level? >> i think it's a fade and trade environment for oil and the relevancy, the impact the correlation on the s&p itself you're making a mistake by selling equities thinking that oil breaks down. >> new record highs for the s&p 500 and the nasdaq. i know that will be one of the stories coming up on power lunch which starts right now. ♪ thank you, scott. i'm melissa lee. the naz dam and s&p 500 hitting record highs again. here is a staggering stat, five stocks account for 30% of the gains this year. which companies are they? what happens if they begin to roll over? plus, we talked a lot about the retail reck, best buy is a bright spot. it's up now more than 80% in the past one year. best buy the best buy in retail right now? it's back to the future for amazon. we'll, plain. the stock just a few bucks away from hitting 1,000 bucks a share for the first time ever. "power lunch" starts right now.

♪ ♪ got to get back in time here is what else is happening at this hour, it's a good time to buy a house, if you can find one for sale. mortgage rates hitting the lowest level since november. the 30-year fix now 3.95%, but housing inventory, the number of homes for sale, remains very low in some cities. the home of the little blue box is giving investors a gift. tiffany boosting its quarterly dividend by 11% and more departures at ford. this time it's global product development chief is leaving. becky, thank you very much. folks, stop me if you heard this one before -- it's another record-setting day for your investments. we're in the middle of a six-day win streak propelling yet you heard scott and melissa say i but i'll say it again the s&p 500 and nasdaq hitting new highs. the dow not far behind. check this out, the nasdaq is now up 16 of 19 trading days so far this month. that is putting it on pace to have the most up days versus down days of any month since all the way back in september of

1996. wow. most of the dow stocks are up led by travelers. as melissa said, best buy, pbh and dollar general are leading the s&p 500 and we'll find more about the best buy best buy, i see what you did, melissa, in a few minutes. >> you're so clever, brian. the story stock of the day, amazon is closing in on the magic number of $1,000 a share. we'll go inside the numbers. >> staggering run here for amazon and the bulls have certainly been in charge. you look at just the five-year chart, 370% gain for amazon shares. quite a move higher here. if you look at some of the numbers behind this particular move higher, what it means now for amazon shareholders and some of the investors out there is take a look at this. we're talking $477 billion in terms of total overall market cap. that's going to be a huge number here. it makes it twice as big as walmart. just to put some of that in context for you. as we talk about the idea that amazon is moving this way, this

is also a stock where almost everybody out there is bullish, which may get some people a little worried. the fourth biggest stock in the overall s&p 500. now 84% of analysts say it's a buy and the average analyst target price is $1,090 a share, 10% upside from here if those analysts are correct. just to give you one more interesting note here, $10,000 invested 10 years ago in amazon stock on a split adjusted basis, it was $68 stock back then, it's worth about $145,000 today. so great run. make not bit coin, mely sarks but certainly a great return, guys. back over to you. >> thanks so much, dom. more now from bob who is on the floor of the new york stock exchange. hi, bob. >> hello melissa. this is different. the rally is broadening. i want to show you the s&p 500. remember way back the 17th that was what a week ago wednesday. look at that big dip. remember there were concerns over mr. comey, former fbi director. there were charges of

obstruction of justice floating around, lot of concerns around mr. trump and then it all went away. what happened? the president stopped tweeting as much. he hired lawyers and went to europe. it's that simple, straight line up from there. notable new high. i talked about breakouts. citi group 52-week high. deere, lockheed martin, north rop, lot of the credit cards, mastercard and visas. over 200 haven't seen that in a while. at the same time, oil is down despite the opec announcements of disappointment and energy stocks can't really get going. we have new lows on a number of energy stocks here. that's the big disappointment. retail earnings, here is something odd. good retail earnings. haven't seen that in a while. williams sonoma did well. best buy had a nice beat. the big disappoint chlt, signet jewelers disappointment. back to you, guys. >> bob, thank you very much. the market may be hitting new

highs but it's not a broad based rally. according to s&ps howard, apple, amazon, facebook and google those five stocks accounted for 30% of the year to date gains in the s&p. the top 15 companies in the s&p now account for 50% of the gains. so what happens if some of these big tech stocks start to roll over? joining us is mark travis with intrepid capital funds. and brian, with hennessy funds. what would happen if these big stocks start to roll over? >> well, i think we've seen a transition from the active management in the past the last little while. i think that's part of the driver of this. i think you're seeing more people going into these index funds and people are buying the large companies based on those moves into the passive side. we haven't really seen what would happen if the market kind of turns around and all of these passive strategies are now the momentum starts on the downside. so, it remains to be seen. so far the trade has been hold on to these stocks because they keep doing really well.

>> uh-huh. mark, the optimist would look at this and say, well, the other thing that could happen is we could have a more broad based rally. you could see other stocks start to pick up. other areas sort of start to follow the leader. what do you think is the more likely scenario? a rollover or follow the leader? >> well, becky, i think that if you take your friend mr. buffett, for example, mr. munger, i scarcely doubt they're out searching for companies trading north of 20 times which is where the broad base market is today. just to compound what brian was saying, i think we now have where size trumps value. and the fang stocks f you will, remind me a lot of the late '90s. if you look back at the nasdaq, we've only regained those highs from probably march of 2000 here in the last 12 to 18 months. so, it was a very long time to break even. >> mark, brian sullivan jumping in here. very important point you're making right now. not to be alarmist. people were worried about the

nasdaq in '96 and '97 we had multiple years of gain before it rolled over. the concern i have and we brought it up before is if all the machines are sort of buying the same stocks because their signals are the same and etfs are loading up on the same five or six stocks because that's what they do, to becky's point, what happens if the they all decide they're at 25 times time now to sell? does the home -- if they pulled this up, does the market have to be pulled down by them necessarily? >> brian, do you remember the term that wall street coined in 1987 called portfolio insurance? it was designed to sell futures and you could prevent a loss by continuing to sell futures. that worked really great until it didn't. and october 20th or whatever the date was in '87. i'm old enough to have survived that as well. so, i don't want to be overly skeptical. i think there's a renewed

optimism across america if we reduce tax rates and pretax cash flow goes up, you know, certainly business values are higher. but, what i'm looking for is a disconnect between price and value and very hard to find in this environment. i have a few. but, it's a challenging environment. i think people should be told it's okay to sell and i'm worried that people are piling into these etfs and indexes kind of closer to the top than the bottom if you're in your early 60s you're not going to earn it back. >> we've lived through this. in very recent times. take a look at what happened to the bio tech etf. bio tech looked like it was the only way up, the only way forward was going to be up for that share. then you had people running for the exits on that. could we see a similar sort of situation or is it that -- was that sort of a id owe sin cattic situation for bio tech versus a

broader tech trade? >> i think you could definitely see that mirrored again. the issue that i have is that it's really going to be the retail people who will wind up on the kind of brunt of this because you figure that the pros are going to be on the future's side and are going to be quick to leverage out of it and take the cash that they've had from the gains. so, you know, what happens to the retail investors is they kind of hold on and watch this momentum turn to the downside. and names come out. you know, i think that if i'm looking for an area to shop, i'm looking kind of in that small and mid-cap space that's had money flowing out and that there's still reasonable valuations and look attractive because money is not pushing these stocks higher. >> all right, mark, brian, want to thank you both. it will give us something to think about. >> thank you. >> thanks. all right elsewhere today, does general motors have a vw problem? a lawsuit accusing gm of having so-called defeat devices on some of its diesel pickup trucks which would allow them to fake

out emissions testing? joins us from chicago, phil gives us the details on what gm said about this. >> well, gm basically thinks this is an opportunist lawsuit. these are lawyers who found gm truck owners who have diesel engines who will join in to a class action lawsuit at a time when a lot of people are questioning the validity of the emissions that are coming out of these diesel trucks. not just gm trucks but all diesel vehicles. this lawsuit alleges that there are 705,000, 2011 to 2016 diesel engine pickups built by general motors that have defeat devices in them. we reached out to general motors. the company says these claims are baseless and we will vigorously defend ourselves. the diesel complies with all u.s. epa and carb emission standards. guys, i'm not surprised that we saw this type of a lawsuit being filed, given the fact that you have a number of investigations involving a number of auto

makers in europe. there's this question that's been swirling in the market about whether or not you can trust the emissions of any diesel vehicles ever since the volkswagen case came out and now you have this class action suit against general motors. one final note, guys. i talked with people inside of gm and you can usually get a read from people when you talk with them. the sense they have is you know what, we double checked. we started double checking all of our emissions software once the vw scandal broke in 2014 and 2015 and they're confident that they do not have defeat devices in the software of these diesel engines. >> although, phil, this is very specific. this is very specific. >> you bet. >> it's not to any diesel car that's out there. you can understand how people are very skeptical. >> what i'm saying, becky, if you read the lawsuit and i read the lawsuit, we have a call into the lawyer as well, they claim they have done tests that show that there is defeat devices used in these vehicles. we don't know where those tests were done. we would love to see what those

tests were. if there's some validity behind them, we would love to see what the tests were. >> it's a very buy nar thing, is it not, phil? they either have them and someone found them or they don't. >> you would think. they claim that there are defeat devices there. let's see the tests. let's see what the results are. we should also point out that when you look at this lawsuit, it churns the waters. there's a lot of references to volkswagon and to diesel emissions and the fact that these are vehicles categorically diesel vehicles that are not living up to the advertisements in terms of meeting emission standards, fuel economy, et cetera. so again, we're in a he said/she said period where you have lawyers who are filing this lawsuit, have filed this lawsuit and general motors is pretty adamant here not pretty, very adamant that these vehicles do not have cheat devices. >> it was worth noting that.

phil, let's be clear here, the epa, the doj filed a civil complaint, correct, against chrysler and volkswagen. >> correct. >> they have not investigated gm or are not investigating, correct? >> correct. if that were the case, you know that once the doj gets involved it's a far different story. >> thank you. >> you bet. let's get to the bond market, rick san telly tracking a bond action at the cme. what can you tell us, rick? >> the last option seven-year notes 28 billion completing 88 billion in coupon supply ran off 2.06 yield at the dutch auction. pretty much where the issue market was almost exactly. the bid to cover very close to 10 auction average of 2.54, 61.2 lightest since september of '16 on indirects, but the directs at 17.2, the second best number going all the way back to the summer of '14. c-plus, charlie plus, not a bad

auction, but pails in comparison to the a and a minus of the two year and five-year that we had the last two days. market hasn't moved much, but then again holiday weekend coming up. supply out of the way. melissa lee, back to you. >> thank you very much, rick. no stock was amazon harder than best buy, but that stock is up big today and nearly doubled in the past 52 weeks. is the retail world big enough for eboth of them and the s&p 500 headed to another record close. we'll talk more about the markets and this record run. "power lunch" will be right back. >> announcer: "the bond report" is sponsored by -- pimco. can see in your blind spot. [ dinosaur roars ] onboard cameras and radar can detect danger all around you. driver assist systems can pull you back into your lane, if drifting. bye chief. bye bobby. and will even help you brake, if necessary. it makes driving less of a production.

lease the gle 350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. prone jar shatterst livthe competition.pe? olay regenerist hydrates skin better than creams costing over $100, $200, and even $400. fact check this ad in good housekeeping. olay. ageless.

welcome back to "power lunch," everybody. the s&p 500 is on pace for its sixth-straight day of gains and hitting a record intraday high today. best buy is the top performer in that index today. courtney reagan joins us now with more on that. courtney? w. hi, good to see you. not only is best buy the best performing stock on the s&p, shares are hitting all-time highs today. the charts are pretty impressive. logging the best day since august 2016. actually gained more than 19% that day. more or less the last consumer electronics retailer still standing blowing past wall streets estimates for profit and soaring past revenue and comparable sales estimates. reporting a comp gain when a decrease was expected. online comps also grew 22.5%. amazon who? how did best buy buck this dire

retail trend? with a call with media, consumers did buy more higher priced computers particularly laptops spent on mobile devices, connected home and gaming. now gaming is in part thanks to the nintendo switch console released in march. also says tax refund delays did hurt more than its ever seen before in february, which is why best buy's expectations for sales were lower going into this quarter, but ultimately when consumers got the refunds they spent them at best buy. appliances sold while too. that helped profit margin. that was even as hg greg and sears were holding liquidation sales. sears did post a smaller than expected loss and comp sales declined but base on a couple analysts estimates to be fair and most think sit a slow spiral to the end. >> there's two things about best buy that came to mind when the numbers came out, which is we

talked about this housing. right? you look at retail seems to be two things, buy fur indicated. anything related to housing, home depot, best buy, new house, new tv, don't do that. and gaming. the nintendo switch was hot. >> i was shocked to see that in the release this morning. >> target said the same thing apparently. but also just if you play league of legends and some of these games, they're ram heavy. >> they are. >> i actually bought a dell desktop. >> so you can play games? >> it's a simulator. >> you nerd. >> but it's also true -- >> wait a minute. i want to be clear because becky is calling me out. it's called iracing. it's a racing sim mulator, it's not a game. >> i take that back. you're not a nerd. >> that makes it better. >> you actually also need high powered computers pcs for a lot of the vr, the virtual reality headsets. those are very high spending sort of items, you also have to have a really high powered computer. and for a number of years there

were these electronics retailers putting out low priced computers to compete with the google chrome, folks realized there's not a ton you can do with that besides just very, very basic computing. and so now they moved in and -- now we have to buy that higher powered desktop or laptop because that didn't do the trick for us. >> courtney -- >> it's not a game. we'll call it what we like to and you call it what you want, brian. >> thank you, courtney. >> help? >> so the stock is up close to 40% best buy that is. this year at over 80% in the last 12 months. too late to jump in? let's bring in david shik who has a buy rating on the stock. your price target is 56. the stock is at 60. now what? wenchts moved it up already today. >> to what? >> 65. we've been overweight the stock for over a year frankly longer than that, but it's really about the two things, the product cycle which you were just talking about but also the lessons that best buy learned, three to five years ago.

i think before we started talking, you were talking on air about being amazon. best buy had to think about closing stores. they had to learn that skill. they had to think about being on the channel and then go back to the vendors and credit something different. they've done that and the product cycle is really impacting the business. >> we're seeing a 21% pop in the stock. granted there is a 13% short interest. so part could be a short squeeze. how replicatable if you will are these earnings results given that switch is a big pop. is this a lumpiness in the earnings because the product favor work in their favor? >> there's always a volatility to a product that may impact a quarter. switch just started. it's impacting the business. that's a good thing. we'll hear more about gaming. we think our gaming analyst thinks there could be some interesting announcements coming out in june around back half of the year new gaming consoles. we'll see.

there's also vr and a.r. around that. you have smart home. there's more of a product cycle than just switch. >> right. you take a look at the price to earnings, price of sales, price to book, you need sales on the five-year basis. they're all at highs. does the stock deserve that sort of valuation at this point? >> well, you have to look at how it's valued relative to its cash flows. and versus peers. so if you go back a few years ago, not long ago, best buy traded about two to three times cash flow retail trade at that point at maybe nine. best buy is getting towards 7 today. retail is getting towards 7 1/2. i would argue, we are arguing, we continue to argue, best buy has become a better than average company in arguably a better than average portion of retail. again, they had to learn how to close stores, become omni channel and it's working. return on capital is going up. now it's sort of above average top line story and lot of fear out there about retail. put all that together and you get what happened today. >> david, good to see you.

thanks for your time. check out amazon meantime got within a buck, one dollar of hitting $1,000. 999. the fresh record high on shares of amazon. we'll watch this very closely. oh so close. >> and yet so far. brian continues to try to convince me that this is not a game, that this is for real. he is showing me video of him driving -- >> just makes it less convincing. >> it's fine. >> the only difference between men are boys are the size of their toys. so this is a toy. >> that's the best line ever. coming up, more business news. not a game. >> it's a toy. >> we're back after this. hey, i've got the trend analysis. hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits.

my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.

we are keeping an eye on shares of amazon as we mentioned before, 999 was as high as it went, at least today. that was the record high. so we're just right now about a buck 25 away from the milestone it is trading 998. so close. >> we think when it happens we will have some kind of graphic or animation to signify the event. >> we better. >> you think so? >> at this point. >> random guests. sticking with amazon, it has been blamed for the demise of the neighborhood bookstore after it drove millions to buy books online. so of course what is amazon doing now? it's opening up an actual real

life bookstore in new york. morgan, is it crowded? >> hey, brian. it actually is. i'm not so sure you can see past this glass but on the other side of the glass, there's a line because the store continues to hit full capacity. it has been very busy. this is the first brand new bookstore from amazon in new york. one of two locations planned. the seventh location for amazon in the u.s. right now and as you might expect, this represents the ecommerce giant's technological take on the brick and mortar experience. here is what i mean by this. all these displays are data driven. this is based on online ratings and reviews. if you look over there, past the group of people that's page turners, that's based on kindle user data. also notable is the fact that all of these books that are on display, they're all front facing for easier exploration significantly less inventory in the store. also worth noting, publishers have prices on the back of these books, but if you want to know

what amazon is charging you need to use the amazon app and unsurprisingly, prime members tend to enjoy discounts in the store. so, the store opened earlier today. it's been very busy. a lot of foot traffic here. but how have actual shoppers and consumers been reacting to this? we caught up with a few. >> my thoughts it's kind of amazing to see amazon doing it. i just wonder what they're going to do beyond books. >> i'm a prime member and i love bookstores. and there aren't enough of them anymore in the city. >> i am going to buy books today. >> so one of the biggest take aways perhaps from folks that i have spoken with that have been shopping here today, they're excited to have an actual brick and mortar bookstore because both the borders located in this same shopping complex and the barnes & noble located up the street closed in recent years closed in part because of the rise of amazon. guys?

>> morgan, thank you. morgan brennan. we were talking to a company that is getting in on the digital currency craze with the new coin. it is a messaging app. we'll look at the s&p sector heat map. going to take a look at that? we don't have that. "power lunch" is back in two minutes. that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise we rbut we are not victims.ack. we are survivors. we are survivors. we are survivors. and now we take brilinta. for people who've been hospitalized for a heart attack. we take brilinta with a baby aspirin. no more than one hundred milligrams...

...as it affects how well brilinta works. brilinta helps keep platelets from sticking together and forming a clot. in a clinical study brilinta worked better than plavix®. brilinta reduced the chance of another heart attack. or dying from one. don't stop taking brilinta without talking to your doctor,... ...since stopping it too soon increases your risk of clots in your stent,... ...heart attack, stroke, and even death. brilinta may cause bruising or bleeding more easily,... ...or serious, sometimes fatal bleeding. don't take brilinta if you have bleeding, like stomach ulcers,... ...a history of bleeding in the brain, or severe liver problems. slow heart rhythm has been reported. tell your doctor about bleeding,... ...new or unexpected shortness of breath, any planned surgery, and all medicines you take. if you recently had a heart attack, ask your doctor about brilinta. my heart is worth brilinta. if you can't afford your medication, astrazeneca... ...may be able to help.

a used car,

♪ hi, everybody i'm sue herrera. here is your cnbc news update this hour. greek police reporting that former prime minister has been wounded in a car explosion in athens. authorities say he has non-life threatening injuries. two other people in the car were also wounded and they are in stable condition. british authorities livid over leaks from the manchester attack. criticizing "the new york times" for publishing details relating to that bombing. president trump asking the justice department to investigate. manchester mayor saying it was arrogant and disrespectful to publish the information. >> the principle always got to be that the authorities leading the investigation control the release of the information. so as not to compromise it. but the americans it would seem don't respect that, you know. it is wrong. it is arrogant. it is disrespectful.

>> former senator joe loeberman is taking himself out of the running for fbi director. he was once considered rather the leading contender for the job. he works at the same law firm as mark cass wits who president trump retained earlier this week to represent him in the probe of the russia's alleged meddling in the 2016 election. that's the news update this hour. i'll send it back over to you guys. >> sue, thank you vur much. we'll check on the markets right now with another record-breaking day with the nasdaq and s&p 500 hitting all-time highs. looks like the dow is up by about 63 points. the s&p 500 up to close to 10 points and the nasdaq up by another 42 points. the big tech names continue to outperform here. netflix, google, ebay and amazon all at life time highs. and the defense names continue their big rally today as well. general dynamics, lockheed martin and northrop at new highs. you can see advanced auto parts, signet jewelers and acuity brands hitting multi-year lows.

let's get over to dominic who has a market flash for us. >> becky small cap stocks not jumping in on the bullish action. the russell 2,000 fractionally negative in mid-day trading. year to date small caps underperforming up 2% versus the s&p 5008% gain. >> thank you, dom. stocks are rocking there are concerns about the u.s. economy leading some firms to pull back their expectations for second quarter gdp. steve? >> melissa, thanks. we traded daily reporting still leave forecasters thinking second quarter will rebound. look at what happened to the cnbc rapid update the median of seven tracking forecast on the street today. q1 gdp at 0 .9. now it's down .4 after today's data, a big hit down to just 3% right now with a large range still of 2 to 3.7% because we don't have a lot of the data in.

here pick out your favorite economist and go with it. mark is high on the streak right now, 3.7%. morgan stanley 3.2 and goldman sachs 2.8. trade data can be funny. more imports could be a sign of solid consumption. bar clays was worried that the u.s. is not benefit as much as it thought from better global growth which has been out there. >> they're revising in large part second quarter estimates but expecting first quarter to be revised up, correct? >> a little bit, yes. >> what's the trajectory for this year? >> it's like that seinfeld he loses a friend, gains a friend, what's your average on three and one? it's going to be 2. >> no matter what he does, ends up being 2. >> we're back to two. all of that -- >> i wanted to make sure i wasn't missing anything. >> it ends up being 2%. still real quick, people still

believing in the fed coming in june with their rate hike, 80% probability. if these numbers continue to go down and inflation numbers don't support it, you could have more doubt. >> you're saying the door is more opened based on minutes. >> when they said we want to see evidence of the turn around. 3% is a good number. 2.5 is a good number. people start to doubt a little bit. >> steve, thank you. >> pleasure. we've had -- we're going to do your big news from washington, brian. >> thanks for the great intro, mel. your big news from washington, the congressional budget office coming out with its score for the republicans, american health care act is tracking the reaction in washington. kayla? >> well, brian, you know by now the cbo says 23 million more americans would lose coverage by 2026 under the american health care act, but the deficit would fall by 119 billion dollars if congress enacted that bill. the bill can now be sent to the senate where the score will inform the proposal of senate republicans. many of whom were critical of

the ahca and critical of the report last night and remains today. senator lindsey graham tweeting collapse and replace of obamacare may prove to be the most effective path forward. most cbo estimates are not perfectly accurate, questions about premiums are giving those beyond house leadership some pause. premiums would fall 4 to 20% for most of the population because more young people participate or because plans would offer less coverage. they found many with pre-existing conditions would be priced out of the market if coverage was offered to them at all. speaker paul ryan says it's still better than the current law. >> we want everybody who doesn't get health care from either medicare or medicaid or from their job, it's about 11% of americans, we want them too to get access to affordable health care. we think the smart way to do this is don't force young families to overpay for their health insurance because we're finding out they're not. they won't just buy it. >> republicans now appear to be somewhere between a rock and a

hard place. the rock being that they want the plan to cost less, the hard place being that they also want the consumer to pay less money in premiums. and those two things, guys, are going to continue to prove hard to balance. >> kayla, thank you. new report out on the biggest issues in health dare. we'll speak to the man who helped put it together. but first we'll explain the study. >> thank you. it's a time of uncertainty in health care as kayla was just telling us from reform to a president who said the pharmaceutical industry is getting away with murder when it comes to drug pricing. so investment bank conducted a survey surveying 300 c suite investors, technology, diagnostics and health care services to provide a glimpse into how industry leaders and decision makers are thinking about the future. now what they found, health care leaders expect a major shift in the way we pay for care for a system of value-based pricing model. the top concern, pricing pressure. those pressures are expected to drive a greater need for industry innovation and

potentially investors hope an up tick in nma. welcome, doctor. >> thank you, mega. >> let's start with value based price manager this is one of the things that your report predicted is going to be a big transformation in health care. what does that even mean? >> value based pricing is really an umbrella term we use for any payment mechanism that delivers better care to more people at lower cost. and this is really in the context of the four main themes that you identified tremendous pricing pressure, innovation in the form of new payment mechanisms in science and technology and that value-based care coming a lot sooner than people thought. >> we talk about this a lot with pharmaceutical company ceos who come on. what would that mean in terms of paying for drugs? paying based on how well the drug works for a certain patient, for example? >> exactly. you can think of drug companies getting reimbursed based on how the drug effects patients. getting paid more if the drug is

effective based on its indications and perhaps a little bit less if it's not. >> and in terms of nma, i talk with a lot of biotech investors who are waiting for this to come, we haven't seen a ton of it this year although you were involved in one of the biggest deals. do you expect to see an up tick there? what do you hear from leaders in terms of valuations in that space? >> health care executives and investors say that there's going to be an increase in nma. more than half expect an increase among public companies. two thirds for private companies. and more than 75% expect more collaborations and alliances. >> i don't know if there has been one industry that's undergone more change both governmentally and fundamentally and politically than healthcare. and so when you're looking at deals and go into the board rooms, do the ceos know what's going to happen in five to ten years? without visibility, i'm not sure what a company has. >> it's going to happen in two

years. >> two months. >> yeah. >> indeed. i think this is exactly why we did the study. there's certainly a lot of change in health care. we see the changes in washington. it's the golden age of biology. we see really an analog to digital revolution amongst technology. what we really sought to do was to understand how health care leaders see the challenges, see the opportunities and therefore see through all the change in washington to decide on how they're going to deliver better health care to patients. >> so if you say it's a golden age of biology, a nice turn of phrase, could that be impacted or retarded by policy that could be put in place? could we see cut back in research and development or we see pressure in pricing. would that prevent companies from looking the next new drug, the smaller companies from finding the larger company that will then supply them the cash flow needed to develop the drugsome. >> i think those are all really good points. the pricing pressure is placing

a premium is on precisely innovation. drugs to have a better effect on patients on a lower cost. we found there was a tremendous focus on oncology innovation, central nervous system orrer inology innovation and some of the early stage disruptive technologies that the health care leaders focussed on was gene therapy and therapeutic vaccines. >> in term of paying for innovation, right now it seems with every new cancer drug that gets introduced regardless of the magnitude of benefit, they get priced at more than $100,000 a year. is that going to change noticeably in the near-term do you think? >> i think the respondents the leaders in health care particularly pharmaceutical investors and executives were most concerns about pricing pressure. so i think the expectation is that that pressure will be quite high in the pharmaceutical space and so discovering medicines that can really make a difference to patient's lives and benefit society will be a tremendous focus. >> thank you so much for being

here. >> thank you for having me. big coin has been a hot topic, but in the last couple minutes that is not the case. bitcoin prices are down. 100 bucks right now, which at the current price is just over 4%. but this is all happening, guys, in about the last ten to 15 minutes for bitcoin. bitcoin record run at least temporarily coming to an end in a big way. i'm sure we'll give you more in bitcoin as we know more. it's happening realtime. >> that's weird. >> yeah. i was looking at it -- this intraday stuff here, becky. you can't see it on my skin. it was boom, boom, boom. three legs down in about eight to ten minutes. >> part of the reason it's run up so much is the cyber terrorism where they're asking people to pay in cyber monetary pieces like this. that's why it ran up so much in recent days. >> thanks. we had the best team in the business. this is an intraday chart of bitcoin, two-day chart. you can see on the right side, melissa, pretty quick turn. >> the biggest force in the

bitcoin trade of late has been japanese regulators opening up bitcoin on foreign exchange. there's one point where 50% of the bitcoin volume was out of japan. so that was a huge factor in this recent push higher in bitcoin. >> you wonder if that also has to do with the japanese government liberalizing or legalizing gambling. there's no gambling allowed in japan at all except for the parlors where you convert points to things. >> two separate issues but i get that because historically japan has been -- they love to trade currencies. you read way back when, the past ten years, housewives trading. >> way back yen. but can i ask you a question, melissa, is bitcoin a currency or asset? everyone says it's a krip toe currency. i want disagree. how can -- because currency can't move like this. i would say it's more like -- >> why can't a currency move

like that? >> real estate, something else that accumulates in value. >> it could do the downside. the venezuelan dollar the ruble. from an upside perspective, if you've got to trance act -- i owe you 100 bucks, why would i pay you in bitcoin. >> it's like a battering system. >> you hold it. you wouldn't want to give up that upside. i would never think to do if i had $100 bill. >> we'll have more on bitcoin straight ahead. also we'll have ceo of the messaging app launching its own currency. >> it will be great. coming up in "street talk" we'll tell you what's going on. we're back after this. >> announcer: this cnbc program is sponsored by payden aind rygel. whether you're after supreme performance... advanced intelligence...

or breathtaking style... there's a c-class just for you. decisions, decisions, decisions. lease the c300 sedan for $399 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

watch out. bad currency puns. time for "street talk." the analysts recommendations of the stocks you need to know

about. >> net app underperform raising 2018 estimates and price target by two bucks to $37 a share. ntap did give cautious guidance. the analysts do believe that operating margins will improve throughout the year and the downside on the stock is limits we're seeing 4% pop today. your second stock is akamai. they are out defending the stock after its recent drop. they call it, quote, deeply undervalued at half the value of comparabl comparables. they note the concern of recent dropoff or slow down in media traffic, but they are 131 country network inside 1,600 carrier networks is, quote, nearly impossible to replicate. add that akamai is over sold on technical level. the target is 90. the stock is at 48 after the recent drop, so nearly a double. third stock advanced auto parts. trimming it by ten bucks by 170. advanced auto is r.j.'s favorite

breakout hope trade in hard line retail. the industry is seeing consistent growth about 2% and there's benign pricing environment to create the opportunity for management to improve earnings over the next five years but some will say, you know what maybe the auto industry has seen its peak and that's why the stock is down so much. the final stock of the day, slightly smaller call e tesaro. >> it's a drug company. >> couldn't be any more opposite than refinery. bio tech massachusetts based. they're focussing on cancer treatments to avoid chemo therapy and do sickness as well as going overovarian cancer. they begin coverage on tesaro very bullish projects for its treatment for ovarian cancer. they think that it will account for most of its revenue. $183 on 17% upside.

becky over to you? >> where did you come up with the music? i love it. >> 1987 cassio keyboard. back to you. when we come back, companies behaving badly. a lot of a lot of examples recently. how is it happening and how do we change the culture. the dow getting down to a full time high today. "power lunch" will be right back. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade.

welcome back to "power lunch." after yant 27% higher than their debut. opened up 63 bucks a share. stock is trading nasdaq under the symbol appn. back over to you guys. well, trust in nearly everything seems to have fawn over the past few years. trust in the government is down, trust in the media and corporate america is down. even foe if you don't care about the stock market, the dissolution trust in business is not a good thing for everybody. this guest says it may be a chance to turn it owner.

toni welcome. it sounds holistic, we're going to hire good people. but with trust every where now you guy haves a proefrlt of many others. how do you find good people? and why does it really party for corporate america? >> good people are people that are wearing celtic screen ware. we may need more than that. i think what's happened as you mentioned, we're at a 17-year all-time low in institutional trust. business, media government and that's shocking. 57% of employees in their jobs in the u.s. today are in different or want to leave. so what has happened? we have defined goodness all long from a competency standpoint. obviously you need to perform your job, that is baseline. as the dean of hard video business school said to me when we were working on the book

we've been so long in teaches competency and short in teaching character and value. we need to go back to that in businesship. >> we've seep a lot of business scandals that have erupted, are those not good people or curl that has gone awry. what happened? >> you think of uber, you they of madoff, every year it seems like it's okay. >> almost every month. >> almost every month. airlines taking people off. it goes tobias of competency over character. at the root of it, the leadership model that's been per sued is leader should be doing two things, winner take all and leaders who create followers. we need leaders who see a more whole lisk of success and leaders who produce other leaders. and ultimately understand, there's a hard truth to these soft matters. of 100 case study we do have a

value christian standpoint. there were 98% of them showed who had the stronger culture and develop people the most had the greater value. >> is it that corporate america has overlooked character and morale deficiencies because the person can get the job done? something comes to mine like steve jobs, does somebody forget the fact he was rusk in treating the competency and those around him because he's so gifted? >> yes. so it's a great -- >> and in your book would you take steve jobs a task for that? >> yeah. being good is really really hard. we have a bias against being good. >> i don't believe that. >> well think about it. think about what behavorial commonist call hyperbodice count. you guys reported amazon just short of about $1,000.

if you put $10,000 in, ten years ago it's worth $140,000. how many people held? how many people do what buffet says of buy low and sell high? it turns out it is psychologically really difficult to do that. >> and you can get rich doing it. you got a lot of companies. >> star bucking and nail salon. >> we'll get you back on. we appreciate it. >> appreciate it. coming up, it's not just the u.s. that have seen big stock rally, some european markets are outperforming the dow and s&p, is overseas a place for your money? impact on the oil trade. next.

♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™.

call now and request this free decision guide. it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide

and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ welcome back. here's the menu for the second hour of power. amazing amazon. stock just $1 away of hitting 1,000 bucks of share. coming up. netflix also continuing its big move. more on that. those two stocks helping the nasdaq hit another all-time high. is there one specific thing

related to that move, which could be a greater risk for the market. we'll talk about it. "power lunch" starts right now. breaking news at washington, d.c. amon javers with more. >> yeah, looks look another set back for the trump administration in terms of another travel ban. the president issued that early this year and then forced by the courts to revise it. looks like he hit another legal snag with the u.s. supreme court in the 4th circuit, keeping the block of trump's travel ban in place. we'll wait for my details of rulings and see where it goes from here. this is something that has frustrated the trump administration throughout the course of the year. they'd like to get this done and in place but they haven't been able to find a way to meet court

approval. back to you. let's check out mover in the market. hpv, dollar general, ulta, dollar tree among the top performers. credit cards with mastercard and visa hitting headlines. let's get to the record breaking rally. all the action being tracked from the new york stock exchange. 24, 17.5 bob. that was our level. >> there you are. this is a break out. you being hearing about the new highs for a couple days, it's widening out. we have a large number of new highs and that's why i'm call g this a break out. historic highs, s&p and nasdaq up six straight days, haven't seen that in a while. take a look at the s&p, i want to remind everybody we were concerned last wednesday, about comey and obstruction of justice

flaying around. then it went away, the president has been stop tweeting and off to europe. city group, among the big bank breaking out right now. deere, lockheed martin, and among others. not everything is quite there yet, it's not just there. look at the sectors, the embassies that are shy of new highs right now. the dow is essentially there about 0.4% off. the mid-cap appear 2% off. this dow transport almost 6% from hoirk highs. so not everything is hitting new highs today. guys back to you. bob thank you very much. one stock that is is amazon and all amazon is doing is making its shareholders money. that stock is up 57,000% since

the ipo. the stock use to be at $1.50. now it's at $997. if you put $10,000 back in amazon in 2007 and rode through the crises and didn't sell you'll have $144,000 right now. three years after its ipo the company launched marketplaces. by 2007 amazon web services began and the kindle came out. amazon has done something more surprising, opening a physical bookstore. the ultimate question is, what is not the next thing but the next next thing. >> and the next next next thing after that. let's bring in victor anthony.

victor why don't we start with you. you are looking for a price target of 59 thouds. what are you betting on if you buy amazon shares? >> well, yes, you're betting herbal essentially that. amazon given the investment weather it'll be fulfillment. you're betting that one, amazon will continue to take market share. i see that continuing for the fore seeable future. number two, you bet that aw s despite the competition from microsoft and google alphabet, that aw s continue to grow at a rapid pace and margins will expand. you're also betting that amazon will take shared advertisement as well. and fourth, you're betting that despite all these heavy i want investments margins will cap to expand into the future. that's what reflective in my evaluation as well as the current stock price today. >> those are a lot of assumptions john, and for years and years that have been doubters from amazon saying they're never going to make a profit, never going to do this.

what do you kind of hear around the street these days, people are doubters on this? there aren't so many doubters watching the stock. >> yeah based on the centra jtr t hard to be a doubter. when that happens when amazon start spending a bunch of money on something then the stock sometimes takes a breather. the one area you'd have to look for that is grocery, amazon fresh, thus far have charged a lot more if their prime got carry. if you want to go grocery it's expensive to role that out. if they start you could see a hit to margins happening there. this bookstore thing it's not a bookstore it's a prime store. this is all about amazon showing here's the full breath you can do with our system. there's music, video, echo and

kindles. yeah they got the books in there but it's not officially about selling books. >> victor, to join's point we have -- john's point there was points in there where you could see some massive infrastructure spending. the last thing where there was talks of amazon coming up with its own fed-ex, ups system. is that something you'd expect to happen and would that concern you if they go ahead and build that? >> i think that's underway already. i think that's the fourth pillar that was talked about. it's clear that's the direction they're heading in. the point i'd make though in the past when the stock sold off on heavy investment cycles amazon hadn't proven themselves but now they have. the investments give them credible. theysy investments lead into sufficient market share. if amazon embarks on another

significant iminvestment cycle which i think they're doing right now, i think investors will give them a pass. on the end of that investment cycle will be significant share game -- >> victor quickly is there any chance amazon gets so big maybe the government come poking around? >> it's always a risk. anti-trust issues for these companies, i think facebook, google is having that issue right now, europe. it's always a risk but i think the mark that amazon is attacking right now, the retail market is massive. you look at aw s, that market is also i think -- i don't believe there's an adjustable market for aw s yet so i think that's a long ways out though. >> victor thank you very much and john good to see you. in 1985 john sue well says go west young man and -- with the country. now it is a time to maybe go

east at least with your money george and janis. no doubt as confused by my weird i want troe george but i think you get the point. listen, america is a great place to investigate if the last seven or eight years, why do you think europe may hold more value now? >> there's a few reason why i think europe's intrigued at the particular time. the first is you're seeing a sustained acceleration in the european economy, something we haven't seen for a long time. part of that is just a function of being a beneficiary improving in the global economy but also a function of improved underlined fundamentals within europe. europe's has strong monetary accommodation for last years but it hasn't had fiscal accommodation. now you're seeing that change. there's truly an underlying

acceleration in european growth and wages and employment that we haven't seen for a long time. really priding strong support. secondly, european companies are more leveled to upside than any other companies we see in the world from a regional perspective. they've operated under weak environments and still able to benefit cash flow. that's what we're see requesting what we saw in the first quarter. >> kind of a back door into america, if you look at the biggest company on the current dash and france, the majority of their revenues from the united states but been for years trading at a discount. the french election is behind us, brexit is sort of behind us, the greek debt crises isn't over but been put on the back pages, do you think most of head-line risk the big picture stuff, george is bind us? >> i do. part of the reason europe has

overperformed than the u.s. by 50% over this decade is due to that political turmoil. we've had issues in greece, spain, italy, france and in the uk obviously. those have kwooied down. we'll have an election on june 8th in the united kingdom that is received to solidify party under theresa may. we got quiet around europe which is something we haven't had for a long time and just that quiet will allow the economic fundamentals to improve and i think allow for, like you said, allow for the european companies to trade in line with your u.s. peers where they've got similar revenue profiles. >> george may recess we'll leave it there and get you back on. george of janis. thank you. in the meantime back in america we're watching what's happening in washington, waiting to see what's happening with the tax plan.

as a result the wealthiest americans trying to wait to pay taxes hoping they'll go down. robin joining us now. >> it's report to believe that the we'll with putting a wait to their paydays. white house budget chief, nick mull via any saying the -- quote coming in slowly than normal. state taxi revenue is down an average of seven% last year. dropped in behavorial responses due to the anticipated tax policy changes, what does that mean? it means the wealthy who pay the bulk of income taxes delayed the sale of assets in hopes of paying a lower tax rart later. kentucky tax rates are down 13%. lawmakers have to deal with $2 billion deficit. california is running about

$1 billion beene the government estimates and new york is running behind $6 million. we saw a reverse of this back in 2013 with what we call the april surprise, that's when the wealthy sold assets and took income quickly to become tax height is part of clip. jumped more than 40% that year before falling the next year. we could see the reverse of that. the unexpected consequences the following year whenever we do get tax cuts if we do we'll see a big jump. in the end it evens out over time but in the short-term but there's a lot of extortion. >> it sort of evens out but by the time we get a tax cut that's -- >> there's less percentage that's right. we could see so much income coming through with tpinned up sales -- i think it is

supportive to the stock markets because you got resistance to sell right now -- >> which means if the tax cut come in the sell out reduce. robert, also with the gain and amazon shares we've seep today what about bezos how close is he to becoming the riff pan in the world? >> he's very close. he's within $5 billion which sounds like a lot, but apps stock needs to get to around 1,$031 for bezos to become the richest man in the world. we're very close, i think within the next couple weeks he'll be the richest man in the world. >> i know that i'm partially insane but i worn if i'm the only person to think it's little bit odd, which is that the two

worldest richest men live within five miles of each other. >> it is. >> if you been out to seattle it's a blooming town. between those two companies and star bucks and the ecosystem around. >> it's interesting though. i don't want to give it away, but on monday or tuesday -- monday's a holiday, we got real estate data coming out, but in seattle things are very good. >> one thing i'd add that's different that microsoft created a number of billionaires and lots of millionaires. amazon as far as i can tell, there are no other billionaires that have been created by amazon and not as many million nars because that stock is very concentrated with jeff bezos. >> i was looking at that earlier today on a system called capital iq where you can look at this, the number two guy in amazon, have like $1 million in stock.

>> yes. you got bezos and then a huge drop. but yeah it's weird they're both in zeal. it's the rain. >> seattle's great. >> the rain makes you want to stay inside and create wealth. >> and babies. >> thank you robert. here's what's coming up on "power lunch" opec spending -- where do prices go from here. get ready to unpack your carry on. the headaches fly and the airline will face. tack a look at this chart, it is rebounding right now as well. volatile trading, what does it all mean and what is bitcoin? we'll explain that next on "power lunch." it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis.

the 2017 e-class. it's everything you need it to be... and more. lease the e300 for $569 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. our 18 year old wase army in an accident.'98. when i call usaa it was that voice asking me, "is your daughter ok?" that's where i felt relief. we're the rivera family, and we will be with usaa for life.

already before the break. melissa told you crude oil is falling, it's surprising given the opec agreed to extend the budget by 9 months. >> price is not the key indicator that we're looking at, we're looking at venuetories and inventories ultimately will drive out indicators, including investment, price, stocks of companies and you know, and operators as well as service companies.

so if we focus on the fundamentals that we can control the mark will move if the right direction. >> what does that mean for global supply and pricing. joining us from that meeting is blake roth man. first off i miss you guys, maybe next meeting i'll pop back over. with all due went, when you say you're looking at supplies and inventories, aren't you also saying your looking at pricing and i've got to imagine that conversation number one in that meeting was probably, oh my gosh, what's happening in america? are they get to hit $10 million a day soon. >> we're concerned by production, the statement is -- they're going to be watching that. for the leaders of their country i do think price issue is very very important. they're set to take a broad view

about the fundamentals driving everything but again they are clearly concerned about the price action. >> mike, you and i spoke a last time and corresponding a few times in between, you're convinced that higher price wills come back the pack. is it hard to make that determination or do you think prices will ultimately begin to creep higher? >> i think khaled's commends will mirror what we say, they're draining oil and in the system they're getting stocks down. if you get stocks down prices will go up. the surprise coming into this meeting is the fact there have been more of a draw on storage and i agree with the same thing he presented, that it should accelerate. so the issue of libya being up is not a big concern, it's kind of where you think it would be at best case, venezuela circling

the draining, niagra has problems, there is a war in iraq which no one is paying attention to. supply is been taken from market t mark six november. to me it looks like it should be enough to spin the value and get us into a lower inventory. >> so health may where do you think the election will go, do we have a natural floor on the oil and what is that floor? >> we see the floor going the last half of the year in the 50st, i think we'll grind higher in the 60s by q-4 and we think this work of the policy priority of both saudi arabia and russia. the deputy crowned princess of

saudi arabia, certainly we think vladimir putin is concerned about keeping the population happy and spending going going into election. political priorities coinciding with wanting to have a better fundamental for oil. i think politics also drives this decision. >> all right guys thanks for your time. >> thank you. coming up the good, bad and ugly in today's trade. i need someone that understands my unique needs. my dell small business advisor has gotten to know our business so well that is feels like he's a part of our team. with one phone call, he sets me up with tailored products and services. and when my advisor is focused on my tech, i can focus on my small business. ♪ ♪

welcome back to "power lunch" today's trade, first the good, shares appears tourj there's up by 6%. on to the bad, hormel foods, down by about 6.3%. the food products affording e pa issues specifically in the turkey industry. it's an ugly day in america blaming increased truck depreciation, those shares down by 8.5%. also down, oil, tumming by 5%. if your planning a summer

vacation get ready for headaches at the airport. we'll explain, stay tuned.

. hi everybody i'm sue herrera, here's your cnbc update at this hour.

house speaker paul ryan calling on montana gop candidate, gianforte to apologize for assaulting a reporter yesterday. during his briefing ryan stressed a physical altercation between two people is never acceptable. >> there is never a call for physical altercation, there's no time a physical altercation should occur with the press or just human beings. so that is wrong and should not have happened. should the gentleman apologize, yes, i think he show apologize. hurricane season begins next week and noah is predicted more storms than normal in the atlantic ocean. it says there's a 70% chance of region seeing between 17 unname stormed in the season. if you're looking for an excuse to have a glass of wine, today is national wine day. some wineries, bars and local shops are offering discounts on their wines to celebrate.

that's the news update. ive a lovely cabernet that dahm let my borrow. >> you got to give it back what's that? >> i'm not saying i'm going to give it back. i said i'd use it as a prop. >> i've been celebrating for 364 days in honor of this day. >> well, keep on going. thanks guys. >> cheers. a check on the markets, the dow and s&p hitting all-time highs. the dow's up by 7 h points. s&p 500 this is two points. the nasdaq is up by about 50 points. all three embassies have erased the losses from that big sell off last week. discretionary staples and technology leading the game today, the russell 2000 not participates in the rally. transition, marathon oil,

falling as crude losses extend -- crude ex lending their losses. very very hell volumes. the oil is closing for today, jackie at the commodity desk. >> we've been seeing this kind -- we haven't seen this volatility in a while. that range wide, 40.75 to $52. this was an opec move, nine month tenextension priced in an enough enough to up set the markets. maybe even higher from here seasonally because we're going to see prices go up from summer driving. for those who say that opec has lost control, i will say this, others are saying opec might have played its hand perfectly. if other conditions remain the same they'll continue to eat into the supply and keep these

prices high. just around 50 is the sweet spot. >> jackie, memorial day is coming up so that's the time we start to hear about gas prices rising for the summer. what can we expect this year? >> it happens every year. triple a saying that less people are going to travel more than 50 miles this weekend. today's average $2.37 for regular. if we hit that near 40 million mark it's the highest we've seen over a decade. the analyst chop it up to this willing tons get out and about. others say gas prices isn't going to keep people from going where they want to go. i'm curious to see after the weekend because the weather is terrible. rain expected all weekend on the east coast. back to you. all right america and the world get ready to unpack your carry-on pga bags, fill lebeau

with that story. >> who would be happy about it if you've got to wait in line -- and by the way this does not apply to tsa pre-check lines if you're in one of the standard lines this is what you might be experiencing. there are lines at lax doing this, boston, lubbock texas and other places. electronics for people in the regular lines will have to be taken out of the bags in addition to what they'd usually take out. this applies to tablets, e readers. the goal, fewer delays at the check points. we reached out to the tsa to discuss this program, they say the tsa officers may also advise travellers to place other carry-on items. let's say you have a bag of fruit or something else inside of your bag that may make it tough for security machine to check what's going on in there. they may make you place that

sprael in a bin. we are excessed quicker and targeted procedures at this administration. this all comes while the trump administration is presenting a budge that may cut grants for police to assist the t s ark at some check points. the spending for the tsa in the current budget has been imposed to increase. take a look a shares at the airline stocks, you may say this may have fewer people flying the thundersto summer, no that's not going to happen. united continental that stock is up 80% in the last year. guys back to you. >> phil thank you very much. to brian's point we may not see fewer people flying but maybe more people screaming about it. joining me is john pistol and former c oh, of united airlines with us, ben. let's start with john, the new

move that is people should be removing thing out of their bag is it necessary? >> well getting to what is seen as a clear and present danger in terms of terrorist attempts to attack aviation. with more challenge wills in terms of the task and oftentimes cluttered bags going through check points makes it difficult for tsa officers to detect what's in those bags, this is an effort in terms of pilot programs to assess is it quicker and more efficient, but more importantly better security to have people take out the larger electronics, and perhaps food items and books, it's difficult to detect what is in there. to have those out, separate from the rest of the carry-on bag. when they go through x-ray and the x-ray is -- that allows

discernment between those different types of objects. the whole purpose is to improve efficiency but more importantly improve security. >> how much of the problem is kind of the fault of the airlines for this for doing things like charging people $50 to check a bag? if you don't have those charges would it be a lotless stuff getting cramped through the security lines? >> well clearly the number of carry-on bags went up several years back when the airlines started the check bag fees. but it comes down to tsa dealing with whatever the current environment is whether it's from risk or threats or is it from how much checked bags going through. again, this is an effort to determine, i believe, what is the best approach given the reality that there are millions and millions of those carry-on

bag that is go through tsa check points every week. >> john thank you very much for joining us. >> you bet. >> for more on this let's bring in ben, he's the former ceo of spirit airlines. ben, how big of a problem will this create at the airports? >> i don't think it's going to create that much of a problem especially if they're good at communication. if you're walking up to the counter and someone says i need your ipad out and it's burr buried in your luggage it's going to slow up the lanes. if their good with that and check with the customers when they come in and make sure the items are there there should be no problem. you remember a while ago you're don't have to take out liquid and people were getting use to that. >> it could take a bit and that could lead to discontent to some of us traveling frequently during the summer, maybe we'll figure some of that out.

the policy ideas of airlines, charging you $50 of checking a bag but if you cram it in the over head you can get it for free. is that here to stay or how much is that? >> it's probably here to stay because t made money for airlines and kept ticket prices down and kept more people flying because people carry fewer bags because of that. there's airlines, spirits, frontier and aleejt, a lot of theme charge for a carry-on, and customers don't like that but it balances it out in an economic solution to carry on a bit less. >> weren't you some of the first people that added some of the charges ben? >> spirit was the first one and they got a lot of media attention for that. >> i guess it also worked. on the other hand to becky's point, i don't know if anybody complains like the airline traveller, it's a whole thing in

itself. is there anything the government can do better? the way the tsa check points are set up, did someone who use to open a torture dungeon decide to do this because they don't seem to have any flow or common sense. where's the responsibility and the other side to make it at least somewhat as humane as they can? >> becky you're point is okay, you said some are okay, it's the in consistentsy that's a challenge. >> take your ipad out, leave your ipad in, every airport have a different policy. >> you hear it in all those places. i think president trump right now is talking about potentially in a couple of years, maybe privatizing atc. i don't know when that in and of itself is an answer, but the reality is, is having a more of having somewhat of a profit motivate which generally leads

to better customer service i think would help with the tsa. right now they don't have a good representation as really carrying about the customer, they care about security. >> customer service at the airlines some are good and some are not, depends on where you are. >> that's true but there's training, there's a lot of things but in general i think we all want to be safe, we know tsa tries to keep us safe. one thing i like about this proposal is that it's proactive as oppose to someone tries to light their shoe on fire and you have to take off your shoes. >> that makes us all feel better. ben, thank you very much. let's get to dahm. >> two sessions that are hitting high. you got the consumer record spider that ticker kp. the xlu up seven days in a roe

and the 11 days of the last 12. back over to you. >> all right dahm, great point. everything is up. this has been the hottest trade or one of them lately, nearly doubling since may sitting all-time highs. another hot tried, netflix is rallying again hitting another all-time high. we're going to find out why coming up. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses.

the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years. now i know i'll be able to stick with him. [ male announcer ] with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. so don't wait. call now and request this free decision guide to help you better understand medicare... and which aarp medicare supplement plan might be best for you. there's a wide range to choose from. we love to travel - and there's so much more to see. so we found a plan that can travel with us. anywhere in the country.

[ male announcer ] join the millions of people who have already enrolled in the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. remember, all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is.

netflix surging another 4% today which means, yep, it's another record high. let's talk about it in "trading nation." dennis and rob. rob, you increased your price target today to $195 a share, i think that was up $20 to the priest one. why? >> same rationale we have been using for some time. we're looking at earnings power in 50, 51. we mutt a multiple on that, discounted back by 20% per year. today we roll discount period, two quarter since we set the

last target. >> what's the impact risk. you've had michael on for a while, he's concerned about negative free cash flow. you got a trailing p of 200 and a p of 1200 or so, what's the risk here? >> the fundamentally risk are structural, couple of thing, access to content and control of the pipe. in terms of earnings, it's can they scale up their subscriber base to cover the contents investments and what's left over. in our view, we see it as more than afternoon l opportunity to cap to scale up that contend investment on a global basis and subscriber opportunity sufficiently large? >> denis your take on netflix? >> my take on netflix is i've seen a lot of good investors lose a great amount of money in stocks like netflix and that

usually comes when they short them. there's 100% epe. it's a momentum stock. there's a lot of people in it. i think you can buy the stock, i think rob's right, personally. i think the stock can go higher but if you go out and spend 5%, you can stop yourself at an aunt changed for the rest of the year by buying a put option on netflix and let everyone that short the stock and nay sayers they have to go in and buy it back take the stock higher. if rob's not right it cost you 5% insurance on the stock. >> we're buying travelers insurance why not netflix insurance. guys thank you so much. for more "trading nation" go to our website. >> this has been the hottest trade reernl at the all-time highs almost doubling since may. we'll tell you about it next.

. >> announcer: and now the latest from traiding nation.cnbc.com and more from our sponsor.

it's been a remarkable run for bitcoin, doubling in the last month. we have more on what's behind the gains. >> a wild ride, and despite the pullback, the digital currency is up 450% in the past year. experts say strong demand from asia drives the recent surge. investors still view this as a speculative bet, but block chain capital says the bitcoin community is effective as pitching it as a digital gold, safe haven for people in korea, china, and japan with a lot of financial and political uncertainty. in fact, japan recognized bitcoin as a legal payment method. still a lot of risk. there's no central body regulating the coin, and it's extremely volatile. it's not tangible.

you can't hold it like paper money. bitcoin is effectively living in a virtual world. wallstreet still warming up to the currency. that's why we are seeing the news today. >> higher it goes, the more they warm up. >> gets more buying. >> right. >> thank you. >> yep. kik launched a currency today as bitcoin surged to a new all-time high. what's behind the digital currency boom, and what do you need to know? joining us, ted livingston. great to have you with us. >> great to be here, thank you. >> how does the digital currency fit in the core business of kik, a messaging app? >> so, digital currency allows us to create new ways to monetize a community. i think, historically, you'd build a community and use it to then sell people's attention to advertisers or sell stuff they don't want or need. now this unlocks a new way to monetize a community. you're bringing people together,

a place to create value for each other, transacting in a new, quicker currency, and that, alone, makes a great financial return. >> what exactly are they transacting, and how do you make money by people using this? >> this is something we've been experimenting with since 2014 when we launched kik. there's a lot of ways to earn, watch ads, group chat, sticker, and so there's a lot of ways as a consumer you come in and both earn value and then spend value. how that makes money for kek is we create a new crypto currency. we set aside for us, and as more people have the currency, the value grows such that the value of the holdings grow as well. >> so you have, according to a usage study, this was done may 2016, so could be dated, but aytm market research, 5.8% of internet users use kik, and 39%

use facebook messenger. are you hoping that more people sign on to kik, hey, there's a kin currency, and it's a way of transacting and making money, so, therefore, i do that. 5.8% number would grow. >> this is not just a new way to monetize a community, but it's a a new way to compete. i think the real challenge that ourselves as the top 100 app and other developers face is it's getting increasingly difficult to compete with huge centralized companies. you know, they are the only ones with the necessary scale to monetize advertising, so they get everything away for free. as a developer, you don't have the scale to monetize through advertising, and you live in a world where consumers expect everything for free. this is also a new way to build a new ecosystem where we can use this currency and create a rewards engine to pull in other developers to build great services for consumers. >> like a chicken and egg problem, though, ted, a finite

number of users now, you can kik a certain percentage of those using kin, and because of that, because you're only creating certain amounts of this currency, the trading could be -- i don't know if there's going to be trading on this, but this could be very vom tile currency. seeing in bit coin where it goes up and down in crazy ways issue and right now, bitcoin does the same, but volumes are much, much greater than three years ago. >> i think this was the real thing we tried to prove with kik. could we trade a digital economy, digital currency instead of buying the currency, you could earn it. so every day, millions of people come together and earn the currency. that you create this digital economy, people earn it -- >> you can't transfer the money to dollars, so, therefore, you have to transact. if the community is small, then

your options for using that earned money are limited, correct? am i getting it? >> so, i think the unique thing about kik is we led innovation in the space in 2011, launching in 2014, biggest platforms out there, over 200,000 bahts have been created on kik. millions of users. >> e oh. >> hundreds of thousands of bots, and we'll have a bright system running on top of this p. >> all right, ted, thank you. appreciate it. ted livingston, ceo of kik. >> thank you. check please is next.

(shouting) more power tools. more power suits. (shouting) more power... chords. with customized loyalty programs and data-driven insights, synchrony financial can help bring more... power to your business.

check, please. >> jim cramer talked about this on "squawk on the street', don't under estimate the power of gaming. over the past year, there's best buy selling more computers. it's not just for kids. gaming is a massive multibillion dollar world. >> you got amd up 160%. >> nvidia. >> the suppliers, the parts for the gaming all up. >> gamestop out with earnings after the bell tonight. watching this closely because the stock had a a rough run, down 20% over the last 12 months. tomorrow on "squawk box," speaking with the ceo. >> and we're just talking about this messaging app, kik,

starting its own currency, and early evangelist, brian kelly, fast money trader, talking about risks to the bitcoin rally as we're close to record highs. thank you for watching and thanks to becky for joining us. >> thanks for having me. >> "closing bell" starts right now. ♪ welcome to closing bell, everybody, learning the meaning of cereal, and it's not breakfast. >> no, sirio. >> oh, i'm kelly evans. >> you're catch up. i'm bill griffeth, s&p and nasdaq in record territory. consumer discretionary is popping on the back of strong numbers from sears and especially from best buy. look at that. up 22%. >> keeps floating higher throughout the session.