'd buy the market now but ultimately i would. >> josh brown, last thought for the work. >> it is an emerging market. it is going to be wild. nobody should be shocked. >> are you watching something specific jim? >> thinking today is good for finish line for that pin action on nike. >> "power lunch" begins now. >> announcer: halftime is over. "power lunch" and the second half of the trading day start right now. hi everybody. i'm brian sullivan. both tyler and mandy are out today. we have a volatility warning for you on this friday. buckle up the next three hours could be bumpy. we'll tell you why. by now you know the supreme court has legalized same-sex marriage nationwide, a big win socially but a big win for business, too. a time check on the apple watch. is anybody really buying it or is this big-time product in trouble? kayla tausche live at the new york stock exchange. but we'll start with buy today could end up being one of the

busiest trading days of the year. volume ubl expected to surge in the final few moments of trading because the russell indexes go through their annual routine of adding and removing stocks. big russell rebalance. is there a way for you to invest in this big of mo laterve later today? jim yurio, we got three hours to go now. i guess you have to be a short-term trader to try to make money on the russell rebalance. should anyone even try? >> i think the answer is somewhat complicated. i think in years past there was probably money to be made on this day of the year. it is kind of like a high-stakes wall street version of "the purge." probably $50 billion notional value of stocks will trade places. now the fact that schwab in march was telling its retail clients to buy some certain thams that were expected to be added to the russell, then potentially sell them off in

june to me means that that end of it is probably a little bit played out. what i think is probably a better way to play is are some of the bigger names being booted out from being too successful. their gains may have been muted in the last couple months. maybe they should be bought after the news comes out. >> think of jimmy as the russell 2000 i'm the russell 1000. large cap to small cap. >> what did i do? >> if you want to put it in some of those names but to jimmy's point, this is a win for investors. it was a very lucrative day a couple years ago but it's been tightened up. i don't think there's as much pennies and nickels to be won by these brokerage firms. even if you're not trading, you're still a winner if you're an investor in these indices. >> jimmy, i'm going to defend you a little bit. if you're the russell 2000 and kilberg is the 2000 i guess that makes me the s&p 500, baby.

>> we'll take it from there where the markets are near the lows of the day. but still up about 40 points on the dow. leading that of course is nike with earnings out yesterday after the bell. the nasdaq taking the biggest hit today down by nearly 1 %. what does the russell rebalancing mean for volatility? bob pisani how much more could we see it surge today? >> it is going to be big, could be the biggest volume day of the year. there's $5 trillion indexed to the russell indices. if it's done right, that's the gamble. we don't know. first let me show you some of the additions and deletions. the russell 2000 small cap and 1000 that are in there. there is going to be a rebalancing. a number of companies are adding to their weightings in the indices and some are reducing. hyatt and facebook are adding their weightings to the indices. that will result in a lot of volume there.

exxon-mobil and apple have been reducing their shares throughout the year aggressive buyback programs. they're going to be reducing their weighting in there. you'll see some volume in there as well. a number of companies going from the 2000 to the 1000. there's about 30. but there's about 120 companies that are going into the russell 2000 that are new. new small companies are being added. that's where a lot of the action is. you can get involved in this. there are etfs for this. there is the russell 33000 2000 and 1000. most of the action will be in the last five minutes but if it is done right none of the stocks should move in price because it is not a thing that's based on fundamentals. it is just an indexing move so in theory the prices of the company only move on fundamentals. they shouldn't move on this hopefully that will be happening. we'll be watching. hilton will be watching. exxon right at the close. >> most of the change in the makeup was already disclosed

about a month ago. >> that's good news. they way telegraphed this in advance. everybody has the lists. no surprise. guys right here the specialists, their job is to be able to make sure additions and deletions are advertised in advance. here's how much to buy, here's how much to sell. get on the other side. let's go. >> luckily we have you here to make sure things are done right. >> if it's done right, you don't see any big changes in the prices. news alert on the weekly oil and gas drilling rig count. >> if it's friday it must be rig count day. baker hughes the headline oil numbers here. u.s. oil drilling rig counts down three to 628 total. again the headline number for baker hughes this week on rig counts. u.s. oil rig counts down three to 628. they are down 930 rigs from the same time one year ago. but of course the other part of the story, brian, as always as you know the oil production

numbers are still near their record high levels so again, rig counts continue to decline, although they're slowing a bit. oil production continues at near record levels but for right now down three rigs to 628. back over to you. >> 9.6 million barrels a day. we'll have more on where oil may be in the 2:00 hour. another big supreme court ruling today. the high court declaring same-sex couples have a right to marry anywhere in the united states. hampton pearson live at the supreme court with more. hampton. >> reporter: well brian, phenomenal thing about all this is, hours after that historic ruling, the rally still continues here at the supreme court on the part of same-sex marriage supporters. crowds have continued to come and go throughout this historic day for the court. big surprise as you said 5-4, same-sex marriage becomes the law of the land. justice kennedy speaking for the court majority on that issue. we're also hearing from much of

corporate america, overwhelmingly supportive of the ruling today. among the big high-profile names -- apple issuing a statement saying we applaud the supreme court. this is a momentous step for equality and fundamental human rights. from united airlines -- we applaud the supreme court for affording same-sex couples the respect and dignity they deserve under the law. in the social media landscape, we've seen mastercard changing the background on its logo on its twitter account to a rainbow reflecting the diversity of today's ruling. and of course president obama at the white house, at the rose garden on this history making day reflecting on it all. >> there's so much more work to be done to extend the full promise of america to every american but today we can say in no uncertain terms that we've made our union a little more perfect. >> and on the flip side we

action from many of the leading republican candidates for president, basically reflecting on what they can see here as too much judicial activism. we'll have more on those comments in the next hour. brian, back to you. >> hampton pearson in washington, thank you very much. so what are the implications for business on this major ruling? joining us now vice president of the national gay and lesbian chamber of commerce. jonathan, this is a big win socially. what does this mean for business? not only consumers and workers, but business owners. >> well, thanks so much for having me on this truly historic day. you're right, this is a huge victory for the nation but primarily for business which has always stood on the side of lgbt equality in ways far beyond just changing your logo they've really walked the walk and committed to inclusive policies that have helped lift lgbt inclusion in the workplace further than many governments have. but we have to remember what's important here is that marriage equality isn't the finish line.

it's the starting pistol. we have a lot still to accomplish. we still don't have equal protection in the workplace. you can still be fired, evicted, denied business loans, and lgbt business owners are not equally treated in corporate and government supply chains. we've got a long way to go but this is a huge step forward that we'll be treated with the dignity and respect under the law that we are entitled as equal parts of the american dream. >> if you're an employer jonathan, this is a big ruling because they had a really good discussion on the 10:00 eastern time show "squawk on the street." james stewart of the "times" and carl quintanilla, they were talking about even if you're not gay and you want to work for a company, you may say, you know what? i like the company kind of. they made me a good offer but i'm not going to work there because i disagree with their policy stance or maybe even the stance of the government of the state in which that company is located. this should enhance the talent work pool a great deal. >> absolutely right. we've seen that across the board. marriage equality is good for

business. diversity is good for business. because it attracts talent allows you to retain great talent and helps change the hearts and minds of the community that your business is in. whether you are a major corporation like the 400 who joined the nglcc in the amicus brief, or one of the 1.4 million lgbt small business owners around the country you're doing something to change the hearts and minds of the community where you are. >> open your doors for everybody. it's good for everybody. jonathan lovitz big day. congratulations. >> happy friday everyone. meanwhile, the clock is ticking for greece. the payment deadline is just four days away and still no deal with creditors. meanwhile, a crunch time meeting is set for tomorrow with european leaders. our own steve sedgwick is in athens with the latest. steve. >> reporter: friday night in central athens. young greeks are gathering in the square right in the heart of the capital city of greece. they're not gathering for a friday night out. they're gathering for yet another demonstration, this time

sponsored by the communist matter to protest against the terms laid down by creditors in this continuing battle to avoid a greek default. late on a friday evening we thought we might have a proposal that would work for the greek people. it was a 15.5 billion euro extension to the second bailout package from creditors including the ecb, imf and european commission but it was immediately turned down by the greek prime minister alexis tsipras and his finance minister. they said this was unacceptable to greece. it was blackmail is the way the bleak prime minister put it. the conditionality attached to that extension of financing for greece included more pension reform. more vat reform and changes to the tax code that the greeks had put forward earlier in the week. it looks like as we head to more negotiations in brussels over the weekend, that the greek default is still very much on the cards. >> steve sedgwick in the middle of it all for us. when we come back hold on to your hats. activist investor carl icahn

says the market is overheated but some on wall street warning a 10% correction could be coming. how to protect yourself. plus a developing story we are watching. three terrorist attacks in three continents just today. including one at a u.s. chemical plant in france. we will have the latest on those stories when "power lunch" returns.

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welcome back to "power lunch." check out shares of biotech company series soaring in the first day of trading. just priced last night at $18, now up to $31.91. we talked about what this company does last week on friday. they are a micro microbemicrobe company. folks seem to like it pricing above the range of $15 to $17 at $18 and, again, soaring today. >> quite an opening trade for that company. shares of zoetis getting slammed. drugmaker valueeant was said to be thinking of a takeover. restoration hardware raised from buy to hold. bbt saying the firm's optimistic about a modern product line. shares of finish line racing

higher today on the heels of a big earnings beat. is athletic apparel the best patch of retail victory right now? cramer hars thes the exclusive at 6:00 p.m. time with the ceo on "mad money." meantime a developing story that we are watching at this hour. security forces on high alert following three separate terror attacks around the world. sue herera monitoring it all from the breaking news desk. >> indeed we are, brian. we first received reports early this morning of an explosion at an american-owned air products plant on the outskirts of leon france. police say one victim was decapitated. his head was placed on the gate to the factory's entrance and flags bearing arabic inscriptions were found nearby. france's president, hollande, says police believe the attacker who was arrested planned to blow up entire plant. police also may be looking for a second suspect. terrorists also attacking a resort in tunisia today. eyewitnesses say a gunman burst into the beach area and opened

fire. 28 people were gunned down. the attacker was shot dead by security forces. tunisian authorities originally said two gunmen were involved but now are backtracking on that just a bit. a massive explosion inside a shiite mosque. isis has claimed responsibility. at least two dozen people were killed but the death toll is unfortunately expected to climb in kuwait. we should note that the white house has made a statement on this and basically says it will stand by its allies in this very difficult time. kayla, back to you. >> sue, we appreciate you monitoring those developments for us. we'll get back to you if we have any news. the state department is seen as having some explaining to do regarding e-mails from presidential candidate and former secretary of state hillary clinton. eamon javers is live in washington with more. >> reporter: more controversy now over these hillary clinton e-mails. the house committee investigating the benghazi

affair said last night that they've now obtained 15 e-mails from hillary clinton but they didn't get them from hillary clinton herself. you remember this whole controversy is about whether or not hillary clinton stored e-mails on a state department server or on her personal server. those e-mails turned out to be on her personal server. we turned over a raft of documents to the state department which has been in turn turning them over to capitol hill but the capitol hill folks have also subpoenaed sidney blumenthal, the former hillary clinton aide and confidant. he's turned over a bunch of e-mails to the committee that hillary clinton did not turn over herself. the committee says this calls into question how much hillary clinton has been cooperating with them. the statement from the committee last night, "this confirms doubts about the completeness of clinton's self-selected public record and raises serious questions about her decisions to erase her personal server. the clinton campaign saying we have confirmed that the e-mails second tar clinton provided the department include almost all the material in mr. blumenthal's

production. we're learning more about the relationship here between hillary clinton and sidney blumenthal. he pea a guy the obama administration did not want to be part of the team. hillary clinton or somebody at the clinton foundation put blumenthal on the payroll there even as he was also engaging in business deals in libya with business partners there. at the same time he was advising hillary clinton with private e-mails bearing private intelligence of what was going on in libya according to him and his sources. so a fascinating and complicated situation here. >> it is going to be a fascinating weekend on political talk radio and television. eamon javers thank you very much. can you believe it folks? we are almost done with the first half of the year already. where has the time gone? dow, s&p, nasdaq all close to record levels. the question is this. can the rally continue? it has for years, is something fundamentally have to change? greece? the fed? an icelandic volcano? who knows.

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only this staff of real quality but it was about supporting the country that we live in. i have been the believer in that slogan that the job you may save one day might be your own. >> very cool. american made. that is our new web series celebrating good old-fashioned ingenuity and determination to reach the american dream. to see more go to powerlunch.cnbc.com. many incredible stories there. a big down week for gold showing its weak side especially yesterday. it's off almost 2.5% as we near the close. so far this week. but today it is up if fractionally, just about .1% hovering at $1,173 per ounce. the rest of the metals closing right now, silver copper, palladium, platinum copper the only one positive up by nearly 1%. we've generally seen a weaker market for these precious metals so we will see where those continue to trade as we near the third quarter next week. to the bond market meanwhile

where yields on the 30-year are pushing close to one-month highs. rick santelli tracking all the action at the c. in cme. >> 5-year note yields we are three basis points from making new high-yield closes. the 30s is up up and away. it is two basis points through. let's stick with the long end and maybe let's look at the a irya that really led today. maybe there is a deal with greece already in the cards. many people down here are whispering that. look at the 30-year bund. okay? its pea a lot lower in yield than our 30-year. it was around 1.71%. but it is clearing its zone. let's look at the year to date of our own market. we see a very similar yield. i'm talking for this year but truly we're at the highest yield close on november bunds. september in 30s. the lqd, the corporate grade investment with regard to its

etf, not the cash spreads of barclays, you can see they're at the lowest price going back to january of 2014. it all adds up. euro versus dollar is not 110, but it is getting close. >> once a year we get to make predictions. i had a prediction for a 3% bond yield on a 10-year. do you think i have a chance to be right? >> i think you have a chance to be right but i don't think we're going to hang around there very long but i do think once you get above 2.62%, anything is possible including a brief toy with 3%. >>. kind of like of cubs season. lot of optimism to start -- okay, rick. carl icahn warning about an overheated market. chinese stocks near bear market territory and now a big warning about a 10% correction that might be coming for the u.s. stock market. it comes as we get set to wrap up the first half of the year. how should you position your money for the second half?

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hello, everyone i'm sue herera and here is your cnbc news update for this hour. an emotional and moving farewell to reverend clementa pinckney is under way in charleston. thousands of mourners gathering at the charleston arena. pinckney was 1 of 9 african-americans gun pd down during a church bible study. president obama will deliver the eulogy. in detroit couples gatheringality the county courthouse to celebrate this morning's supreme court decision allowing same-sex marriages. michigan was 1 of 14 states that had banned the unions. mcdonald's is beefing up. the chain is coming out with a bigger quarter pounder patty that will weigh in at 2.4 ounces and have a different shape. the new product will be rolled ow within the month. go to cnbc.com for the exclusive

story. tonight show host jimmy fallon having minor injuring his hand at his new york city apartment this morning. tonight show canceled its taping tonight and will air a repeat instead. we wish him a very speedy recovery at that. that's the cnbc news update this hour. thanks so much sue. let's look at where we are in the markets right now. we have been talking about breaking even on the week but that rally from the open is fading. only the dow is holding into positive territory. helped by nike. nasdaq is down for the third day in three. s&p and the russell down as well. back to today's trading abc news. bob pisani is here with me on the floor. courtney reagan is also with us. >> nike is 35 points on the dow that's why the dow's positive. so the dow is a little bit distorted today. we're not only at lows for the day, we're at the lows for the week. put up the s&p 500.

this is a jinxed week folks. we're at the lows for the week. this is a traditionally a down week week after the quadruple witching. in fact 23 out of 26 years. if we end up down for the week -- looks like we are -- 23 out of 26 years the week after the quad droop witchruple witching has been a down week. china is down 7% overnight. all these etfs everybody plays here in the united states tracking the mainland china stock market, ashr the number one china etf, they're all down noticeably noticeably. 9%, 10%, 11%, even worse than mainland china. i want to show you how remarkable numbers are from nike. revenues -- retailers struggle to get 2% 3% 4% 5% revenue growth out of their companies. when you have 14% for nike in

north america, those are just eye-popping numbers. it is incredible. the stock is reflecting that. remember nike split at the end of 2012 two for one. it's gone from $50 to $109 in that period. even with the stock split. it's been -- certain will i rewarded investors. but those kinds of revenue gains, you don't see them anywhere at all. those are start-up company kinds of revenue gains. >> well certainly the market is rewarding it for that performance. stunning across the board revenue growth. let's get up town to the nasdaq where courtney reagan is standing by. >> so the nasdaq definitely does not look like the dow today. largely it is because of micron. if nike is helping the dow, then micron is really hurting the action down here at the nasdaq. micron actually reporting after the bell yesterday saying that they expect further decline in the price of chips for pcs. forecasting current quarter revenues will be much lower than

what was forecast. getting at least 13 price target cuts from the street today. that's having a pretty severe ripple effect across both the chipmakers as well as some of the data storage companies. we're seeing names like intel, western digital, avago, all pull substantially lower here out of a report from micron if they are predicting something we will see across the board in that industry. it is, however, a strong day for finish line. interestingly enough the company does sell nike goods. perhaps that's some of what we saw out of the strong earnings reports. also has about 400 shop in shops in macy's stores. macy macy's is one of those retail standouts. but consumers names bearing a little bit stronger including bed bath & beyond monster beverage starbucks, as well as a name like ross stores. remember that's an off-price retailer continuing to do well and one of the names in the

green today. i want to end with alarm.com, that company provided cloud services technology for the connect at home. ipo'ing here at the nasdaq. it debuted in about the mid point of the range. shares are up more than 14%. backing off a little bit from the highs we've seen so far from today but at least that's one of the stronger ipos. i know bob pisani was talking about how it's been a mixed bag so far this week. it's about half-way through the year. let's take a bit of a reset, take a breath and get some advice advice for the back half. mike ryan and bruce mccain. bruce, at least for big caps the dow has been -- eh. hasn't done much of anything. do you expect a better or a worse second half of the year for the most widely owned stocks? >> we think it is going to be quite a bit better. we've had a number of things that have kind of held us back both short term and somewhat longer term. the longer term problems of slow

growth won't necessarily disappear but i think you'll get better consumer spending in particular as people begin to find they've got a let left out of what they used to spend on gasoline and some other things. >> mike ryan would you agree with that? >> i do agree but i actually think the place that we prefer to be in is maybe small cap space. i think it is more highly leveraged, the economic recovery is going to grain some traction the second half and i think it also has better earnings momentum. given the fact small caps are trading at relatively even valuation to the large caps we prefer to be in that space right now. >> does that mean you don't like big caps ps oror you just like smaller caps better? >> we just have a preference for small caps. i think you will see a market the second half will be one that will be led by -- to me still growth drivers which are going to be is the u.s. economy gaining some traction. we're also walking into what's likely to be the beginning of a normalization process by the fed. in the early stage of the cycle small caps usually do fairly well in that part of the cycle.

>> on a scale of 1 to 10 10 being total fear can't sleep, 1 being don't care at all, how much are you worried about greece? >> not a great deal. obviously there's potential for some disruption there but the longer lenders and other people have to prepare for a disaster the less effect that it has. i think both the europeans in general and the greeks have done quite a bit to prepare for this. clearly it's better to kick the can down the road for a well but if they can't do that i don't think it will be as bad as most investors fear. >> you like prudential and disney as well. mike i'll go back to you. if your timeline is 20 years, stocks are probably always going to be a good bet. because you should be vefring for investing for the long run as well. i get that. if your time frame is five years from now, are stocks still an overall good deal for our viewers and listeners? >> i think they are. first if you look at relative valuations right now it is still an environment where the equity risk premium is high enough we

think on an absolute return basis stocks will do better than bonds. the second issue is if we see this economic recovery process continue, which we do as the process goes through the fed and normalization normalization, think that's the environment more favorable for equity investors rather than fixed income. >> do you fear a fed rate hike mike? >> let's just say i have healthy respect for what fed rate hikes usually usher in. i would say usually periods of increased volatility. it will be sorting out winners and losers. those that are more rate sensitive sectors are likely to lag now but i don't necessarily fear. i think a fed rate hike is a validation that the recovery process has hit another plane, that we're seeing financial market conditions begin to normalizationnorm normal normalize. those are usually healthy signs for stocks. >> bruce, do we get a rate hike this year? maybe september? >> i think we have at least one this year depending upon how strong the economic data is between now and then because i think they are very very concerned that it is not as strong as some think.

>> bruce and mike you guys are bringing up both very important points. it is not the rate hike itself it is maybe why, which means things are better. guys, have a great weekend. thanks very much. if you missed anything from this interview or want more go to powerlunch.cnbc.com for stock picks. mike likes prudential and disney but other thoughts as well from both of those guys. the question we're asking when we come back -- will raising the minimum wage to $15 an hour really be good for workers or will it force employers to turn to machines? that's ahead in the second hour of "power." here hae a look's a look at today's mystery stock. it is not a stock, it is an etf and it hit a rough patch over the past two months. what is it? let us know what you think. stocks like wi-fi, stocks like gogo. which airlines are best when it comes to wi-fi in the air? the answer when "power lunch" returns.

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the nasdaq the biggest loser this hour. it was down about 1% now it's down about .75%. it is having its worst day in a month and it is having the worst back-to-back days in about two months. biggest losers within the nasdaq, micron intel avago. sandisk. it is contagious in the tech space. chaos in france yesterday. taxi drivers wreaking havoc protesting the car service uber. french police in riot gear using teargas as taxi drivered stepped up protest, some resorted to violence flipping over cars. some taxi drivers blocked access roads to airports and train stations in paris and other cities. you were in cannes. were you impacted?

>> we were. throughout the day when we were heading to the airport, airlines were e-mailing passengers advising that we left six hours before our flight. taxis were blocking off the highways and exits to the airport so you couldn't get to where you were going. leave it to the check-in media executives in line at the cannes festival to figure out a workaround. uber got a service that got so popular surge pricing was 800 euros per ride. but my producer and i hooked it to the train station, then had a nice uphill walk to the airport about two miles but we made it work. we made it there. but certainly causing quite a ruffle down in the south of france. >> as a lot of people noted, this might have been the greatest thing to happen to uber because people couldn't get taxis so they downloaded the uber app for the first time ever and started to use the service. >> that is true. but also i'm not sure how much they liked it when having to take back roads or very out of

the way routes to go to some of these places when they saw their bill at the end of the ride. whether they loved that. but certainly having an option instead of a taxi probably served a lot of people well. uber wasn't really running in the south of france because they were afraid of potential violence on the roads and some of the wrath of the taxi drivers. you really couldn't find and uber where i was but certainly elsewhere in france you could. from uber to airlines, cnbc sorting out the best and the worst when it comes to wi-fi. i'm not calling out united because i just like them. i fly united constantly. but i did just come back from l.a. and i paid $17 for wi-fi. >> it's funny that you say united. because if you go to the data this is new exclusive data we have here at cnbc it comes from route happy. united airlines is actually at the bottom of the list when it comes to the chance of even getting wi-fi at all when you

take a domestic flight. interesting you point out united. most of the service is so bad. they're on the bottom. they're catching up they started at zero this were one of the last people to put why fight on their flights but they're so far behind. they charge a lot of money on purpose because the bandwidth is so slow. they don't want people to share it. >> gogo's like $5.7999, $6.99. i was shocked to see the $17.99. i paid it. >> gogo is the original biggest player in the space and most of their technology is from the ground. like a cell phone tower. all the newer guys are using satellites. a gogo service is going to be slower so they charge you more money because they don't want you sharing all the -- >> who's the best airline? >> united -- virgin america. they're 100%. if you're on one of their flights you're definitely going to get wi-fi but it might not be the best technology. jetblue has the best.

they've even got a screaming deal with amazon so you can stream video. >> appreciate that. for more on that go to powerlunch.cnbc.com. health care stocks rallying on the supreme court ruling to uphold a key part of the affordable care act. but with so many names up so much, can an investor still make money in this group? we look at the best bets in health care. plus getting out of the rat race. >> these college buddies ditched their desk jobs and made their brewing dreams come true. >> my god, we're having a beer and this is what we do for a leaving. >> ""escaping the cube"" next. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the

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what's a "power lunch" without an ice cold beer? in today's "escaping the cube" segment, a couple of investors left their desk jobs so they could crack open a cold one every day. zpr we >> we still look at each other at the end of the day and think, how did this happen? >> hi i'm rich. >> and i'm john. >> we're co-founders of -- >> greenport harbor brewing

company. >> but i used to be a lawyer. >> and i used to be an advertiser. >> we met in college. >> we drank whatever beer we could afford. >> we had this idea that if we opened a brewery we'd have to buy another beer again. >> i worked in advertising for 16 years. >> i was a full-time attorney for about 23 years. >> we both ended up back in new york in the same relative zip code. >> there was this building that was for sale. i called up john. i said remember that crazy idea that we used to have? >> we got all the paperwork together, did the loans and closed the day liamehman brothers went under. >> we were like finish the papers before they actually pull this money back. >> right. >> it was a really old building terrible shape. we spent every vacation weekend, school holiday, did all the work ourselves. when we opened july 12th, 2009 we would get a lot of visitors that would come out from new york city. word kind of spread about, oh

there's this new little brewery out on the east end. >> within eight months we were in whole foods in the city and it was just kind of off to the races from there. >> in the beginning of 2012 i actually made the decision to stop putting a tie on and began running the brewery full time. >> that original brewery was so jammed in it was like sardines. it was really hard to move the amount of beer we needed to move out. >> we started to look for another location. we found this place which allows us over 13,000 square feet of production space. plus a separate tasting room eventual brew pub. >> it is a huge jump in the ability to make beer. >> we brew more than 50 different styles of beer in the almost six years now that we've been open. >> we love our beer. you know? it is not the thing where you work at a restaurant, you get tired of what the menu is. we love it all the time. >> when greenport harbor was founded in 2009 it was one of fewer than 60 craft breweries in new york. but today, there are more than

200, april cording to the new york state brewer's association. cheers to that and an incredible story. for more go to cnbc fnt escape cnbc.escapingthecube. can the good times roll on? the experts think it can and after the break we're going to tell you where they think the s&p will finish up thanks to our own cnbc strategist survey. stay tuned. that and more coming up after the break.

the first half of the year is almost in the books but get ready for the second half which kicks off next week. the dow, s&p and nasdaq are all close to their record levels still, but the nasdaq has been the real story this year. it is crushing the competition thanks to stellar performances by the likes of netflix and amazon. currently up 7% this year. but can the good times roll? dominic chu has the second half playbook and he joins us now. >> kayla, yeah that 7% gain blowing away the competition. the dow is only up less than 1 % right now. as you can see back here as well the dow jones industrial average there, the s&p 500 is up about 2%.

they are all trailing the nasdaq. as for the large cap stock universe, the momentum has been so far this year to date driven right here by disney shares up 22% so far. the biggest drag on the blue chip index, walmart on the consumer retail discretionary staples side of things down 16%. that's the dow picture. that's the momentum so far in 2015. s&p 500, no surprise netflix shares have almost doubled. chesapeake energy down 43%. again the moment plays so far year to date on that basis only. the nasdaq 100. i put electronic arts up here. keurig green mountain down 41%. with the relative strength and weakness so far in the major indices. as for where the overall market heads from here most strategists believe on average we're going to go about higher about 6% from current levels. according to our own cnbc strategist survey we polled a

lot of different strategists on wall street, they are looking for some gains. right now the median forecast for the end of the year is an s&p level of 2,224. that's around 6% higher than where we are right now. low estimates come from barclays and goldman sachs, they think 2,100. that's just about where we are right now. the estimates of 2,325, via and fundstrat. volatility may come back because of the fed situation, greece and everything else. earnings season coming up soon but it looks like it could be a 6% up side move from here if the sell side analysts are correct. >> let's bring in john traynor, great to have you today. >> thank you. >> what say you about this implied 6% consensus move that we could see in the s&p before end of the year, and do you this ink that would potentially be driven by large cap movers?

>> number one, we would love to see it. we're not that high. our forecast is probably for another 4%. 2,180 is our forecast for year end. i would love to see the high end expectations come through. and i agree with your point. we think it is going to be driven by the large caps. those companies, you take a look at the stocks that you just discussed. those companies that are growing revenue able to grow their top line will continue performing just as you just saw in the prior segment. absolutely. >> we talk about large caps as the drivers because large caps they're big just by definition, but their earnings are big as well. just because of the scale of the companies and so that by contrast, makes their valuations look appetizing. but netflix, 180 times trailing earnings? i mean that's a momentum stock. are your strategists or the people that you're talking to thinking that we're going to get more of the valuation driven names or more of the momentum names driving the in exleg of

this rally? >> a lot of that has to do with what's going to happen overall with the earnings tower of the s&p. if you go online right now to cnbc.com with be we laid out all of the earnings per share estimates for where these strategists think we'll go and they all fall within a certain realm of reason. the interesting part about whether or not we'll see the growth is due to a number of different things. earnings season kicks off pretty soon so we're going to know. many of the large mull nye national large cap stocks had access to european markets. we will see. >> john how much of an impact do you think the rising dollar and potential hike in interest rates will have on these large caps? >> absolutely. that's one of the reasons for ow muted expectations. you have a he got rising interest rates a rising dollar. those will be a headwind for the large cap companies. we think the market will move higher but we don't have great

expectations. we think we're sailing in to the wind right now on the equity markets. >> all right. we will leave it there for now. gentlemen, thanks so you both and have a great weekend. it is now almost 2:00 on wall street. about 9:00 p.m. in latvia. that is for all you knicks fans. as we roll into the second hour of "power lunch," the dow is up not big, it is up about 52. we have a huge russell rebalancing coming in the next two hours that could make the final hours of trading extremely busy and volatile. and the supreme court of america ensuring that everybody in this country can marry no matter what their sexual orientation. welcome, everybody. kayla with us the whole rest of the hour as well. more on all of those stories in a few minutes. but your top market story today is more concern over china. the shanghai composite fell over 7% earlier day, the biggest one-day loss for chinese mainland stocks in five months. head of global strategy for

investnet and a cnbc contributor. mike, china's version of the dow, the shanghai xoscomposite has doubled in 12 months. having 5% and 6% swings nearly all the time now. with this kind of volatility is the mainland chinese market really investable or at this point is it more like a casino? >> it is absolutely a casino brian. i've xwn going over there for better part of 20 years. these kinds of moves, you have to remember step back a second. this market is almost entirely retailed, almost entirely made up of chinese speculators and so these moves are fueled in the last several months but a huge amount of margin debt. 4% of the outstanding shares represented in terms of dollars, represented by margin debt. when the government starts pulling back because you get this incredible speculation, let me just give you two numbers. one is the msci china a shares

which is what you are talking about, shanghai over 50 times earnings. overall china market without that is less than ten times earnings. you have two disparate markets here and the crazy one is the one that's invested in the one you're talking about. >> you are making an incredibly important point. there is three main indexes in this china. shanghai shenzhen kind of like their nasdaq and the hong kong hang seng. if our litsteners are looking at the asian side of the etf, they need to know in china what they're buying. it is the wild west in certain ways. it is 1999 here in certain ways. is it not? >> exactly. the shenzhen is tech heavy when they describe it as we have always described the nasdaq here. i have been a huge fan over the years, when in doubt, go do an index fund from someone who's in the active management business. but for a lot of people the

index funds make a lot of sense at least for a corp. in the case of china right now, you hit on a very important point for any viewers thinking about klein and taking advantage of this down draft. you really want to go with an active manager who has the history of being able to traverse these ups and downs because they are so huge. a marketplace that's down 20% which is what the shenzhen is -- as of yesterday, it entered into a bear market. that market -- still talking about about doubles over the past year so there could be no are downside. you have to have active management, people on the ground which is how i've always invested over there. wouldn't think of doing it myself. >> because there are a lot of great companies in china but there are probably also a lot of companies that are not going to be around in five years. fair to say? >> completely fair to say. and early on i invested in some of those and lost all my honey. >> mike holland, real pleasure. a landmark decision from the supreme court earlier today declaring that same-sex couples have a right to marry anywhere in america.

hampton pearson live at the supreme court with more. hampton. >> reporter: well, brian, we know that today's landmark ruling by the supreme court in no means ends the debate in society or the political world. it will in fact be a key factor in the upcoming presidential campaign. to that end, we've had reaction from virtually every leading republican candidate today denouncing the decision of the high court. a couple samples from jeb bush quoting now, "i believe the supreme court should have allowed the states to make this decision." and from wisconsin governor scott walker. "i believe this supreme court decision is a grave mistake." meanwhile, here at the supreme court, the rally continues hours after the landmark decision among supporters of same-sex marriage. of course, we heard earlier today from president obama reflecting on this historic day for same-sex couples and the country. >> sometimes there are days like this when that slow steadily

effort is rewarded with justice that arrives like a thunder bolt. >> that's been a universal reaction. even those who thought this was going to happen now that it's actually happened there is a sense of shock and disbelief but in a very positive vein. brian, back to you. >> hampton pearson in d.c. outside the supreme court on an historic day. hampton, thank you. let's get more on what this means to the business community. joining us now, todd solomon, an expert in employee benefits law at mcdermott will and emery. todd, great to have you here today. >> thank you for having me. it is an exciting day. >> it is. so set exactly what lies ahead for companies who will try to transition their benefits in the wake of this ruling. >> right. this has a pretty significant impact on companies that offer benefits to same-sex spouses, in

particular it now eliminates all the differences between same-sex spouse coverage and opposite sex spouse coverage which primarily was in the area of taxation of benefits up until a few years ago, the last supreme court decision, same-sex spouses used to be taxed on the value of the health coverage that they got from employers. and the supreme court case two years ago eliminated that from a federal tax standpoint but differences still existed in the states and that ends today. so as of today, benefits offered to same-sex spouses can be offered on a tax favored basis just like they can be offered to opposite sex spouses. >> so there are 14 states, todd where same-sex marriages had not previously been recognized in those states. how long do you see it taking for the ben if its to get up to speed with the other 36 states for companies who are based there? >> yeah. usually it happens very quickly. people will probably flood to the city offices today to try to

get their marriage licenses. states obviously need a little bit of time to gear up and issue licenses, but there will be challenges and presumably this will happen almost instantaneously. from an employer's standpoint employers i think can start immediately on the next payroll period that applies to employees to stop taxing any benefits under the state tax laws that they have been doing up until this point. >> there will certainly be a lot of companies figuring out exactly what this means for them and how to adapt to these changes. todd, we'll certainly have you back to talk more about that. >> okay. thank you. >> brian, up to you. well from one supreme court ruling to another. investors in health care still taking a huge move yesterday following the high court's decision to uphold a key part of the affordable care act. with so many names up so much can any investor still make money in this group? a guy that knows about making money in this group, portfolio manager with e squared asset

management. les, you are a great investor but you are also an honest guy. you owned humana and you sold it. now humana may get bought. are you buying it back purely on the possibility of consolidation? >> no. once it's into a deal situation we let the arbitrage guys take care of that. we like humana on its fundamentals. clearly some others have as well. we're sorry to see get them acquired to such good people but it's what happens in managed care. there's been a lot of consolidation and there will be continued consolidation. we still like united. >> seems like everybody was an arbitrage in their own right because they bought everything. were you a buyer yesterday? >> we bought some. but we added to positions more than entering new positions. we do have positions in some of the hospitals so we were glad to see them go up alot. so we added some.

there has been a rerating in hospitals now that the supreme court risk is off the table. we feel good about a lit in value u. >> tenet health care is up 1,800% in six years. it's a hospital company. there's a lots of concerns back then about whether the equities would go away. what's maybe one new name in the hospital health care space that you guys at e-squared have liked and bought lakely? >> universal health. uhs. it is the largest mental health provider in addition to being acute care hospital. we think there is a lot of exciting things happening on the mental health front. i think that's sort of the next frontier on the service side. i'd also add diplomat pharmacy. that's a specialty pharmacy. they are the beneficiary of all these new drugs coming to market. >> les, thanks for coming on the program. let's get more reaction to the landmark supreme court decision on same-sex marriage. gavin newuewsom is california's lieutenant governor, the former mayor of san francisco.

he joins us now to give his reaction first. gavin, ds a big day. but california was a bit ahead of the curve. in 2008 it was legalized, then it was taken away. you've had some time to sort of be in it where it was legal and not. we are cnbc. what can you tell us? you are also a business owner, i believe. what can you tell us about the economic impact of this gavin? because you've seen it. >> in 2004 i made a point and no one understood it. i said we married 40,036 couples. it was about economic development, about jobs. people said why are you having a press conference about same-sex marriage? i said i'm having the same conversation. it is about making san francisco a place that's essential in people's consciousness and minds where people can walk from every conceivable walk of life and feel that their lives matter and they can be fully expressive. it is about people it is about a workforce, it is about a value proposition that i think

companies understand and that's why some of the big heroes in this were the major corporations in this country that signed amicus briefs that stood out early on and said you know what? this is going to hurt our ability to compete globally. >> ceos of companies, for example like an apple, that have been brave and come out and taken that stand as well. so gavin, when you see this now roll out across the united states what are you expecting from the economic and jobs impact? >> well i think, look it sends a message to the rest of the world and a globalized economy that's no longer connected but hyperconnected we're able to assert a little more empathy and assert ourselves with a little more moral authority today versus where we were yesterday from a competitors perspective. people from all over the world come to the united states of america because we're not just going to tolerate you, we will try to celebrate your lives. the backdrop of this is self-evident, that's charleston. when we got rid of the bans on interracial marriage in 1967

that didn't stop charlton. nor will this stop homophobia, this decision. there is still an enormous amount of reconciliation we need to go going forwards but this is a significant step moving forward. >> gavin newsom real pleasure. thank you very much. >> thanks for having me. let's get back to the markets. right now the dow in the green. but as we know largely because of nike earnings. that's not the same case for the s&p and the nasdaq. all major averages are on pace for a negative week as we start talking about what we could see in the third quarter. but we have to get through today. bob pisani here on the floor. the wild swings that we could endure later on in the trade. >> it is going to be the annual russell rebalancing. once a year the russell 2000 and 1000 rebalance. some go into the russell 1000 the big cap, some go out into the 2000 the small cap. let me just show you a bunch of companies are going to be moving around here. 29 going into the russell 1000. 50 going from the russell 1000

to the russell 2000 and the important thing is a number of big companies are just reweighting their overall weighting because they either added stock or they deleted stock throughout the year. hilton and facebook are going to have significant ads. they floated additional stock throughout the year. they'll have weighted increase. amazon and mobile are both buying back stock very aggressively and their weightings will be reduced. exxon intraday the game is to not move the price that. going to get tons of volume but don't move the price. if it closes the last print is $80, that's bad. . they'll call up and say why did our stock drop $3? you're supposed to be able to manage this better. somewhere around 3:55 you'll go out with a statement, okay, we have 5 million, 8 million shares of exxon to sell. buyers come in with a bid, make us some kind of over here.

there are some of the companies going in and out of the 1000 and 2000. but in the case of exxon, it's not going anywhere it is in the russell 1000 it will just have its weighting reduced because they've been buying back stock. remember, the game is don't move the stock price as much as you can. >> for brokers here on the floor, a race to the finish line. >> it is a real auction. they'll go out and say we got 8 million to sell, whatever the number exxon, okay buyers let's get going, get some bids here. everybody needs to know what the price is come on make some offers. >> kayla, kind of reminds me of the nba draft like night. with the first pick the russell 2000 selects -- "x." i didn't hear a the lo of tart of tar heels picked last night. were there? >> no comment. no comment. >> bob, thanks so much. here's what is on the menu for the rest of the hour. up next why apple's newest product, the watch, could have a big millennial problem.

also stand-out stocks in the mighty mid caps. can you name today's mystery chart? this is not a stock chart. it is an etf chart that's had a rather rough patch over the past two months. there a he a big call on this. we'll let you know when "power lunch" returns. stick around.

the nasdaq is a fairly solid decliner in today's trading. could have a big couple changes.

russell rebalancing. le teleprompter says walk the wall. so i'm going to walk the wall. yahoo! intel and micron are down today. micron down big, 18%. lot of concerns around that company. when it comes to the green stocks, not every stock is down you've got monster which by the way, monster beverage? the best non-deal stock in the nasdaq 100 over the past 12 months. staples, mattel charter communications bed bath & beyond. kind of in the theme, retail that's done pretty well. micron and some of the other semiconductor names are, guys names to watch. a new study is finding that most millennials are unhappy with the apple watch saying about after a month the thrill of the watch has dissipated. i'm walking. i'm going to come join natalie morris here. the thrill of the watch -- the thrill is gone saying that it's maybe frivolous or pretentious. you can put the camera on me.

meantime, fbr capital markets saying the apple watch should be a major catalyst for wearables everywhere. so what is it? brian blair, managing director at rosenblatt security joins us he covers apple. and natalie morris cnbc contributor. natalie, this study is probably not what apple wanted to hear. >> well maybe not. i don't know what they care what 11 people thought though. that's the whole whopping sample size. the one problem with this study is that one sample size is too small but the few millennials that were included in the study said that the thrill starts to wear off because you can't do a lot. when people say that to me i can't do enough with the apple watch, i tell them well you're kind ever doing it wrong. you're not supposed to do a lot. you're supposed a see a lot. >> forget studies then. you're a millennial. aren't you? >> i was having this talk with my producer. >> doesn't matter. you're younger than me -- >> i'm right on the cut-off. >> you're younger than me which every year becomes more and more

people. you also are an apple watch owner. forget the study. what do you think? >> i'm someone who has a large graveyard of wherables. >> you're not the only one. >> i felt like i'm not going to stick with this. i've had it for about a month. i really like it and i do actually miss when don't wear it. you're not supposed to use it as a content producer. you are supposed to use this to a tether to what's already happening in your digital life. >> i bought a pair of bluetooth headsets for running, they get tangled, i thought this is great. stopped using them after a couple of months. i don't want something else to charge. >> exactly. >> every socket in my home -- >> when there's no standardized charging unit then you have to plug something else in and now i'm switching out with my main charging unit a different usb charger. it is an annoying ecosystem. >> is this a problem for apple or is this a just slow uptake

situation? >> well it's a little bit of both. it is definitely a slow uptake. the apple watch just arrived in stores this week and you can go get one. there aren't lines. there isn't a two-month wait. can you actually walk into an apple store anywhere around the country and you can purchase one today. that might be a little bit of a problem because it doesn't seem like there's a tremendous amount of demand. in terms of getting bored from one, i have a watch. i've had an apple watch for about a month and a half. for me it is not clear what the killer app is. it is into is to get notifications. it has a few gee whiz factors yet but it is thus far really a non-essential product. i think that's what's this study is saying it is neat to have the capability to get notifications on your wrist but it is not clear whether or not we really need this. >> but what apple is spectacular at -- and i think they are arguably the best company in the history of the world at one thing -- creating need out of something you did not you needed. we didn't know we needed an mp3 player that held 1,000 songs. we didn't know we needed a phone

that could tell us where we are. could this just be an early thing that in five years from now everybody will have a watch and we need it? >> it could be. it definitely could be. what's interesting is they're going to release another iteration of the operating system in september called ka watch os2. it has a new list of features and functionality. maybe that will help drive demand but out of the gate it is really not clear that this is that product. there is not the next ipad or next ipod. i think if we forward the clock two years, there could be a lot of health benefits for this product and that is what could make us all want to buy one down the line. >> given that the technology exists, right? if you are going to accessorize, why not have connective accessories? i think you're right. the medical benefits. >> the medical benefits are important but just because you can do it doesn't mean it is a good idea. you brought up a great point earlier. you've got to charge this thing every single night. for me thus far the utility that i get out of it does not really

warrant that extra thing i've got to charge every night. i'm still hopeful we could see a lot more 12 months from now. >> i'm going to give you the soccer mom perspective because a lot of times i'm driving and i hear a text message and my kids are in the back and -- do i need to reach for that phone, it's fallen between the seats -- i can -- >> no is the answer. >> but then it is not bothering me because i can see any way it is a text message most of the time from my mother. >> note to your mother she should call. then you could use bluetooth and have a conversation and read each other's emotion, by the way. >> but i think because it doesn't take you out of what you are doing, it is a just a mirror of what you need to do or see, i really find that attractive. i want to make the point that apple is really good at consumerizing technology that has already been invented. we've seen smart watches. we had seen pab blets beforetap tablets before ipad. we had seen a mouse. >> great conversation, guys.

we're going to definitely have you both on. the answer is no don't pick up the phone while you're driving. my final comment, my friend who is a doctor is terrified of this because people get their heart rate reading, it goes up it causes anxiety, it raises their heart rate further. a lot of people shouldn't know their heart rate. that's one doctor's perspective. natalie, thank you. brian, great conversation. folks, let us know what you think. we're on the twitter machine. remember all those strict water restrictions for farmers out in california? turns out a restriction is not a restriction if nobody follows them. jane wells live in byron, california. jane. >> reporter: brian, it is hot and dry here today. most of the people the state has told they got to cut back their water usage they're ignoring it. some are suing. this farm where they turned off the tap this week but maybe not for long. that's because their water provider the byron bethany irrigation district, turned off the spigot was ordered to or face huge fines. even though it has senior water

rights. bbid expected this afternoon to file a lawsuit over that. one reason, all the confusion. the state has said in another lawsuit that its order was informational. not enforceable. >> if this is merely an advisory notice how do you file litigation on something that's merely advisory? so we need to take a look at this this confusion, and we need to basically find out what all this means because everybody's confused. >> fifth generation farmer mario anato may join that lawsuit to get his water turned back on. >> we were told about this two, three weeks ago. we irrigated everything we could as fast as we can to keep everything living a little bit longer. >> reporter: here's how crazy it is. right next door is a community that was threatened this week with losing all water until

everyone realized that would be a health hazard. now they are guaranteed water but only through the end of the year. >> we're not watering the grass and we don't wash the car. car's filthy. >> we went to safe way and we bought approximately 25 cases of water. just in case. >> all right. here's the even crazier thing. mountain house was funded by calpers, a billion dollar operation that be went under water after the housing bust. under water would be a nice thing right now. >> jane wells, thank you very much. another look at today's mystery chart. again, folks, not a stock. it is an etf. been a little bit slick in the last couple of weeks and months here. we'll give you the answer on that coming up. and a new world record that literally towers above the competition. that story that crazy video coming up. stick around.

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that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. welcome back to "power lunch." i'm courtney reagan at the nasdaq. the gap is confirming it will be opening a gap and old navy store in the current toys "r" us times

square location. we knew previously toys "r" us was going to be vacating that space at the end of their lease. each of the gap and old navy stores will be about 31,000 square feet. this will open in the year 2017. gap shares trading around the $38.93 range, up slightly today, down 5% in the year. gap also saying it will close about 25% of its current stores that are underperforming or probably should have been closed some time ago. this of course a big edition to the fleet whether it does happen. more "power lunch" after the break.

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hello, everyone. i'm sue herera. here is your cnbc news update at this hour. in the wake of the terrorist attacks in france tunisia and kuwait, homeland security chief jeh johnson is encouraging all law enforcement agencies to be vigilant and prepared for the upcoming july 4th holiday weekend. he said homeland security would adjust security measures seen and unseen to protect the public. president obama and the first lady arriving in charleston for the funeral of the reverend clementa pinckney. thousands of gathering in the college of charleston arena to mourn his death. the president will deliver the eulogy. more than 1,100 federal,

state and local police continue to search for escaped convicts david sweat and richard matt in northern new york state. canadian officials have been alerted as evidence suggests the two may be moving towards canada. safety regulators are investigating complaints that power brakes can fail on some ford f-150 trucks. the probe covers about 250,000 pick-ups from the years 2011 and 2012. those with 3.5 liter 6-cylinder engines. you're up to date. that's the cnbc news update at this hour. a final look at today's mystery chart. it is a etf. it has hit a slick over the past two months. the answer -- the oil services etf, the oih. jackie deangeles, tutor, pickering and holt was out with a note this morning saying they are a little concerned about that sector together because everybody is waiting for the sector to drop. as you reported yesterday, another 40-year record.

>> exactly. we haven't seen that production drop yet. when you look at that oil services chart i wonder if it is not a little bit premature. but remember when it comes to the oil services companies, it is about future projects and future bookings and we do know at some point this production does have to come offline at least a little bit and we do know that companies have cut their cap x budget. that's why some of the selling could be happening in that etf. i want to recap the action for crude today. down just under the flat line closing at $59.63. we had three oil rigs coming offline but the market shrugging that data off. brent turned positive for the day and that took wti up at one point with it because obviously there's conflict still in the middle east, focus on isis attacks. for the week wti and brent both slightly positive. it is now time for "trading nation." it is a nation because traders trade better together. today let's talk about how to cash in on low volatility stocks. believe it or not, there is an

etf that tracks only the least volatile s&p 500 names, the ticker splv. david seaburg, ari wahl. dave, explain how this product works and hopefully tell me this is the final etf we'll ever see in the world. >> hope it is the final etf, brian. no it basically tracks the 100 stocks within the s&p 500 that are the least volatile names. perceived to be the less risky names. won't participate as much in up side, so they think. but also during a correction they're less apt to really fall as much. the last five years were looked at over the low volatility index compared to the high beta index. comparisons were pretty striking. when you see low volatility over the last five years outperformed

high volatility. it was a pretty wide margin on both a price basis and total return basis. we look at the low volatility on a total return basis. it was 107% return in five years. yeah. had a beat of roughly 62. the high beta names, roughly -- i think they returned 89% on a total return basis with a beat of 6. -- 1.6, which is huge. it goes to show you risk doesn't necessarily mean better returns. you can see in some of these low volatility names and outperform the market over a low period of time. >> ari, would you get into this etf now on a technical basis? >> we actually see it the other way around a little bit. the etfs consist of a lot of consumer stable stocks reit stocks. those are a little more countercyclical in nature and we've found they tend to underperform during bull market cycles since the start of the

data back in 1990. we see this underperformance by low volatility as actually a very good thing for the market. investors are still embracing risk. we think that trend in low volatility is still pointed down. we think they continue to underperform. maybe perhaps more important as far as portfolio construction is concerned. we think cyclical areas continue to do better. we'd stay away from it. we'd want to own something a little bit more cyclical in nature technology financials etfs with more of that exposure. >> ari, dave thank you both very much. folks, reminder -- more "trading nation" at tradingnation.cnbc.com. the first quarter was another big quarter for corporate buybacks. cnbc.com's jeff cox working on the story today. if we thought that buybacks were going to stop or slow we were wrong. >> absolutely. the secret sauce for the market over the last six years have

been these share buybacks. it's been a time when we've seen slow profit growth, not a lot of revenue generation there but good earnings growth. companies have been doing it by committing a lot of cash trillions in cash to buybacks. we thought maybe that would start to turn around in 2015. it has not. the first quarter we saw almost a 9% gain in buybacks. $144 billion. the issue here is that they seem to be starting to have a little bit less of an effect. we're watching a market this year that's been slow that's been hard to really establish any up side momentum. just a couple of percent gain. so you wonder if maybe that trade is starting to come off and maybe this is going to start to reverse itself a little bit. >> critics of buybacks will say if companies are buying back stock with their equity whatever, their cash they're not building factories, they're not employing new workers. maybe if buybacks cease to have a positive impact on the market we could see a new cycle of capital re-investment. >> i think you are starting to see that now in the m&a trade.

we have over $2 trillion of. global m&a this year. i think what you also have to consider, the first quarter we saw that big rise in buybacks. we saw a 2% decline in cap x. you wonder whether we do the postmortem on this time in our history whether we're going to say, man, companies really missed a great opportunity to put cash to work for the future and -- >> buybacks don't crowate jobs. >> just to get the short-term gains we see. >> jeff cox, interesting stuff. go to powerlunch.cnbc.com for more on that story. coming up here will raising the minimum wage to $15 an hour really be good for workers? yes, they'll make more. but could it force the companies to turn more to machines? we'll debate that. plus why has consumer product safety commissioning blowing up watermelons? we're going to explain.

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just before the fourth of july the consumer product safety commission warns everyone about the dangers of fireworks and check out how they're doing it -- with a watermelon to demonstrate just how powerful even the smallest fireworks are. they gave other examples some more graphic using stunt dummies as demonstrators as well. not a good sight. everybody remember to be safe. >> that is dramatic. wow. new york state the latest to push for a minimum wage to be raised to $15 an hour. but if this happens, some say it could be a jobs killer. look at this ad that appears in the "new york post" earlier this week from the employment policies institute and it says meet the new minimum wage employee meaning the computer

kiosk. is this a real risk or just a scare tactic? michael salzman, why run this ad? it just looks like a scare tactic. >> i don't think it is a scare tactic when you look at what's actually been happening. actually a couple years ago in western europe where the minimum wage already is quite a bit higher mcdonald's chose to install 7,000 of these touch screen units to replace cashiers. i think the concept is basically if you raise the minimum wage so much the customers continue to demand low prices businesses can't just pass all of that off on to people who are price sensitive. so instead they have to find a way to provide the same service at a lower cost. customer may or may not mind but it is bad for the person who used to fill that job. >> fair enough. but i'll push back because i've spoken with folks that own fast food restaurants in particular. all you got to do is go to laguardia or newark airport and you'll see what i'm talking about. they say i'll pay my workers

more i'll raise my prices everything will be the same. they're going to the automation because it is more reliable. they don't haven't turnover the machine never calls in sick. what's the harm of raising the wage when this is a trend happening before the wage is raised? >> the wage already has been going up as is the cost of health care and things like that. i think you also have to separate to what people are going to say to the press between what their intentions actually are. you look at a business model where all of a sudden a business no longer has to employ four or five people per store, no longer has to have those cashiers on the staff, you start to see why it makes a lot of sense to do that when the minimum wage especially when it gross to $15. >> i wonder if that's the argument to have rather than the minimum wage. i haven't been to the d.c. area airports lately but around here man, every one of them's got a tablet. you just think the number of people look like they're going away around the tab bletszlets are coming in. is this the next big battleground? >> at the end of the day these businesses still need workers to

be able to bring you your food serve your food cook your food. think it is a scare tactic. i think we see time an again that businesses claim that raising the minimum wage is going to mean that they're going to reduce employment but it doesn't happen. people have made that argument with respect to the restaurant industry in seattle. the industry has grown since they raised their minimum wage. we need to step back here. we need an economy that works for everyone not just the wealthy. this industry last year over $500 billion. next year that's going to be over $600 billion. the people working in this industry can't afford to support their families. we need to give them a wage that enables them to be able to support their families. that's what we're talking about here and it is time to do that. it doesn't mean that we're going to have increased unemployment. the research tells us that the opposite is the case that when people have more money to spend, they -- it is actually good for economic activity. it expands demand for products and helps us to grow the economy. >> i agree and all that data is absolutely accurate, you are

100% correct. i think the issue is that this is not history. the reason is that for example, in japan they're testing a robot that actually does cook the hamburgers as well. all the data you're talking about is totally correct. but now we're entering a different world. we're entering a age where we may need to have protection for human jobs down the road. >> i point to the fact that in germany in the manufacturing industry they have much more robotics in their manufacturing. industry than the united states does, but yet they've lost much fewer manufacturing jobs than the u.s. has. so i think we do have to worry about technology replacing jobs for people. that is something that we have to worry about. but i think there's ways -- it means that we have to train people to be able to use the technology so that we're not replacing people but we're giving them the skills to be complimentary to technology. but that's a different issue than whether we should raise the minimum wage in the restaurant

industry. >> i think that issue is probably going to be the issue, that we need to have the training so if these folks perhaps lose that job, they can go make and sell the machines that are going to do that. it was a good discussion even though i took it to a different turn but we do appreciate you rolling with it guys. thanks very much. shares of nike up more than 4% today, of course helping keep the dow at the very least in the green. but can the stock keep going? we'll have one analyst take when "power lunch" returns. >> kayla? i've got to jump in here. we want to go down to charleston, south carolina. the president delivering the eulogy. let's go right now.

giving all praise and honor to god. the bible calls us to hope to persevere and have faith in things not seen. they were still living by faith when they died, the scripture tells us.

they did not receive the things promised they only saw them and welcomed them from a distance. admitting they were foreigners and strangers on earth. we are here today to remember a man of god who lived by faith. a man who believed in things not seen. a man who believed there were better days ahead off in the distance. a man of service who persevered knowing full well he would not receive all those things he was promised because he believed his efforts would deliver a better life of those who follow.

to jennifer his beloved wife to ilyana and alana is his beautiful, wonderful daughters, to the mother emanuel family people of charleston people of south carolina i cannot claim to have the good fortune to know reverend pinckney well but i did have the pleasure of knowing him and meeting him here in south carolina. back when we were both a little bit younger. back when i didn't have visible gray hair. the first thing i noticed was his graciousness, his smile, his

reassuring baritone his deceptive sense of humor. all qualities that helped him wear so effortlessly a heavy burden of expectation. friends of his remarked this week that when clementa pinckney entered a room it was like the future arrived. that even from a young age folks knew he was special, anointed. he was the progdginy of a long line of faith. clem heard their instruction and

did not foresake their teaching. he was in the pulpit by 13 pastor by 18 public servant by 23. he did not exhibit the cockiness of youth or youth insecurities. instead he set an example worthy of his position. wise beyond his years. in his speech his conduct, in his love faith and purity. as a senator, he represented a sprawling swath of low country, a place that has long been one of most neglected in america. a place still racked by poverty and inadequate schools. a place where children can still go hungry and the sick can go

without treatment. a place that needed somebody like clem. his position in the minority party meant the odds of winning more resources for his constituents were often long. his calls for greater equity were too often unheeded. the votes he cast were sometimes lonely but he never gave up. he stayed true to his convictions. he would not grow discouraged after a full day at the capitol he would climb onto his car and head to the church to draw sustenance from his family from

his ministry from the community that loved and needed him. there he would fortify his faith and imagine what might be. reverend pinckney embodied a politics that was neither mean nor small. he conducted himself quietly and kindly and diligently. he encouraged progress not by pushing his ideas alone but by seeking out your ideas. partnering with you to make things happen. he was full of empathy and fellow feeling. able to walk in somebody else's shoes and see through their eyes. no wonder one of his senate

colleagues remembered senator pinckney as the most gentle of the 46 of us. the best of the 46 of us. clem was often asked why he chose to be a pastor and a public servant. but the person who asked probably didn't know the history of the ame church. as our brothers and sisters in the ame church know we don't make those distinctions. our calling, clem once said is not just within the walls of the congregation but the life and community in which our congregation resides.

he embodied the idea that our christian faith demands deeds and not just words. that the sweet hour of prayer actually lasts the whole week long. that to put our faith in action is more than just individual salvation, it's about our collective salvation. to feed the hungry clothe the naked and house the homeless is not just a call for isolated charity, but the imperative of a just society. what a good man. sometimes i think that's the best thing to hope for when you're eulogized.

after all the words, just say somebody was a good man. you don't have to be of high station to be a good man. preacher by 13 pastor by 18 public servant by 23. what a life clementa pinckney lived. what an example he set. what a model for his faith. then to lose him at 41. slain in his sanctuary.

with eight wonderful members of his flock. each at different stages in life but bound together by a common commitment to god. cynthia herd suzy jackson, ethel lance, payne mittleton, lawanza sanders, daniel l. simmons, cheronda coleman-singleton, myra thompson. good people. decent people. god-fearing people.

people so full of life and so full of kindness. people who ran the race. persevered. people of great faith. to the families of the fallen, the nation shares in your grief. our pain cuts that much deeper because it happened in a church. the church is and always has been the center of african-american life. a place to call our own in a too too-often hostile world. a sanctuary from so many hardships. over the course of