this goes for democrats and republicans, we are not here to do that. thank you, and i yield back my time. >> we'll now recognize the gentleman from iowa. >> thank you, mr. chairman. thank you, director comey for being in here today, and thanks for hanging in there until every last question is answered. i'm not a lawyer. that's the good news. i'm a career businessman. i've spent most of my career operating in the high-tech industry. and today i've heard words such as common sense, reasonable person, carelessness, judgment, or lack thereof. i like these words. i understand these words. i think the average american does as well. so i'd like to focus on that. last tuesday, director comey, you said, and i quote, none of these e-mails should have been on any kind of unclassified system, but their presence is especially concerning because all these e-mails were housed on unclassified personal servers, not even supported by full-time

security staff, like those agencies of the united states government, or even with a commercial e-mail service such as g-mail. my small iowa business doesn't even use g-mail for our e-mail because it's not secure enough. i checked with security experts. the going rate to hack into somebody's g-mail account, $129. for corporate e-mails, they can be hacked for $500 or less. if you want to hack into an ip . this is the going rate. are you implying in that statement that the private e-mail servers of secretary clinton's were perhaps less secure than a g-mail account that is used for free by a billion people around this planet? >> yes. and i'm looking to pick on g-mail. their security is actually

pretty good. the weakness is in the individual users. but yes, g-mail has full-time security staff. and thinks about patching and logging and protecting their systems in a way that was not the case here. >> i'd like to ask you, what kind of judgment -- retalked a lot about judgment today. this decision to potentially expose to hackers classified information on e-mail service that's less secured than g-mail, your words. what type of judgment does that suggest? >> the kind of carelessness that i talked about. >> august of last year, secretary clinton was asked whether she had wiped her entire server, meaning did she delete all the e-mails on her server. her response. you mean with a cloth? march of 2015 during a press conference, secretary clinton assured us her private e-mail server was secure, saying the serving was on private property guarded by the secret service. this would be laughable if it

wasn't so serious. i know, you know, my constituents in eastern iowa know you don't have to be a cat burglar to lahack into an e-mai server. one would think that a former united states senator, one would think that a former secretary of state would know this as well. would you agree with that statement? >> you would think, although one of the things i've learned is that the secretary may not have been as sophisticated as people might assume. she department have a computer in her office at the state department. so i would assume the same thing about someone who had been a senator and a high ranking official. i'm not sure it's a fair assumption in this case. >> in your opinion, director comey, did secretary clinton know that a server could, in fact, be wiped clean electronically and not with a cloth? >> i assume -- >> you assume she knows that? >> i would assume it was a facetious comment about a cloth.

but i don't know in particular on that one. >> would you also assume, director, that secretary clinton knew that a server could be wiped clean electronically, that it could be hacked electronically, not physically? you don't need a cat burglar to hack a server? would you assume? would it be reasonable to assume she knows that? >> to some level, it would be reasonable. to some level of understanding. >> once again, for someone who knew these things, or we assume to some level she knew these things, what kind of judgment does a decision to expose classified material on personal servers suggest to you? what type of judgment? >> again, it's not my place to assess judgment. i talk in terms of state of mind, negligence. i think there but carelessness here. in some circumstances, extreme carelessness. >> was her server hacked? >> i don't know. i can't prove that it was hacked. >> so the answer says to me it could have been hacked. >> sure.

yeah. >> and if it was, potentially damaging material, damaging to american secrets, damaging to american lives. could have been hacked and exposed. lives could have been put at risk if that server was, indeed, hacked. >> i'm not prepared to say yes to that last piece. that would require me going in in a way that i can't, but there's no doubt it would have potentially exposed information that was classified. information that's classified because it could damage the united states of america. >> so it could have happened, the fbi just isn't aware. >> correct. >> thank you very much. thank you for being here. i yield back the time i do not have. >> i will now recognize the gentlelady from new jersey, ms. watson, for five minutes. all right, welcome to "power lunch." we've been watching life coverage from capitol hill of james comey being grilled on capitol hill about his decision

not to recommend charges against former secretary of state hillary clinton for using a private server. we're here in "power lunch." good to have you guys. brian is off. hampton pearson is live in washington with the highlights. >> right from the get-go, james comey, almost within moments of being sworn in, as a matter of fact, basically threw down his own gauntlet to the committee, basically defending his decision not to file charges against secretary of state clinton regarding her use of an e-mail. he told lawmakers who was missing from hillary clinton's case was intent to violate the law. he said only once in the last century have charges even been levelled for negligence regarding the handling of these types of government documents. comey also said he saw great carelessness. when it comes to her use of private e-mails and handling on that server by the secretary of state, of course, for the better

part of the last two and a half hours plus, several republicans have been pushed back, citing their differences with the director over that decision not to prosecute. there was quite a moment in the hearing when the congressman from florida basically suggested there's been almost an orchestration, if you will, of end of the fbi investigation, between the hillary clinton campaign, the obama white house going forward, the fbi director bristled at that notion. >> look me in the eye and listen to what i'm about to say. i did not coordinate that with anyone. the white house, the department of justice, nobody outside the fbi family had any idea what i was about to say. i say that under oath. i stand by that. there was no coordination. there was an insinuation to what you were saying that i don't mean to get strong in respondsinresponds i -- responding, but i want to make sure i was definitive about that. >> most of the democrats have

not defended hillary clinton's conduct. they have, instead, praised what they see as the independence and thoroughness of that fbi investigation. michelle? >> yeah, and i'm not surprised, hampton. thanks so much. hampton pearson, capitol hill. let's bring in john harwood. you've been listening the whole time as well. what do you make of what's happened here? james comey calm, cool, and collected for most of that, except for the one time he was concerned about his reputation being besmirched. >> there's a balance that republicans are having to strike in this hearing. on the one hand, extending this conversation, amplifying this conversation is helpful because james comey has sharply criticized hillary clinton for how she handselled classified information. on the other hand, to the extent that they get in a fight with comey and an argument with comey who is a very well-respected guy, the fbi is a well-respected

institution, over the conclusions he drew. the danger for them is that they take it too far and they look like they're not interested in the facts, but they're interested in the conclusion. so we'll see how it plays out. certainly, again, james comey damaged hillary clinton with what he said on tuesday when he came out with these conclusions. the question is whether this hearing adds to that, or actually undercuts it. >> would you agree that the democrats also had to walk a very fine line? hampton made clear, none of them were defending hillary clinton at this point. >> well, right. and that's the choice that they made. not to defend hillary clinton, to basically embrace comey and take their solace in the idea that james comey did not recommend criminal charges. they're content with that and not trying to step up with him and argue with him about what he said about how she handled classified information. >> in the last questioning there, one of the members was

going to questions of judgment and the words recklessness and so forth. this is one of the pillars of the clinton campaign, vis-a-vis mr. trump, that she has the judgment, that he is reckless and she is not. these feel like words that people understand and they're likely to stick with her. >> her argument is that donald trump lacks the temperament, lacks the discretion, lacks the judgment to serve as commander in chief, and she took a direct hit from james comey on her reputation on those characteristics. so this is the significance, the upshot of the no prosecute decision. she avoided the worst, but she got criticized sharply and she's going to be hearing that not just in this hearing, but for months. >> i think there were moments of

frustration, john, when republicans repeatedly asked him, all right, what if he had an employer right now doing this? a lot of them thought it was obvious there would be disciplinary procedures, there would be consequences. but he kept stopping short of what i think a lot of people wanted him to say. >> right. this is what frustrated -- i mean, republicans were frustrated, first of all, but their lack of a prosecution. but they were also frustrated james comey would not give the answers that they wanted about discipline. he said on tuesday when he gave the judgment of the conclusions that he had reached that an employee in a similar situation would face some sanction. didn't say what the sanction was. he wasn't going to get into that hypothetical. but they wanted to have him take a step further and try to say hillary clinton shouldn't have a security clearance, a point that paul ryan has been trying to

make, asking the director of national intelligence to deny her the traditional security briefings that presidential nominees get. or try to get someone to say she'd be fire efired, trying to james comey to say she'd be fired for doing this. he wasn't going to get into that, and that rankled some of the republicans. >> yeah. all right, john harwood, thanks so much. let's take a check of where stocks are right now. they've been losing some steam. the s&p 500 is down by almost six points, down by about .3 of a percent. the s&p 500, we should note, is just over 1% from its all-time highs. let's get down to bob pisani at the new york stock exchange. what we've seen is a drop in wti, which hit two-month lows just moments ago. >> a smaller drawdown expected in inventories. a lot of people trying to argue about bulls versus bears. it's hard to be very bullish,

but the market right now is certainly not arguing for some kind of big drop. if you just take a look here at what we've been doing since the brexit results here, the s&p is only down fractionally. the dollar has been flat. the vix has been declining. it's the treasury prices, up 3% for a while. and the yield has been down. that's been the major effect that we've seen since then. if the market internals are any indications, there's no immediate signs that the markets are in danger of dropping here. the advance decline line earlier this week was at a new high. we've had the most new highs in 18 months this week. we've got a very defensive leadership group of utilities, but nine out of ten are above their 200-day moving average. this is not a market that looks like it's going to collapse. it's also not a market that has a lot of strong trends. i made a joke yesterday about the main train being stubs, but past that, you're hard pressed to see clear indications. health care, small breakout. but i wouldn't say it's a big one. transports have been a problem

recently. finally, people want to know, what's the trading range here? the upside seems to be the 2130 level on the s&p 500. very little upside. but somewhat of a significant downside in the markets right now. the big problem is getting those earnings up, and it doesn't look like they're going to improve much, even for the third quarter guidance. >> thank you very much. so is this -- are we in now the next leg of a rally, or is it a bluff? let's bring in robert luna, cio and ceo of sure vest wealth management. and mark lehman, president and director of equities at jmp securities. we're still in a bull market, aren't we? >> yeah, i mean, we are. we've been shopping around here. >> so why doesn't it feel that way? >> i think it doesn't feel that way primarily because the leadership you're talking about. you don't want to see staples

and utilities leading the market. that's not where the growth is. when you look at the valuations there right now, people are a little bit scared to jump into those names. you've got a lot of uncertainty. if you look at the tv today, what's going on, and that's our next presidential candidate right there. so people are nervous and really afraid to be fully committed with both feet in right now. >> you know, mark, bob just laid out a lot of measures, lots of 52-ye 52-week highs. and on down the line about the reasons that we're still solidly in a bull market. but is a flat market still a bull market? >> well, it's certainly better than we saw post-brexit and earlier in the year. i think what we're starring to see is that our market in the u.s. is going to be considered a safe haven i think for a lot of domestic as well as international investors. i think you're starting to see that in the treasury and in our markets. i think as the year progresses, you're going to see more of

that. i'm expecting a bigger, more upside for the market in the third and fourth quarters when we start to see some of the effects of that. cash flows have been quite good. money is leaving some of those jurisdictions and it's going to come to the u.s. >> let's give you 30 seconds each. it feels to me like a lot of those stub areas, utilities, telecomms, the dividend paying stocks has gotten very crowded. first, mark, you. where can i make money in the second half of the year? give me a couple names. >> i think you're going to want to stay with the growth stocks. i think facebook and amazon are still places that are doing exceptionally well. they're gaining market share. this election cycle, you're going to see facebook's online advertising just explode. you've got 500 million users now on instagram. the stock's gone sideways now for three months. amazon, things are just continuing to progress. we haven't talked about tech stocks in a while. >> 500 million and one on instagram because i joined last week. robert luna, how can i make money in the next six months? >> i think you look at some of the names that have beaten up

and had some really good prospects going forward, names like nordstrom. the stock's been absolutely decimated because of its category. if you're looking for yield, you get 3.5% right there and you're only paying 14 times forward earnings. look at some big secular themes are that are beating up right now. we saw white wave taken out today. those are companies that were down 40%, 50% last year. the next big secular theme i think is cyber security, a name like palo alto networks is our favorite in that sector, down 30% year to date. that's what investor as the market earnings start to slow are going to be looking for is that growth. i think you can pick that up in a name like palo alto networks. >> gentlemen, thank you. thanks for coming by. a single tweet sending chipotle shares lower today. the author of the popular jason bourne series, tweeting this earlier today. my editor ended up in urgent care after being deathly ill all

night from eating at chipotle's. the company trying to move past food-borne illness outbreaks. joining us now the analyst at web bush securities. he's got a sell rating on chipotle. it's worth saying that chipotle says that it has not been notified of any outbreaks or any sicknesses, referring specifically to this tweet. what does this show you in terms of the headline risk that's still there in the name? >> everyone's very jittery. there's zero visibility around the current trends. and so every incremental data point that may impact even more the visibility into a sales recovery in the near term is impacting the stock. the bottom line is we need to see starting in q4 positive coms, and we're starting in q3, and we need to see in the report some kind of data points that

give us more confidence that comps are going to turn positive, and we're on a path towards mid teens coms for two years in a row starting in 2017 to get back up to the 2.5 million pre-crisis level. >> have you got any indications at all that there's any momentum at all? i mean, are they giving away free food, making a new video, will that be enough to turn this thing around? >> so far, it hasn't been. every data point that's come out, we've had to extend our recovery assumptions. and i would expect, you know, more of the same when q2 is announced. we'll see what this loyalty that they rolled out over the summer will do for you. initial readings are that it has been incrementally beneficial. but is it enough to get us to a mid teens type of come starting in 2017? probably not. too early to tell. >> all right. the last question, do you have a sell rating on the stock, does that imply that it's a short? >> yeah, i still think it's a short and i do think that every incremental data point that

comes out is going to delay that recovery trajectory. >> got it. nick, thanks for joining us. appreciate it. the uk's decision to leave the eu sparking a lot of uncertainty about property funds. there are a number suspending trading and cutting their value, but u.s. has rallied. does google have an age discrimination problem? that story ahead. o maneuver quickly. that's also true of a good car company. people have always bought cars. but we saw an opportunity in sharing cars. so we moved fast and launched car2go in 29 cities, all around the world. doing that required dozens of data centers, designed for speed and performance. we built our business on the ibm cloud. because that's what the ibm cloud is built for.

there it is, a decline, we talked about whether television going to reapproach 50, but right now it's been stuck at that $45 level. more fallout from the uk's decision to leave the european union. yesterday we told you about a number of uk property funds that temporarily suspended trading due to a waive of redemption request from investors. now legal and general investment management is also cutting the value of its $3 billion uk property fund by another 10%. ccla, which invests money for charts, religious groups and republican sector, also cut into the value of the value of its $400 million property fund by 5%. $23 billion of investor cash has been frozing in the last week in these type of funds because of brexit. in a post-brexit world, our next guest says u.s. reits will

continue to outperform the broader market. richard anderson, welcome to "power lunch." >> thanks for having me. >> is there any impact whatsoever what's going on, what's going on in the united states? >> well, i think there is. i mean, when you think about where the ten-year treasury is today at 1.4 orless, and the reit dividend, and a dividend that is growing over time, you really have an interesting spread element or dynamic in the space that should give rise to reit stock prices over at least the remainder of this year. we did the analysis -- >> just because of the analysis making the reeits more attractie on the yield basis, that's the impact? there's no investors getting cold feed about investing in any real estate fund out there? >> well, i mean, we're not feeling that right now. >> okay. >> when you think about what's gone on, the environment not

only helps the dividend yield, but also the reits are a capital intensive business, so they raise debt capital, they raise equity capital, and that only fuels their ability to grow further. so it's more than just a dividend story. it's a fundamental story for the business of real estate. >> let's talk about reits becoming the 11th sector on the s&p 500. what does that imply? how much money could be going into the reits sector, and our s&p index funds, i guess they're underinvested right now in reits, so what does that mean in terms of dollars? >> well, the magic number is there's $100 billion of potential flow of funds into the reit marketplace. and that's a function of the reit's market capitalization would suggest a 4.5% wading, and they're only in mutual funds, wading at 2.5%. so that spread is $100 billion. but we don't think it's beginning to be thgoing to

be that fast or that quick. i think it's a good data point, overall a momentous event. i think it will take time for behavioral things to change, such that money managers will make that switch and start to pay more attention to the reits over time. it's a behavioral issue. not necessarily a mathematical issue at this point. >> 12 buy rated stocks in your universe. are there major -- is there major overarching theme here in terms of the kind of properties they may invest in? >> well, i think class a quality is what you're looking for. one name that we like a lot is alexandria real estate. its ticker is a.r.e. it's a class a operator of office buildings. that's one name. simon property group in the mall space. another high quality operator of malls. a lot of people know about simon. we're looking for quality and the best management teams, and good and improving balance sheets. >> richard, thanks so much for your time. appreciate it. we've got the metals close

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hi, everyone.

i'm sue herrera. here's what's happening at this hour. the obama administration proposing eight airlines, including united continental, delta, american, southwest, and jetblue, start nonstop flights from the u.s. to cuba. those would start as early as this fall. the tentative list, though, must still be finalized. the fatal shooting of a black man in his car by a minnesota police officer went viral today. its aftermath broadcast live over facebook by the victim's girlfriend. in the video, the woman who identifies herself as philando castile's girlfriend, says she and her boyfriend were pulled over for a broken taillight. john kerry arriving in kiev today for a one-day visit. he will hold meetings with the ukrainian president and prime minister to monitor the process of reforms before heading to warsaw, where he will join president obama for the nato summit. at least four people were injured, but no one was gored during the running of the bulls in spain.

thousands raced alongside the fighting bulls. the run lasted two and a half minutes. i just don't get it. but that's okay. nobody was gored. that's the good news. >> two and a half minutes too long, sue, in my view. >> yes, it is! it's two and a half minutes too long. let's take look at where we stand on gold. backing away from that two-year high, we're down by a little bit more than five bucks. down by .4 a percent. silver snapping its sixth straight day of gains here, down by almost 2% right now. it is the biggest loser of the group. copper is down 1.5 and slight trades higher for platinum. rick santelli is tracking the bond market at the cme. >> good afternoon. we all watched that hearing. it might seem like morning. fascinating. boy, lawyers and their

vocabulary. 132 yesterday. 142 the high yield today. we're hovering almost exactly in the middle. consider this. 157 was the lowest yield closed before the brexit vote. many of my companions on this floor are looking at that as a threshold to pay attention to. we're still a long way below it. the dollar index is really popping up pretty good. open the chart up to mid june. we're very close to the highest close for the dollar. it's very close, since after the brexit move. you see that steep gain there on the chart. that's the brexit move. but still, lower than we said last year. and finally, draw your own conclusions. i can't tell you how many times all of us in the market and all our guests try to handicap market movement to what's going on in politics. it's very difficult to do. but the s&p was pretty much at the highs of the session before that hearing began. and pretty much drifted lower the entire time thereafter. michelle, back to you. shares are up more than 18%. the organic food maker agreeing

to be acquired by francis danone for $10 billion in cash. let's get the details from sara eisen. >> soy milk and plant-based dairy are hot right now. whitewave owns horizon farm. this doubles their u.s. business and gives it access to fast-growing health-conscious products, something that large food companies are starving for. whitewave, you mentioned the share price at a record high. it is actually trading above the 56, or just right at there earlier, indicating some are seeing a higher counterbid coming in. this is a company growing 20%. they simply do not have it. consumer habits have been changed. innovation has been hard to come by. general mills scooped up annie's

for 38 times cash flow. the big e, heinz swallowing kraft to combine two large companies to gain scale and cut costs. sniders buying the nut company. so how does the story end? the third largest food deal in history. hershey's has rejected the offer, so we'll see if mondelez goes for a higher bid. all sorts of healthy, fast growing brands. that stock is up right now. amplified brands and sniders right now. these companies are getting harder to come by because they're getting scooped up left and right. stocks have given up earlier gains after moving closer to the brexit break even level.

the s&p 1% from its all-time highs. where are the opportunities right now? joining us are anastasia amaroso, and ron weiner, managing director at rdm financial group at hightower. folks, great to have you both back with us. let's go to mr. weiner first. i'm going to ask a simple sounding question. whose answer may be more difficult than it appears. what is your single best investment? >> i think we've known each other too long for that. i think the single biggest theme that we have right now is lose less, even if you don't make more if it goes up. right now, we're concerned. we're not out of the market.

we've exited europe and for the most part asia, except for alibaba, we've exited all that and retreated back to the united states, because with these goths all scheming to try to move the economies, and you know it's not good to fool with mother nature. we don't think it's going to end, or it may not end well. so we see a lot more concerns. so lose less. >> all roads with me, ron, lead to hamilton. lin-miranda is leaving over the weekend. there's the famous words, talk less, smile more. welcome, good to have you. we've got our tin can and the strings all working. we'll now be able to hear you. over the next six months, what is your single best investing

idea for fresh deployment of money? >> single best investment idea is actually not in the stock market right now. i think it's squarely in the bond market. i think credit is the sweet spot in the markets right now. much like the fed, the stock market is looking for a sense of direction, but we just cannot get any. now there's uncertainty about the labor market. there's uncertainty about brexit. so that's why the equity market is struggling. if you look at investment grade credit, i see three reasons for support. fall. first of all, if rates are really not going up all that much, you don't have to worry as much about duration risk. second of all, if you look at the ecb, they're buying a pretty substantial quantity of corporate bonds over in europe, which means that two does help investors in the eyes.

one thing you can do to fight against that is if you maximize your yield. in an environment where rates are going nowhere but down, it seems like 3.3% on investment grade credit or 7.8% yield is looking pretty attractive. >> ron says lose less, earn more. >> even if you don't make as much. tyler, two seconds. >> very quickly. >> on the bond side, i think owning individual bonds and earning those yields is one thing. i think going into funds or anything that is managed where interest rates may at some point be going up, there's a risk there. so i think individual bonds, she's absolutely right. if you want to make less, even in this market. but there's still opportunities. there's biotechs. there's a few places you can still go. >> got to leave it there, folks. thanks very much. go to powerlunch.cnbc.com right now to see what ron is betting

on in china. that is powerlunch.cnbc.com. watching a rather dramatic drop in shares of humana. this has been going on for about a half an hour or so. take a check there, down by 8% right now. we're bringing this to your attention because of the drop in shares. and there's chatter that the justice department will be meeting with humana as well as aetna. the two were slated for a $37 billion tie-up. aetna taking over humana. so there are reports that the justice department wants to meet with both companies to discuss significant concerns. reports earlier had said that aetna would be looking to sell several billion of dollars of assets, but we're seeing a clear reaction to these reports in today's session. fbi director james comey getting grilled on capitol hill about the fbi's investigation into hillary clinton's use of personal e-mail during her time as secretary of state. representative carolyn malloney, a democrat from new york was there, and she joins us now. welcome to "power lunch." >> well, i'm pleased to be with

you, michelle, and thank you for having me on. >> you heard james comey today. i presume you heard his news conference the other day. do you have any concerns that it's possible that the next president of the united states would be described by the fbi director as somebody who was extremely careless when it came to the handling of classified information? >> well, the main point is that the fbi and the department of justice not only director comey, but also the professionals, and he said any reasonable prosecutor would say that there is no case here. there's nothing to do further and that we should get back to work helping the people of america. that was a significant and strong statement. does he have concerns? yes. but as was pointed out, colin powell and other secretaries of states and other people in government have kept both an e-mail file and a personal and a

public e-mail file. >> but my question was, do you have any concerns that the next possible president of the united states has been called extremely careless when it comes to the handling of classified information? i mean, i understand you don't want want to prosecutor her. >> it doesn't -- >> it doesn't concern you? >> it doesn't concern me because i worked with her for two decades, first as the first lady. i was even with her in beijing when she gave her famous women's equality speech. and then certainly as secretary of state where we worked on the recovery of 9/11. and senator from new york and as secretary of state. no one is more qualified. there's no one who i admire and trust more and i've seen her get results and work with dedication and effectiveness in whatever job she's confronting and working on. >> if we have viewers who

watched james comey the other day and today, and we've heard from them, and i'm sure maybe you have, too, who think that there's two kinds of justice in america. there's justice for those who have power and money, and there's a different kind of justice for those who don't. what would you say to them? >> well, i asked him that question. i actually quoted speaker ryan, who made that same statement. he felt that she was being treated differently. and director comey said that's absolutely not true. that he tweets everyone the same. rich or poor. every ethnic group. so he answered that question, and he also said the standard that his office was looking at, that no reasonable prosecutor could find anything that would bring any further action on their part. >> i was talking to governor bill richardson, and he used the

word exonerated, that hillary clinton had been exonerated. would you use that word? >> i would say so, yes. they did not find any intention or criminal activity. did they find carelessness? yes. so he says. but he did not find any wrong there. and yet he cited other cases under questioning where they did have massive amounts of classified material. >> does it concern you that she directly contradicted what james comey said the other day and today? >> she said she did not see any classified information. he said that three do you means have in certain sections of it a see with a circle around it. he thought that anyone would know that that is classified, but after talking to her and other, he no longer assumes that. >> representative, thank you for

joining us. >> thank you for having me. >> representative carolyn malloney. does google have an age discrimination problem? the tech giant being sued for that very reason. and now the government is looking into it. that story is still ahead. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.

guess what. there was another big hearing on capitol hill today, besides that of fbi director james comey about the investigation into hillary clinton. this other hearing held by house financial services chairman jeb hensarling. joining us from the hearing is jeb hensarling from texas. >> thank you for having me. >> this is a lot of revenue for boeing, this deal with iran. it would take a big chunk away from them. are you trying to stop this deal, sir? >> well, i would hope that we could. i mean, we already had a news

revelation earlier this morning from germany. i mean, the chancellor of germany announces that iran is in violation of the jcop. in other words -- or the nuclear agreement. and we're going to reward them by allowing them to have civilian aircraft that can be militarized and, in fact, boeing has previously advertised about the platform of these airplanes that can be used for military purposes. so, yes, i don't understand why there was a bowing carveout in the agreement in the first place. you know, lockheed certainly isn't -- apparently they've announced and made a corporate decision they're not going to be selling planes to the iranians, the largest single state sponsor of terrorism. it's just a crazy policy. >> boeing in a letter to you, in a response, said that actually an airplane deal was part of the negotiations. >> well, i've read portions of the jcop. i don't see it. nowhere does it say that the

united states has to allow airplanes to be sold to iran. it certainly doesn't say anything about allowing this transaction to be dollarized, and it doesn't say anything about the taxpayers of america being on the line for a possible bailout of this transaction. again, to the single largest state sponsor of terrorism, a regime that has a history of cheating on international agreements. and again, the chancellor of germany announces today, just hours ago, that german intelligence has confirmed that they have broken the agreement that they were seeking. technology, missile technology, nuclear technology. it's just absolutely astounding -- >> do you have the power to stop it? >> we're the united states congress. it is our duty. it is our duty to represent the american people. and i think most of them would be outraged to know that the administration is trying to facilitate this deal. >> but do you have the votes to

get a bill passed -- >> well, we're about to find out. i mean, that's why we have bills. that's why we mark them up. that's why we have hearings. it's part of the democratic process. so we're going to take these bills. next week, as part of the house financial services committee that has jurisdiction over these matters, we're going to work them up. i expect to receive bipartisan support. and it's interesting, again, that the treasury and the state department don't seem to be on the same page. boeing says they're not going to use xm financing, so let's codify that into law. the state department says they're not going to allow iran to have access to the u.s. financial system. let's go ahead and codify that into law. if the administration says what it believes, then the worst they can object to these bills is to say they're redundant. well, there's nothing wrong with belts and suspenders. but i think the administration has another agenda and it's not the agenda of the american people. >> sir, thanks so much for joining us. >> thank you. >> on this day when we've got so much going on on capitol hill.

student loan debt stands at $1.3 trillion. big problem. one that hillary clinton says she wants to fix. she's proposing a plan to offer free college tuition at public schools. but there's no such thing as a free lunch. so who pays for it? is it a good idea? she asked cynically. this is after the break. "deals" on their auto insurance. wouldn't a deal involve two parties discussing something? a little give? a little take? because last time you checked, your rate was just, whatever they say it is. why not give you some say in the matter? or -even better- let your driving do the talking. liberty mutual righttrack finally puts you in control of your rates. all you have to do is connect, drive and save. in fact, safe driving could save you up to 30%. with 5% off just for signing up. for righttrack. and the discount is good for the life of your policy. to get started,

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shares of alphabet going lower today. google being sued for age discrimination and now the government is looking into it. josh lipton in san francisco with the latest. hi, josh. >> well, tyler, that's right. the u.s. equal employment opportunity commission has launched an investigation into alleged age discrimination by the search giant, according to a lawsuit in federal court. the case involves a whom who interview withed with google and was never hired. she says google interviewed her in person for four different jobs between 2007 and 2014. she was 47 when first interviewed. she says she isn't the only one facing this ageism. in fact, the suit says the eeoc

has received multiple complaints of age discrimination by google and is currently conducting an extensive investigation into google's employment policies and practices. both the eeoc and google declined comment for this story. the lawsuit against google is scheduled for trial may 2017. this is an issue that goes beyond just google, of course. here in silicon valley, the issue of discrimination is a hot button topic. we know usually focused on race and gender. but as tech changes quickly, there can be a bias that younger engineers are just more attune to what's current and relevant. back to you. >> fascinating story. josh lipton, thank you. florida's toxic algae, it keeps spreading. florida's governor is asking president obama to declare a federal state of emergency. because of that. that story is next.

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i have a lifetime of experience. so i know how important that is. a picture of florida's beautiful green beaches. it's been eight days since florida governor rick scott declared a state of emergency in four counties in that state due to the spread of toxic algae that is covering some beaches and clogging some waterways. now the governor has asked president obama to declare a

federal state of emergency, which would open up emergency loans as business owners continue to voice concern about the algae's effect on tourism in florida. we're joined now by a guy who knows a good bit about this. mark wilson is president and ceo of the florida chamber of commerce. good to have you on today. what are you hearing from individual members of the chamber down there? whose businesses have been affected specifically and how badly? >> tyler, thank you, it's good to be with you. so as you can imagine, as the florida chamber of commerce, we're hearing quite a bit from local chambers of commerce and small businesses. and i can tell you, what we're hearing, florida is very much open for business. people are still coming here. there's a lot of questions being asked. more and more businesses are wondering why the federal government isn't doing anything about this. and so tomorrow morning actually i'll be in martin county meeting with dozens of small businesses to hear firsthand what it is they need, what are they going

through? so that's the situation here. >> have you been hearing that they have lost revenue, that people have been cancelling reservations to come? or that sales are down? what kind of measurables are you hearing about? >> that's the big question right now. what we're hearing is that people are calling, wondering should they still come to florida? and the answer is yes. i mean, we have 825 miles of some of the best beaches in the world. all of the beaches are open. this is limited to one area in florida. and keep in mind, this is mostly canals and inland waterways. we're not talking necessarily about the beaches. and so, yes, the more that this gets politicized, the more people are talking about it. but when people are calling and asking about it, the truth is florida's open for business. we're still having a record tourism year. and it's a little too early to tell. as you know, sometimes the political hype between these can create a bigger problem than the

facts. and so it's important that we share with everybody we're open for business. people are still coming here. absolutely. >> love florida, mark. thank you very much. mark wilson of the florida chamber of commerce. >> thank you. >> michelle? >> it is 2:00 p.m. on wall street. 30 minutes from the close of oil trading. oil falling right now by more than $2, 4% decline 45.33. a smaller than expected draw of collude supplies. two weeks after the uk voted to leave the eu, the impact is still being felt. kate kelly has the story of real estate funds. wilfred frost is looking at the bounceback of uk's top stock index. that doesn't tell the whole story. kate, let's start with you. these real estate funds getting slammed. >> absolutely, michelle. seven british real estate funds have now suspendsed investor cash redemptions in the wake of brexit, citing ill liquidity or difficulty selling their assets

to return those funds to investors in a timely manner. the real estate funds in question are run by the likes of standard life insurance, which was the first to take action on monday. henderson global investors and aberdeen asset management. together they control billions of pounds in commercial real estate investments that include office towers, malls and other properties that can be very tough to sell on short notice, even in better times. morgan stanley analysts estimate that real estate accounts for up to 5% of the assets in the uk mutual fund industry overall. so not a huge proportion, but a significant one. the property funds have come under pressure since the surprise outcome of the brexit vote two weeks ago, which raised questions about london and the uk in general as a hub for european commercial activity. as banks and other financials have traded off, worries have sparked investor efforts to pull money from british real estate funds. which in term have hit this roadblock of not having the cash on hand to pay off those investors who at the same time expect to be able to redeem money at any time. it's a dilemma that bank of england governor mark carney has spoken of as a liquidity

mismatch. and something that regulators in britain are taking a sharp look at, michelle. >> you can't sell a building overnight. >> absolutely not. >> if you invest in a real estate fund that holds physical assets. i mean, it's one of the risks you have to know when you put your money in this kind of fund. >> sure, you're talking about multi-billion pound properties, malls, stores, commercial office towers all over the country. a lot of questions around that market right now. we saw a parallel, by the way, last december with the third avenue funds here. their issue was junk bonds. but they were not able to sell those bonds quickly enough. they're still unwinding that portfolio. >> real estate, it just seems so obvious. the next prime minister of the uk will be a woman. we don't know who yet, but members of the ruling conservative party have voted, narrowing the field down to two candidates. the first, home secretary teresa may, emerging as the favorite of the party with 199 conservatives voting to support her candidacy.

the second, energy minister andrea lietzem. ahead of the 46 votes for secretary michael gove. of course, we all remember margaret thatcher. ftse up, but here's wilfred frost with more. we all love margaret thatcher. she and ronald reagan helped save the western world from socialism. she has a special place for us. >> she does as well. in britain, a little more divided, i have to say. let's come to that discussion in a moment. first of all, let's touch on that ftse 100. it's a common view that the uk equity market is benefiting from a fall in the pound, and the pound has fallen sharply since the brexit vote, down some 12% against the u.s. dollar. when you look at the ftse 100 chart, it's clear to see it's recovered above its pre-brexit level. however, that does not tell the whole story. yes, the ftse 100 is up, but in

dollar terms it's down sharply. and the next biggest 250 companies also down significantly, too. indeed, the overall performance of the ftse 100 is flattered by a few very strong performers. they have soared while the likes of s shire have benefited because they have large u.s. dollar earnings. almost half of the 100 companies are still in the red. three of the worst are home builders, ie property players, while rbs and lloyds highlight. barclays down more than 20%. it's important to explore why the uk banks are selling off. the main reason is the yield curve, which has flattened and fallen even more significantly than the u.s. yield curve. on that note, there is currently a mortgage price war brewing amongst the banks, suggesting consumers may, in fact, be better off following brexit. the other reason why banks have suffered is fear of loss of market share to other european banks.

it is not, however, capital fears which therefore makes it a very different story to what faces the italian banks right now across the channel. >> okay, wilfried, thank you. we've got developing news on the zika crisis. the cdc director making some shocking forecasts and giving some shocking numbers. >> that's right, melissa. in a call just now, cdc director says the situation in puerto rico with the zika virus is particularly dire. he says as many as 50 pregnant women per day may be becoming infected with zika in puerto rico where they do have local transmission. this was part of a white house call to urge congress to act on passing a zika funding bill before it goes on recess at the end of next week. right now, they're in complete gridlock. the white house has asked for $1.9 billion in funding. the house has passed a bill for $1.1 billion in fundsing, but congressional democrats say that includes poison pills that makes

it impossible for them to pass. we're seeing zika spread locally in puerto rico. we don't have that in the united states, but public health officials say we may see outbreaks in florida and texas. so pretty dire situation, especially for puerto rico. back to you. >> all right, thank you so much. continues to be a rough ride for the italian banks, falling again today. they don't have room to go much lower. elsewhere in europe, today is the first day -- there you see -- the italian banks. but today is the first day of the running of the bulls in pamplona, spain. people aren't just running from the bulls. they're running from the spanish banks as well. look at shares of spain's bank. the trade down 45% in the past year. no one was gored today. this happened in the past. but four people were injured. three people taken to the hospital with head injuries. speaking of, also getting stomped, down 43% in the past year. the festival lasts for nine days. runners race a half mile along the course with the bulls at their heels. it only takes the bulls about

2.5 minutes. the last stock, down 72% over the past 52 weeks. >> that's the saying, i don't have to run faster than the bear, i just have to run faster than you. >> right. exactly. >> the dow is down today. our next guest says near-term, we are headed for new record highs, perhaps reaching the 20 to 100 range on the s&p before the year is over. why is he a bull? especially in this environment. let's bring in jim paulson, the chief investment strategist with wells capital management. how much of this is just simply we're the best house in the lousy neighborhood? >> well, i think that's maybe some of it, melissa. but i think there's some good things here coming together for inv investors. we've had two years worth of disappointing economic surprises most of the time here. and the stock market's been struggling ever since the momentum in the united states has come down from where we were

in mid 2014. i think the economic surprise indices have been steadily rising. and we take this week as an example, pretty much good reports across the board leading into tomorrow's payroll friday report. and i think we're going to find out that we've been underestimating economic growth here in the united states. we're probably going to do about 2.6% in the second quarter, and maybe a little better in the second half. and if we do, i think that's going to reignite a bullish optimism here. >> so you want the fed to -- the flip side to this is the more economic surprises to the upside, the fed is not going to be on the sidelines and the rate differential between the u.s. and the rest of the world is going to be even bigger. >> i think you're right. i think our next issue might be that we're underestimating how quickly and how much the fed will have to raise interest rates and how low bond yields are right now. but i tell you what, before you get to that situation, you

probably have to introduce some bullishness into the cultural mindset. and i think initially, as people see the economy doing better than expected, some of the bearishness of global stagnation, of negative yields across the globe will go away and i think that's going to force people into equities. >> which sectors do you like the best? you made the point that you're also hardened by the fact that the breath of this market is broader, but when i take a look at the market, i take a look at a market that's being led higher by dividend yielding stocks, consumer staples. the sector just hit a new high in yesterday's session. are these the kinds of you sectors you want to leave this market higher? >> i don't think they will, melissa. i think that reflects the pessimism that exists. one of the positives i think is we're back climbing wall of worry, and that's reflected in that leadership. i think leadership is going to be taken over by the more

cyclical risk-on parts of the market. >> such as? >> i would look, for example, to sell some of these safe haven assets and take the proceeds from utilities and telecomm and staples and redeploy to financials and to industrials and materials and technology in lieu of the idea that if economic data picks up earnings momentum will return for these more cyclical companies, and that's where the leadership will be to take us up towards maybe 2,200 yet in year. >> we're going to leave it there. thank you. jim paulsen, wells capital management. here's what's on the menu for the rest of "power lunch." hillary clinton's college plan. public schools should be free for everyone whose incomes are under $125,000 a year. could that really work? and maybe nba players would pay for it. nba players you've never heard of signing contracts for amounts of money you could only dream of. i know what i'm going home tonight and telling my son

mackie that he needs to concentrate on. plus, "the wolf of wall street" type party that destroyed a $20 million hamptons mansion. all that and much more coming up on "power lunch."

as student debt soars, hillary clinton is proposing a plan to offer free college tuition at public schools.

it applies to families earning up to $85,000 at first, but increases to $125,000 by 2021. is this a good idea? we have the executive vp for center for american progress. she supports clinton's plan. neil mccluskey is critical of the proposal. is free education really free? how much does it cost? >> it costs a lot. and this plan is basically -- it looks a lot like welfare for the well to-do. like even if you could have and would have paid for this education yourself, we're going to move that cost on to taxpayers. so somebody makes $125,000 a year, their family could probably pay the cost of public tuition. there's also a component of this to make it easier to pay back debt, to reduce debt interest rates. and again, that ends up going

typically disproportionately to well to-do people. people who have gone to professional schools and become lawyers and doctors, or high-paying jobs who wouldn't have trouble paying back that debt. the problem with paying the debt is really with people of relatively low debt who have gone to college and not really gotten anything out of it. >> ms. martin, often the criticism of situations like this is when you subsidize something that is already very much in demand, all you do is drive up the price even further. some people would argue this just makes actually college more expensive across the country. >> that's absolutely not true. it would connect states to a commitment. it would make it manageable for millions of american students who are struggling right now. wages are stagnant. costs are up. cost of college over the last decade is up 40%. >> why is that do you think? why are the prices higher? >> i think the biggest price --

the biggest reason in this context is first because states have begun to pull their support of state colleges away. in the public college sector, there's a direct correlation between state support and tuition prices. >> how does that explain private schools, which have gotten even more expensive? >> well, i think there, there's a multitude of reasons why costs are going up, and we need to demand that schools keep costs down. absolutely the right thing to do. that's what this plan would do. but at the same time, it would provide needed assistance to families to be able to afford the cost that they're incurring right now. 30% of borrowers of federal student loans are struggling to pay back those loans. 70% of students are having to take out loans. families, including middle class families, they need more help to go to college. and this plan is an investment in their future. it's also an investment in the economy. >> think of it, as akin to the

housing matter, when there was all kinds of money out there that was being pushed into ho e housing loans and there's all kinds of money out there today that is available for people to use to go to college, that pushes up the price, whether it's a house or whether it's a college education. >> i think that ignores the details of the plan. there's no commitment that states or schools need to pick in exchange for that aid. under secretary clinton -- >> tyler's point is that subsidies drive overconsumption. >> i think it's really hard to make the argument that there will be overconsumption. the overwhelming number of new jobs today require people to have a college degree. people aren't going to college -- they're going to college because they need to to be economically successful.

>> there are massive subsidies in higher education. it's actually not true that in the long-term, states have cut their support for public college universities. you have seen a small aggregate cut since the peak of the great recession, but they've actually raised what they've spent on higher education. a third of a people with a bachelors degree are in jobs that don't require that. we've seen evidence of inflation where jobs that previously didn't call for a bachelor's degree now do call for that without evidence that the needs of that job, the skills you need for that job have changed. it has led to a lot of waste and not more useful education. >> i disagree.

i think the average american appreciates that getting a college degree means they are going to make more money. they are going to make hundreds of thousands of dollars more over their lifetime. but more and more middle class families are struggling to provide that for their students, for their children. so this is an investment in students. it's an investment in families. more importantly, it's an investment in our economy. every economist will tell you the way we grow the economy is to invest in our people. >> lady and gentleman, thanks. i'm sure this conversation will come up again. in the meantime, let's get back to the markets. dominic has a market flash. >> we've been watching shares all afternoon now. humana especially down by about 10.5% in a heavier than average trade. there are renewed concerns over its planned combination, its acquisition by aetna. as a result of this, reuters is now putting out headlines here saying that they're citing sources that the department of justice is perhaps looking into this particular deal. the aetna humana deal.

and it has significant concerns about the possible merger between the two. again, reuters citing sources. this is also played out, of course, with regulatory concerns with other health insurers in the industry as well. looking at their combinations. so, michelle, certainly a stock to watch here, especially because it now becomes the worst performing stock in the s&p 500. on an otherwise quieter, calmer day. >> there's been so much consolidation in the sector. especially in the wake of health care reform. dom, thanks so much. the dow and the s&p hitting session lows. the s&p 500 is lower by nearly nine points and the nasdaq is flat. concerns for investors now going from brexit to earnings season. we're going to talk to a man who says he has a system for predicting earnings. he'll tell us what he sees ahead. and a developing story we are watching right now, the cdc out with shocking new data on the zika crisis. details next. at the beginning of the 21st century,

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developing news on the zika front. the cdc says as many as 50 more pregnant women in puerto rico are becoming infected with zika

every day as the infection spreads. the pharmaceutical reporter meg tyrell joins us now. 50 more have it, confirmed? or a forecast or supposition that it is spreading at that rate? >> this is an estimate that the cdc director has just given us, saying as many as 50 pregnant women per day may be becoming infected with the zika virus right now. >> but not confirmed cases. >> not confirmed. there are more than 300 pregnant women in puerto rico with confirmed zika virus, and they have had their first birth of a baby with microcephaly, this birth defect associated with the virus. it's expected that as some of these women carry their pregnancies to term, we will see more microcephaly cases in puerto rico. and right now, what the cdc is saying is that there isn't a coordinated mosquito control effort in puerto rico going on, and they're urging them to start aerial pesticide spraying to try

to fight the mosquitos that carry this virus. >> why don't they do that already? >> it seems that there are concerns over the environmental impacts of using these pesticides. what the cdc says is these have been used in florida. the epa says these can be safe if used correctly. so this is the argument going on right now. >> so clearly the president and others are urging congress to pass funding for a zika vaccine? there are many in this fight against zika. it also cautions that a vaccine could be decades off. >> that's right. and so right now, the white house actually just had a call trying to urge congress to pass a bipartisan bill before they go into their seven-week recess next week. there is this complete gridlock right now over how to fund this evident against zika. the white house is saying this is going to hamper efforts to move vaccine development to the next stage of trials. we're already there with some early phases of clinical trials, and potentially starting this fall. but they're saying there will be a delay if there's not more funding. >> i think you started to say,

or maybe you finished saying it, has there been an increase in the number of cases of microcephaly that have appeared in puerto rico? are we expecting it? do we know? >> they are expecting to see an increase in the number of cases of microcephaly in puerto rico. right now i believe they've just had their first one in may. and as these pregnant -- >> tied to zika? >> i believe, yes. >> believed to be. >> a baby born with microcephaly. what happens as they get older? >> microcephaly is the abnormally smaller development of brain, so you see these babies with very small heads. so public health officials say often these children can't walk, some can't see, they can't hear. and there are other brain defects associated with the zika virus as well. so essentially it gets into a pregnant woman and then it completely disrupts brain development in the developing baby. >> is there any reason to believe that what is going on in puerto rico can happen in any of the states in the united states? >> well, we do have the mosquito that transmits the virus here in the u.s. we have seen clusters of a similar virus carried by the same mosquito.

so public health officials say it's likely we will see clusters of zika in florida and texas where we have seen popping up of those. >> but they spray in florida. >> and they have a very strong mosquito control effort there. >> okay. >> thank you, meg. appreciate it. a big late day drop for oil. let's take a look there. it's down 2.09 cents, about a 4% slide. back at 45.39 now per piece from the $50 we saw not so long ago. we'll go live to the nymex for the closing trades when "power lunch" rolls on. your dentures seem to fit fine when you first put them on.

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hello, everyone. i'm sue herera. here is your cnbc news update at this hour. house speaker paul ryan says he's written a letter to james comey, asking him to release all unclassified information regarding hillary clinton's e-mails. he sayshe should not be allowed to receive classified briefings during the campaign. >> in three weeks, she's going to get unfettered access. no way. she has just been proven to be dishonest about what she said she did and she's been proven to mishandle it recklessly.

>> president obama boarding air force one at joint base andrews this morning as he heads to warsaw for a nato summit. the meetings are set to take place friday and saturday. israeli prime minister benjamin netanyahu denying reports of an attempt on his life in kenya during his tour of africa. he was responding to a reporter's question following an anonymously sourced report in a kuwaiti newspaper. and ufc star jon "bones" jones will not participate in his highly anticipated fight this weekend with heavyweight champion daniel cormier. this after a possible failed drug test. the potential violation came from a june 16th test of the usa anti-doping agency when they administered that test. jones denies taking any illegal substance and apologized to cormier. you're up to date. that's the news update this hour. back to you, ty. >> thank you very much.

>> take a look at the red numbers on the board. i guess not. the story is oil. hi, jackie. >> good afternoon, tyler. a more than $2 drop at the close here. it did at one point drop. what happened today? three things you need to know. that inventory number, a draw of 2.2 million barrels. it wasn't as big as traders expect. the second piece is that total inventories are again at record levels here in the united states. and timely, we broke through that $46 level. we've been testing it. it's been a critical support for a few weeks now. so today we have the momentum to breakthrough and hold, and traders always say that's what it takes to take the next leg lower. $43 could be the next stop. back to you. >> all right, jackie, thank you. it has been a bad year, to say the least, for italian

stocks. the italy ewi has lost a quarter of its value this year, making it one of the worst performing etfs around. here to discuss, boris, taking a look at this, it's worth noting that 24% are financials. we know that that sector has gotten clobbered. >> they need to be recapitalized. that's really the core of the issue. the italian banks can be recapitalized by the italian government. there's a lot of back and forth between matteo enzi, angela merkel, and the eu leaders. italy to me is the next domino to fall in europe. it has really been teetering on the edge of collapse for a long time. as a matter of fact, to give you an idea of just how slow growth in italy has been, i believe since the year 2000, the growth in italy has been slower than the growth in japan. and there's a tremendous amount of very, very negative political feeling now. i think it's the five-star party. is winning a lot of the polls right now, which means there's a

tremendous amount of euro skepticism within italy, if you have all of this -- if you have all this turmoil, basically going on in the country, it just bodes very badly. >> clearly, something that's teetering on the brink is not going to be something that you want to invest long in. is it a short at this point, already having lost a quarter of its value? >> yes. >> it is? >> yes. you certainly could have a debt cap bounce. especially if you get any kind of news on recapitalization on the banks. you will naturally have a very, very strong and swift short coveri covering rally. so any positive news on that front, it's a buy for a quick flip. >> all right. boris, thank you. for more, head to tradingnation.cnbc.com. ketchup has not gotten -- >> catsup, that was the origin. the indonesian condiment.

>> ketchup as we call it here hasn't gotten a makeover in some time. but one start-up wants to do more. >> here's how two foodie friends decided they were going to disrupt the condiment aisle, starting with ketchup. take a look. >> ketchup. that's what these two guys thought about their last semester of college while everyone else was out partying. that's right. i said ketchup. >> one day, we were just talking about how weird it was that if you go to the grocery store, and you walk down any aisle, you're totally overwhelmed by choice in everything. a million different cereals and yogurts and salsas, but this one area of the store, ketchup, hadn't changed in 50 years. and we thought, that's really weird. let's see if we can do something about that. >> could we create a ketchup that was in line with the way that we wanted to eat, and also satisfy that really specific flavor that people look for when they reach for a bottle of ketchup. >> so the brown university students headed to the kitchen and hosted a tasting for friends. >> yeah, the party was weird.

and we had -- fortunately, we have a lot of weird friends who came to it. so they were into the idea. >> we researched the history of ketchup and found lots of ketchup recipes and we gave people rating cards when they came in. we wanted to make something that people really liked. >> their regular and spicy ketchups were a hit. after graduating, mark took a job in new york in consulting, while scott took off to tokyo to work in banking. but the two couldn't kick their ketchup obsession. these guys worked on their business plan on nights and weekends, and in 2010, the partners launched sir kensington's, a natural condiment brand. >> ketchup but better. it's adult ketchup. >> products are painstakingly tested and prepared, all made in america. today, sir kensingtons is in 5,000 stores in all 50 states and canada, and also sales on line at around $5 for a 14-ounce bottle of ketchup. and by the way, who is sir kensington? don't bother searching wikipedia. it's just a fictional character who serves as inspiration to the

co-founders. >> bringing the charm and the attitude of what sir kensington represents as a victorian naturalist and a spice trader, and bringing the humor and creativity back into food is something that we're really passionate about. and something that we connect with our customers on. sir kensington as a brand, it's about not taking yourself too seriously. when you only make condiments, you can't take yourself too seriously. >> they may not take themselves too seriously, but the company's growth is no joke. they've grown 1,500% since 2012. and of course, you can read much more about entrepreneurs like sir kensingtons at cnbc.com/makeit. >> i love sir kensingtons. >> i have the chipotle mayo. >> it's the best. it's delicious. and dominic just reminded me, they were a power pitch and dom was actually out. >> he blew it. >> these guys have obviously been reviewing. >> i put that on my tomato

sandwich. >> and your instagram is? >> one tomato two tomato. >> only tomato sandwiches. some of them have sir kensington. >> that's very specific. >> thank you, kate. >> that was fun. if you just saw on the screen, we had an alert that they are going to give an extension to institutions to the volcker rule, which means banks have been forced to sell off things like their hedge funds, any kind of prop trading they were doing. anything that was truly dedicated to banking, peer banking, as paul volcker would have liked to say, the guy who named the volcker rule. a lot of these institutions got a lot of time. a lot of people think it's one of the reasons why there's been less liquidity in the bond market. >> an extension on the test. >> right. >> you don't have to have that paper in until next week. >> not too much reaction on the financials. but let's take a check on the broader markets. the dow and s&p 500 both close to the lows of the session here,

the nasdaq is hovering in positive territory. coming up, a man who says he can predict earnings season, or at least he's got a read into earnings season. he'll tell us what he sees this time around. stay tuned. and now the latest from tradingnation.cnbc.com and a word from our sponsor -- >> when it comes to investing, there are really two popular methodologies, fundamental analysis which focuses on things like earnings, re-s and cash flow, and technical analysis, which focus on chart patterns, price movement and momentum. most employ some method of both methodologies when making investment decisions. you pay your car insurance

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earnings season is right around the corner. joining us is lawrence gala. the altman index has shown a high correlation with the s&p 500 and gdp. lawrence, great to have you with us. nice to be here. >> the important thing to note is these findings are based on the first two months of the second quarter. they're as realtime as they get. they miss out on that last month

of the quarter. do you think there's going to be a big deviation from what they're seeing versus what actually came out in the report? >> we don't think so. the impact may happen in the third quarter. i think the strengthening of the dollar will have some impact on some sectors. it was only a very brief period of that in q2. >> let's get to some of the findings that you're noticing. some big surprises particularly in industrials and technology. what are you seeing? >> well, in industrials, we've hit perhaps a major inflection point. after two years after quarter after quarter of declining margins, profit margins are up about 8% on industrials. it's the best growth in two months and allows companies to benefit from their operating margins. in technology, 16% revenue growth, 15% -- excuse me, 15% revenue growth. 16% profit growth. so we've got big growth and expanding margins at the same time. which is an unusual combination.

this was missed in the first quarter, which was also very strong for i.t. i.t. spending almost flat in the first quarter. that's been revised up to 4%. so the business model is based on sass, based on cloud, and the return on investment the customers are getting. >> and health care is a real big loser in this quarter. the continuation of a trend that we've seen and this is continuing pressure from the aca? >> well, i think it's hard to know exactly. revenue growth has kept up over 6.5%, but health care companies just aren't turning that into profit growth. the margin compression is coming in par from increased labor cost as capacity is expanding faster. i think we're seeing some negative economies of scale. we're also seeing reimbursement pressure, whether it's more states with more things moving to preauthorization. >> so we've hit the highs and the lows out of the index and

the report. in terms of the overall picture, so many people keep harping on a profit recession. is that the takeaway that you're getting as well? >> profit mar ygins are under pressure and i think they'll continue to contract. i think we're still looking at a positive g and p growth rate. the initial estimates of q1 really came in too low. we saw gnp growth being well over 1% in the first quarter. that's come out. with the revisions, we're looking at q2 being north of 2%. the economy overall is still bouncing along. >> all right, lawrence, great to see you. thank you for your time. >> thank you, melissa. a bunch of basketball players you probably never heard of are signing huge contracts for tens of millions of dollars. more than steph curry makes. it makes me wish i were a little bit taller. "power lunch" will be right back.

cnbc's julia boorstin speaking with argentina's president in sun valley idaho just a few minutes ago. the big news, he says soccer star lionel messi will come back to play for argentina.

messi had said he wouldn't return to play for the national team after this year's copa america loss in the finals to chile. >> i talked to him on the phone, and i'm sure that he's going to come back. he's the best of the world. we are lucky to have the best football player. and i think that we will be very competitive in the next world cup. and this time will be our time against the germans. >> there you have it from the argentine president. earlier this week, messi was convicted in tax fraud in spain, sentenced to 21 months in prison, but it's unlikely he'll serve any jail time. in spain, it's also common in italy, if you get a sentence less than two years, you can just be on probation instead of actually going to prison. >> so, he gets a break there. >> he gets a break. >> like he didn't do anything wrong. >> does he have to pay everything that he owes? >> he has to pay a 3 million euro fine, which is the evasion. but why would you have a sentence -- >> if you're not going to apply

it? >> doesn't make any sense. >> i don't know. moving on, nba free agency is under way. the names pulling in the big paychecks are not necessarily the big names. $153 million. memphis grizzlies' mike this ye. for the largest nba contract ever. we're talking shaq, michael, anybody. the los angeles lakers timofey moskov is outearning the reigning mvp steph curry by 25% annually at 64 million and ryan anderson of the houston rockets lands an $80 million contract nearly doubling curry's. imagine what those guys will make when it happens. joining us to talk about the massive contract and the little known players signing them is nbc sports' dave briggs. good to have you with us. >> i was looking at moskov. in the finals he played a total of 25 minutes. he didn't get into -- zero minutes in the last four games. he had a total of 7.7 rebounds

and one block. that shows you how valuable he was to the cleveland cavaliers. what the hell is going on? >> it's absolutely absurdity. we used to say teams throw around money like it's monopoly money but it's no longer that. moskov makes 16 million a year, 7 feet tall and five rebounds per game. nba finals, matthew dellavedova played two combined minutes in games six and seven, the biggest two games of the season for cleveland. he gets 9.are 5 million in this free agency absurdity that's going on out there. another guy that you mentioned, mike conley, largest deal in nba history. never made an all-star team in nine years. a very good player, but he joins kobe and michael jordan as the players to make $30 million a year and one more guy you mentioned, ryan anderson, four years -- >> never heard of him. >> that's tom brady.

>> never even heard of him. >> and that is -- when you put it in nfl perspective, that is tom brady money, $20 million a year, brady-like money for a guy most have never heard of and who is a good player but 13 points per game. >> this is more money chasing a fixed commodity i suppose because the television contract has just become much more lucrative and the salary cap has gone up, right? >> well, you're talking about the cap not just going up, but going up from 70 to 94 million in one year and more than 30%. it will get more absurd next year when the cap goes up above the $100 million plateau but you can't argue with any of it. if the owners weren't making this type of money you wouldn't be handing out the new contracts. the new tv deal, $24 billion and they have the money or they wouldn't be dishing out these contracts. it's just hard to believe that guys like kevin durant and like dwyane wade at $27 million don't seem that absurd when you compare with the mediocrity

being awarded. >> chandler parsons, sounds like the name of an investment banker and making investment banker money, making 9 million a year. >> yeah. >> has anyone done -- you remember both "the blindside," michael lewis' back and the one on baseball, "moneyball" which really explored the value of players in sports and they found the left tackle was really the most valuable player other than the quarterback. has anyone done that kind of analysis on these basketball players? is there any -- what i'm really asking is there a justification behind or in the numbers for these guys making this money or the money is there chasing it? >> well, believe me, nba teams are using analytics every bit as much as baseball if not even more so today so the moneyball concept is familiar to the teams. houston rockets first to use the moneyball analytics and handed out that $80 million contract to

ryan anderson but i don't think that's what's justifying the absurd numbers. i think it's the economics of the league, given the new tv deal and given that you have to spend to floor. there's not just a cap. there's a floor that you have to spend over or you get hit. also the league has to delve out 51% of revenues to the players so they technically have to spend this insane money. listen to this. 100 players next year have a cap hit of $10 million or more next year, 100 nba players. >> dave, thanks very much. >> dave briggs, nbc sports. >> crazy. >> a wall street-type party wolf destroys a wall street mansion and we'll have that coming up next and the averages today taking a hit. we'll be back in two.

take a quick check on the markets now. the s&p 500 close to session lows at this hour. the big drop that we saw in crude oil not really having too much of an impact. we should note the wti dropped and the s&p 500 down by eight points. the biggest losers on the dow this hour, include a lot of the oil names, chevron and exxon and also take a look at verizon an united health. some winners at this hour. western digital raised its guidance last night and micron technology.

let get to dom chu for a market flash. >> shares of wendy's todaying a mid-afternoon briefing. in a previously disclosed peeves information they say that hackers did penetrate their systems back in january. previously disclosed back then, but now they are indicating what the hackers stole. it could be credit card information, card holder names, debit card numbers, expiration dates and verification values among other pieces of data. that says the company could have affected a malware attack that affected 1,025 of its franchise res trnts in the united states so certainly wendy's a stock to watch. >> we will. thanks, dom. wolf of wall street type party at a rented mansion in the hamptons reportedly left the house in shambles and now robert frank has new news on the story. >> more capital has fired the manager after the wild party in the hamptons went viral. barna hope of theed a

spray-a-thon party which estimated 1,000 people, champagne showers, girls in bikinis and the rapper performing on the balcony at the $20 million mansion in bridgehampton. mr. barna's personal judgment was inconsistent with the firm's values and is no longer employed by the company. sources tell me the 31-year-old trader traded in structured data and debt. his performance most recently was not great. every year there is a grady controversial party in the hamptons. par for the course. wealth gone wild. look at all the people. >> i read in the people they actually destroyed the concrete around the pool. >> the owner of the house who is preparing to sue barna said there were 1,000 people at this party. >> 1,000. >> 1,000. that's a fire hazard. >> why wasn't i invited? >> my weekend was really much quieter. >> thank you, guys. >> what a story.

>> lose your job over that. think about that before you have a power. thanks so much for watching "power lunch." "closing bell" will start right now. hi, everybody, and welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffgriffeth. stocks in the red, telecom, utility are the worst performers and plenty of days when they are the best performers. just that kind of market. another area that's been struggling lately for obvious reasons, european banks, but we have someone today who says there could be a buying opportunity in those beaten down names, and he will explain why coming up in a little bit here. >> apple's pain may be samsung's gain. posting strong numbers for the galaxy phone. where does it leave the new apple iphone coming out? we'll talk about that coming up. >> and shocking new numbers from the cd