i'm curious, i've been wondering about the 49ers because they're based down the peninsula from here in santa clara and of course, that is where nvidia is headquartered. i wonder if there's any correlation between -- i'm sure they're minting a few mid class billionaires. is that the term we're going with given nvidia's stock soaring price. do you think that will have an effect on ticket price, merchandise, the 49ers position there? >> look, the demographics of what's happening out there has been a boon to the golden state warriors, boom to the 49ers, not so for the oakland a's who seem to be headed to las vegas. so shows you the popularity in particular of the nfl and the nba versus popularity of the baseball team out there. >> right. >> mike, dee, thank you very much. we appreciate it. >> thank you.

>> great to be here. mark your calendars for cnbc's second annual game plan summit on september 10th in l.a. the event brings together industry leaders, visionaries from the sports and entertainment world and to learn more and register, you can scan the qr code on the screen or go to cnbc events.com/game plan. coming up, the ftc releasing an interim report on its two-year probe into big pharmacy benefit middlemen with some scathing conclusions. we'll dig into the details and ramifications when "power lunch" returns. ♪ okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories

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♪ welcome back to "power lunch." an update now on a story we've been following. the role of pvms. pharmacy managers the link between the big pharma companies and your local drugstore. the ftc slamming the companies blaming them for high drug prices. bertha coombs joins us. >> it's been a two-year probe. the ftc argues pbms claim to save patients and insurers money are driving up costs. they highlight specialty drugs, high cost or complex drugs to

treat special conditions. the report outlines how the big three pbms, cvs care mark, cigna group and united health boosted sales growth by designated more and more drugs as specialty pharmaceuticals and make patients buy them at their preferred pharmacies. now, one example of how this works, the price of the generic version the cancer drug which treats leukemia. the report notes in 2022 pbm preferred pharmacies reimbursed $2700 a month for the drug. that's 40 times the net cost of $66. and it cites a quote from a pbm executive admitting to a consultant that it doesn't look bad -- doesn't look good, the optics are bad they designed their plan to, quote, aggressively steer customers to home delivery where the generic cost is 200 times higher or over

$19,000. while not telling patients that non-preferred outlets like costco, charges $97. now, cvs says it stands by its record of protecting patients from rising drug prices. pbm serves as a counterweight to drug makers monopoly power to set prices cigna express scripts told cnbc the report's conclusion were biased. interesting officials are noting that ftc commissioners dissent basically comes to the same conclusion that the conclusion of the report was biased. >> so, who is paying that $19,000 price at a non- -- by a mail order for one the drug that you cite there? >> right. >> and is it my insurance company? is it me the customer, who? >> that ostensibly one of the holes that the commissioner who dissented on this report talks about. they don't really tie together

all of those knots in this report. these are things that people have talked about. one of the criticisms that she says that even if the report's assertions of increasing concentrations among these pbms are accurate, increased concentration does not prove that competition in the market has declined because they all compete against one another. ostensibly that is the rate that they're going with the insurer. you, as the -- >> they're bringing to the insurer. >> right. what happens with these rates, there's a net price, little less and then you as a patient pay your co-insurance based on those higher prices as opposed to the net price that everybody else is dealing with. so, that's where it's such a very complex process. it's hard to discern exactly -- >> it is opaque by design. >> that is the big question. >> that is my feeling. it is opaque by design. >> that is what a lot of the bipartisan legislation is trying to get at to make it less opaque, to make sure everybody

knows what's happening, one smaller pbm executive told me we put out a trend report on what's happening with our prices and what we're seeing. none of the big pbms do that anymore. >> i think also the question remains what are the policy steps that they think really solve this? or do they try to leave it to the market to in some way come up with a better system? >> that's one of the things that people talk about in the sense employers are the biggest part of the market. they are the large employers are half of the market. and they set the tone and negotiate with these middlemen. but, there's just so many layers that people don't necessarily understand. and one of the things that a lot of this legislation is trying to get at is to just create more transparency and to set some limits. you know, it used to be that the pharmacy couldn't tell you that you could pay a lot less if you paid a cash price rather than insurer price. through legislation that was changed. and so now you can ask them, how am i going to pay the lower price sometimes the cash price

is actually the lowest price. >> so bizarre. >> thank you very much, bertha. helen of troy plunging on a rare earnings miss and cut to its full-year outlook on pace now for its worst day ever. helen having a bad day. helen having a bad day. reportedly beauty and wellness business. we'll trade it and other movers, we'll have all kinds of illusions to mythology and greek literature. >> announcer: crypto watch is sponsored by grayscale. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number... and more about discovering magic. rich is being able to keep your loved ones close.

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time for today's "three stock lunch." is eva ottos, and first up, we have tesla on track for the tenth consecutive up day, 35% game over that time. our investors ask, what do you do when you have a big winner?

it's up in a lot in the past month, but you may not be a winner if you've held it for a year or two. >> definitely. we have it as a hold. initially the company was down early in this year. now they went of 40% in the last it's almost perfectly negatively correlated with the stock appreciation, which means that the shorts have been covering, and that's partly a short squeeze, too. so this is a company that's been controversial for many reasons. one would you say elon's compensation package, $50 billion that's been settled. now there's a lot of discussion about the relevant valuation of the company. that's an $800 billion company, which is more than most of the competitors combined. their forward price target ratio is 91 compared to five for the

rest of the category. there's a lot of necessarily tiffs and positives. so we would hold at this point. >> let's move on to lennar, after the stock passed its price target. holder veld some headwinds. ava, what would he do with lennar here? >> best-care scenario is hold. they're thought having their best year. unfortunately we don't think things will change. the economics do not favor home builders, and current homeowners are reluctant to give up their percent rate. mortgage rates have been sticky, and so unless we see the fed cutting rates, home builders are not going to be the best category to be in. we would hold only in case

somebody already owns it. that's that the fed will at some point cut rates. otherwise, this is not a good category to be in. >> i think you started to answer my question, eva, what a hold means. a hold means if you own it, don't sell it, but if you don't own it, don't buy it. >> that's exactly it. >> okay. good. i got it right. cool. [ laughter ] finally a stock impacted from the weak consumers. shares of helen of troy headed for its biggest one-day punch, 52 years ago, your trade here, eva? >> 52 years ago? it's a sell. the first quarter was bad, now we're talking about a company where the profits and margins have dropped by one third, and has not been discussed a lot by analyst, when you have a combination of sales dropping,

inventory rising, and margins coming down, when it comes to -- that's a really, really red flag. so their long-term debt has increased. we're not saying they're about to go bankrupt, but this is definitely a company that has to be monitored for bankruptcy risk. it's a sell. >> that would be a go to helen of troy. eva ados. thank you. "power lunch" will be right back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley power e*trade's easy to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades

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welcome back. dow has gone from negative to positive and back to negative territory, down 5 points. we just want to mention darden restaurants, the anti-tesla, for darden, down ten sessions in a row for a 9% cumulative decline.

>> wow. the s&p and the nasdaq are up just a bit. there you see the cause knack up by one tenth of a percent. so sort of a split market. >> and keeping an eye on helen of troy. thanks for watching "power lunch." "closing bell" starts right now. all right, guys, welcome to "closing bell." i'm scott wapner. live from polst 9. in the meantime, let's look at the scorecard with 60 minute to say go in regulation, we are mostly higher, al bet it slightly on the s&p, but we are extending the record highs, so is the nasdaq. the dow will fight it out. the fed chair appear on capitol hill, appearing a bit dovish. s&p and