options future interest rate we think that with low volatility fix has been so low. picks up it's great for savings. >> another one i'm looking at is facebook i don't know if it's right -- >> netflix if it dives in that gap i'll talk about it. >> "power lunch" starts now. thanks, scott. here is what's on your thursday menu, tuning out of tech money pouring out of the big names. we'll tell you where it's going and why one analyst is ignoring it and getting more bullish on amazon. the battle over drug prices. the ceo of al leragain is here and will weigh in. the stock up double digits this year we'll get his prescription for profit. anger in the air which carriers are feeling the most heat? put your trays in the locked up position right now "power lunch" takes off right now. ♪ i want to get away

and welcome to "power lunch. stocks are cutting their earlier losses the dow was down triple digits, but the s&p 500 having its worst day since may 17th tech, materials are leading the declines as you see by nearly three quart oers after percent me slay? >> here is what else is happening at this hour steve scalise undergoing his third surgery after being shot yesterday. he remains in critical condition. the senate stepping up sanctions against iran and russia. the house needs to vote on it. more and more ceos speaking out, urging president trump not to reverse u.s. policy on cuba. the president is set to speak about it tomorrow. more on that story straight ahead. >> all right, thank you very much, melissa. let's kick it off with your stock story of the day and that is the all mighty amazon company in the headlines again as a report surfaces that amazon might be willing to pay up to 9

billion bucks for the messaging app slack. now along with much of tech lately, amazon is down today off about 5% in the past week. despite this, or maybe because of this, your next guest just raised his price target at amazon to 1,100 of 975 per share. let's bring in anthony deically menty. anthony, i imagine if you like amazon, as you obviously do, and the stock is down a couple of percent lately, you must like it a couple of percent more than you did last week? >> i think that's right. i think in this market where you have a little bit of anxiety, some technical rotation, that investors are trying to get a handle on what is amazon worth and it's really one of the more humbling tasks as an analyst to try to tackle that question. so people want to know, is there valuation downside to amazon if it pulls back, 5 or 10%. >> is this anthony, maybe, the hardest stock in your coverage universe to properly value because they don't tell us what they're making on prime or on

all their businesses we just know the big number. >> exactly this is a company that everyone knows they take their profits and reinvest it for future growth so you really have to try to understand what sort of growth rate is the stock demanding at these valuations and because they don't trade on traditional metrics like earnings, for example, you have to look at the addressable markets and say, what are these different segments worth what is aws worth? what is amazon north america worth? what are these other big opportunities like advertising, like medium video? >> how do you get to 1,100 snen. >> so it's going to be too difficult to be hon toast go through all these methodologies here on set, but we've got -- we've developed three different angles of how to approach amazon's valuation if you compare each business to other businesses in their hay day, an example would be comparing amazon to walmart or costco in the '90s and early 2000s and comparing aws to oracle, sap and micro soft and

those multiples when they were at this point in their company's growth cycle, the multiples that the market is putting on amazon's businesses are not too demanding. >> hey, anthony. you know in this environment in which investors are questioning technology specifically and more specifically the thank stocks. is amazon more defensive than the other stocks or given its high valuation, would other stocks like maybe an alphabet be more of a safe haven, quote unquote, would be the complex? >> so that word defensive is interesting to me. is it defensible is a different question from is the stock defensive? >> how is that going to do do you say to investors stick with amazon in particular because it will hold up better than the others or will it suffer the most because it has the highest valuation? >> i think what gives informsers and shareholders comfort is unlike advertising orienting names like the ones you're suggesting, the addressable markets are more than 465 billion addressable market

cloud enterprise and advertising and retail and potentially alexa and ai so when investor looks at the growth opportunity for amazon, they're seeing multiple massive global addressable markets versus another member of the fang who might be focussed on subscription video or advertising and that's what gives people the ability to find amazon's valuation defensible. >> you talked about comparing the multiples of the different segments to other companies during their hay days. >> right. >> but their hay darys ended why do you continue to assign a hay day multiple when that could change and how do you decide when that's going to change >> so, that's really an astute question and clearly when growth rates slows for a company like microsoft, the valuation multiple of the investors pay compresses aws, we look at amazon's current multiple and say what was

microsoft's multiple during a time sort of five years into its business where aws is and we ascribe that multiple to aws clearly microsoft is a slower grower and that's why its valuation multiple today compressed for amazon, we've gone out to 2020, 2022 and we've made that comparison as i described. >> quick question here, anthony. what are the chances amazon splits, do you think >> oh, you know, i think that's a fairly low probability i just -- amazon is a company that's very focussed on customers. >> it split before it split three times during the bubble days. >> yeah. i just don't know. i mean, i just don't know if it's a relevant question, right? you talk about stock split >> yes. >> the stock split is not inherently creating value. >> it makes it a candidate in another index namely the dow. >> yeah. look, i'm a fundamental analyst and that's a technical move that

might be geared towards appealing to a different investor audience. that's probably ten -- that's a very low on the totem pole of what management is focussed on at amazon. >> thank you, anthony. >> thanks for having me. the word of the day on wall street is rotation with technology and this week real estate industrials and utilities, let's bring in the founder and chairman of axiom, guide on global founder and ceo. guys, great to have you with us. i will start off with you. how do you assess what is going on in the markets, in particular that sharp move out of technology that we've been seeing for the past few days now? >> so, there's been a lot of crowding into those names as you know we've accounted for the vast proportion of the move in the index. i think this is a classic case of short-term technicals i don't think anything fundamentally has changed in these names, but market reactions are going to be swift and fairly severe over a very

short term when they quantitative systems and so-called computer-driven systems gang up on these stocks when they make short-term down moves like that. i think that exacerbated the move i think there are reasons for that to happen just purely on the level of price appreciation and the sleracceleration they appreciated this year. >> sean, i've been looking through the notes and looks like you're questioning valuation for most parts of the market you s&p the price to book 100-year average 100-year average is about 2.2, many of the sectors are now well above that. so what are you recommending to investors overall? >> well, yeah. four of the s&p 500 sectors are well over four times price to book and it seems that no one tends to pay attention to that much anymore one of those, of course, is technology although amazon, which was just talked about in the prior segment is in the cyclical sector at 15% almost of that sector so, there is a tremendous

valuation problem in the equities market. >> so you're saying move to cash i mean, what does that mean? how does that educate investors on how they should allocate? >> yeah, i have been raising cash all year. you really have to make a decision on what you think the federal reserve will do with interest rates that's informing the valuation level that the stock market will trade at and if you believe the fed is going at least 2% by the end of next year on fed funds, you have to re-evaluate what you think market multiples should be. >> but you know i see on the list that you sent the price to books and i see industrials and tech are, you know, above 4 when historically the average is 2. i see that financials and energy are below 2. so, that's -- are you buying those because they're trading below the rest of the market >> yeah, i am long financials, although that also requires you to be fairly confident that the long end of the yield curve is going to rise. i do own financials.

i have not stepped into the energies market. i've been out of that. i'm waiting for the next leg down in the oil price probably before i do that which is also a function of where the u.s. dollar goes from here. >> you made an excellent point before the show began. we have the memory of a sand trap two seconds we talk about yesterday and ten minutes ago. you made the point that we talk about how stocks have gone up, up, up, up we forget that last year, last january was the worst start to a year ever, i believe it was, or one of many stock fell 20% in the s&p 500. was that the correction that many seem to be looking for now? >> i think so. i mean, take it a step further, the russell average had an average stock decline of over 32%. s&p was average stock was down 26%. those are bear market type conditions for the average stock. even though the index came down 11% from the high. i think that relieved a lot of pressure remember, the long-term money is really geared toward a couple of

big things 2% nominal rates on the ten-year, 2.1, 2% type gdp growth, no inflation out there that just keeps aloe caters locked in. that keeps money in the market there's nowhere for it to go if the conditions change because we have so much price appreciation and profit taking sets in or there's some type of event that unglues that, that will change the picture. but for now it looks like we're having a normal bout of profit >> we're going to leave it there. shaen johnson and liam dalton, thank you for coming on. we'll get you back on soon thank you. coming up the special counsel starting to investigate president trump now for possible obstruction of justice we have the latest. plus to say april was a bad month for airline customer service would be a huge understatement we'll tell you why ow lchisacinwo minutes.

welcome back a developing story we are watching this hour, special council robert mueller is starting to investigate president trump, for possible of obstruction of justice amon jaifrs live at the white house following this story. >> that's right. reporters tried to ask the president about this at a public event couple hours ago at the white house. he did not take any questions from the reporters who were in the room here is what we know as of right now from nbc news including the fact that the special counsel

robert mueller is investigating possible obstruction of justice by the president himself mueller requested the interviews with the director of national intelligence dan coates, the nsa director mike rogers about their conversations with the president. mueller also wants to interview the former nsa deputy director richard legit regarding a memo he wrote on rogers' conversation with president trump so that's the second official we know who has been taking detailed memos of presidential conversations. coates, rogers and legit all agreed to be interviewed by the special counsel. the president's personal attorney, however, putting out this statement last night when "the washington post" initially broke the news saying the fbi leak of information regarding the president is outrageous, inexcusable and illegal. the president himself going further than that on twitter this morning issuing this statement saying -- they made up a phony collusion with the russian story, found zero proof, so now they go for obstruction of justice on the phony story.

nice second tweet, you are witnessing the single greatest witch hunt in american political history, led by some very bad and conflicted people. #makeamericagreatagain at this point we are expecting an off camera briefing that's not for broadcast from sara huckabee sanders, the deputy press secretary here at the white house. so we won't get anything from the white house on camera today, but we might get a little bit more sense about what the president is thinking about all of this from her although, to date, the white house has been referring every single question about this to the private attorney they simply won't comment until now on any of this russia matter they wouldn't comment to me earlier today when i asked them about the president's tweets, who is it he thinks is bad and conflicted in all this does he think that that applies to robert mueller or not the white house simply not saying at this point, brian. >> all right, thanks so much good run down there. here now to break down the latest developments with the president's agenda, the fed, china, much more, jillian touch, u.s. managing editor of the

financial times. good to have you here. >> great to be here. >> markets seem to be non-plussed with what's going on with president trump, the special prosecutor, et cetera. why do you think that? is. >> markets are fantastically complaisant in my view there's three reasons. firstly, they know that all this talk about impeachment in some ways is premature because it's going to be a political issue, probably not a legal issue, that will probably take some time to play out at the moment the republicans are standing behind the president. secondly, the perception that even if the president is in trouble, the core elements of his agenda are still going through and the markets love that the tax cuts, are repatriation of corporate overseas earnings, infrastructure the third thing issing this i like to call the normalization deviance program it's the idea that actually when you have a situation where an chamber of people have lots of little weird things happening every single day, a point comes

when people just kind of start to take it for granted >> inured. >> inured. normalization of deviance, normalization of tweets, weird things happening we're living in house of cards we can't really get surprised anymore. >> i heard another explanation also which is so if donald trump got impeached, then we have mike pence, who is actually probably better at getting legislation through and may be would be bullish for the markets because you would be more likely to get tax reform. >> you are so right there. because the issue is the markets have rallied on the agenda, not on the man that's the key thing to realize. and the agenda is basically what many investors, many ceos still like i am amazed because i go around talking to a lot of ceos just two weeks ago in washington, they're still drinking the cool aid. they're still really excited. >> jillian, welcome, by the way. >> thank you >> do you believe that the market has rallied on the agenda i would push back a little on that and say the market rallied

for six or seven years after the financial crisis took about a year after for the campaign didn't know what to do we lit early were sitting up here nothing to talk about politics i wonder how much this is confidence -- not taking anything away from the administration, versus just a continuation of things getting better. >> you have the economy steadically improving. you can arguably whether it's growing fast enough or not you also got in many ways the global economy doing quite well as well. you've also got -- and let's not forget a lot of money, cash, stimulus, swirling around the global financial system. yes, the fed came out this week and said it was going to have another 25 basis point hike. but has anyone noticed the bank of japan is pumping huge amounts of support into the system there's a lot of fuel right now, a lot of dry tinder that's being lit around the world that's helping markets, too, for sure. >> it's almost a blessing in disguise in terms of the accomplishment of the trump agenda and the perception of it

still being somewhat on track that they're in the mid-term elections. no matter what happens to president trump, what happens with an investigation, they're still mid-term elections and still the fear of mutual rale distrux if something does not get done. >> unless you think it's an awful like the cartoon, the figure goes off the cliff and pedaling mid-air and look down and plunge that in my mind is a danger right now that something will suddenly cause con stance to crack and everyone will raels just how much they've been taking on trust. >> taken away in china, no body is quite sure why, very little explanati explanation. they want foreign direct investment in china, taking away a key ceo without any explanation is hardly the way to instill confidence that you have rule of law there. >> well, that sounds almost like a bit of a british understatement there it is lousy for confidence let's get it straight there. you know, if you go around and

talk to central bank governors and ceos quietly these days, say, what is the issue that could really shape the global economy and markets going forward, they come back to china over and over again. because so much is resting right now on this belief that china will just keep growing if something ever caused chinese economy to crack and faith in the system to crack that would be terrifying. now, i don't think this is remotely it at all what we had right now is a combination of pattern of the chinese authorities clamping down on key political figures, key ceos that's partly because the pry mere is trying to assert his power and there is an issue of them trying to clean up the financial market. >> i wonder, jillian, the story to me also is just almost an allegory for a lot of other things because when the -- first off, for our viewers, on bang was a tiny car insurer who bought the waldorf mistor yan

manhattan, the fate of that place is up for grabs. then made a $12 billion bid for starwood hotels trumped by marriott, and the day that that bid was announced i called on bang nobody answered the phone. i called on bang in china, no one answered -- >> what time was it? >> i was hosting 'squawk box" 7:00 p.m. something like that nobody answered the phone. their headquarters is above an auto body shop in some suburban office park. the guy is married to the granddaughter of the former premier. nobody questioned how they were making a $12 billion bid for anybody. >> you know what this reminds me of i used to work in tokyo. the first book i wrote was about the rise and fall of japan you had exactly the same kind of pattern where you had people coming out of nowhere suddenly creating vast global real estate empires going around grabbing up u.s. hotels. the four seasons in manhattan used to be owned by -- >> just to connect the dots.

you're making the comparison here in terms of the rise and fall of japan and what's going on in china. >> i think that's absolutely the comparison the key point is this that china is growing very rapidly on the back of free credit, cheap credit, essentially that's meant you have people coming up and taking advantage now, i spoke to some senior chinese officials earlier this week about this. what they said is listen, the west should be celebrating because it shows that we're applying the rule of law and we're trying to clean up the system the problem is, though, it's so opaque no one can tell if they're actually cracking down on genuine criminals, people who should be taken aside or whether it's going to catch anybody that goes into china right now. >> and whether it's just political, right >> exactly that's the issue. >> always great to have you, jillian. >> great to be here. all right. technology is changing the way people experience live events. next a look at one venue that's adms called the tesla of sports stiu we'll take you for a tour. cannot miss this stay tuned

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>> announcer: disrupting events is sponsored by nasdaq ignite your ambition welcome back have you noticed that everything seems to be getting smarter, at least technologically? that includes stadiums, which is also changing the way we experience live events julia is live in los angeles with more. julia? >> reporter: hey, michelle i'm here at the stub hub center in carson, california. they've installed new jumbotron

and these new l.e.d. ribbon boards it's all about them trying to get ready for the nfl chargers starting to play here in the fall now, some stadiums are taking it all to another level the new sacramento kings golden 1 center is integrating all sorts of new technology. they have roving security robots, bik data analysis to maximize ticketing and streamline traffic, plus an app that puts control in consumer's hands. >> the phone becomes your remote control. so now everything can be done through that remote. whether it's ordering food, connecting with friends, adjusting the temperature, even if your kid drops a hot dog we'll get you a new hot dog before your kid starts crying. >> now, that golden 1 center is leading a nationwide trend cloud startups venue next and built.io create custom mobile apps to control the instadium experience for those who can't make it to an event, next vr live streams

concerts and games through partnerships with live nation and the nba. i watched the nba finals from right behind the hoop. >> less than 5% of nba fans can actually attend the game, with vr, anybody can attend a game anywhere in the world. think there are over 300 million nba fans in china, which most of those will never be able to attend a game. this gives incredible reach for the live experience and the markets where it otherwise wouldn't have it >> reporter: so do live streamed games and concerts and v threaten the business and take sales from venues like this one? no, he thinks it might actually boost sales if people have just live streamed convert vr when their favorite artist comes in town, they might be more inclined to go by and see them in person. guys, back over to you. >> julia is a chargers fan thank you. it will be tough for them to win smart stadium or not. if you thought that

234r50iing is a total nightmare, you're right here is proof. new data shows customer complaints spiked 70% in april cancelled flights and delayed flights causing the most outrage. spirit airlines had the highest rate of complaints the serge came in the same month when the entire world got to see the video the passenger being flagged off the united flight. check this out video from tuesday at where else newark airport a united flight traveling to venice, italy, had to return to the gate because of that a massive fuel leak. fuel poring from the wing of the aircraft guess what, a passenger on the plane noticed the leak and reported it to the flight crew who may not have known joining us now is seth caplin, airline weekly guy as united guy and newark guy, will be on the train when i can. i understand complaints go up in the summer and spring. more people travel people not used to traveling

travel but are things really getting worse and worse as more people pack the airports? >> it's probably mostly, brian, a case of people being more sensitive to some of the same things that always go on i mean, look some really bad things have happened that all -- the video you showed that really happened you know, dr. doa really got dragged off the plane. then there were some other things that actually less sensational but impacted more people in april, everybody forgets about this now, but delta had this massive storm in atlanta. that wasn't their fault. but then they kind of botched the recovery and had 4,000 flights cancelled. so that really did impact lots and lots of people so some combination of things really being worse for some people and then just kind of us all being more sensitive to some of the same things that were always happening. >> seth, how much will the upgradinged a modernization of air traffic control solve some of these issues? we're just getting comments being made by the airline oscar

mun ez ceo praising elaine chao for privatization. it's not the simplest thing but it will create a level of certainty in terms of the modernization actually happening. could this solve a lot of problems for the airlines? >> yeah. munoz ceo of united believes that so does doug parker ceo of american delta actually on the other side of this. look, to some degree, yeah, it will get better, but there's wide range of disagreement about how much better it will get because, you know, on one hand you have these improvements more people than ever flying and so you're sort of running hard just to stay in place sometimes but, if they can get it right, yeah you know, this situation right now where you fly lots of extra miles for example to get to the same place because of old infrastructure, something they can do at least something about. >> seth, thank you >> thank you let's take a check on the bio teches right now the etf that tracks the ibf taking hit

reports of president trump preparing an executive order on drug prices. what could that mean for the pharma industry. th'sexn,k the ceo of allerge at nt. [vo] when it comes to investing, looking from a fresh perspective can make all the difference.

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♪ hi, everybody i'm sue herrera with your cnbc news update for this hour british prime minister theresa may visiting the apartment complex devastated by a devastating fire he promised her government will make every effort to make sure people left homeless are rehoused nearby. >> right now people want answers and it's absolutely right. and that's why i am today ordering a full public inquiry into this disaster we need to know what happened. we need to know -- have an explanation of this. we owe that to the families. nike says it wants to be more nimble and sell more shoes directly to customers online

as part of a restructuring, it plans to cut about 1,400 jobs. it will also reduce the number of sneaker styles by 25% we're going to have more on that story in the next hour of "power lunch. and a blimp has fallen out of the sky and crashed near the u.s. open in wisconsin eyewitness on twitter say that the blimp caught fire before it crashed. the pilot parachuted out of the blimp. his status is uncertain. but the company that owns the blimp believes that he is a live pretty dramatic stuff. that's the news update at this hour brian, back to you. >> sue, in fact, as you were reading that, my producer said that the pilot is okay. >> excellent. >> but he's going to the hospital i don't know if it's precautionary or minor injuries. the life flight helicopter did land, but apparently the injuries were not that severe, so he is at the hospital that's what we learned. >> that's good news. when you saw him parachuting out, you know, you just never know you never know. >> the breaking news in this story is that blimp pilots carry

parachutes which is solid. >> i never knew that and never expected to see a blimp fall out of the sky there you have it. >> let's take a check on the markets right now. the dow had been down triple digits earlier today before bouncing back and right now we're looking at losses about 27 points on the dow. the nasdaq is down by 47 points another tough day for technology with a lot of big sort of bang toks plus apple taking a hit once again look at shares of matell sinking. that was one of tim seymore stock draft pick so we'll see how he's doing. let's head out to dom chew who has a look at the retailers many of which getting hit today. >> let's talk about the retail landscape. sue was talking about the nike job cuts all plays into this whole retail theme the consumer discretionary eft off by three quarters of one percent. look at the some of the stocks within there that we want to note here, there are sporting goods stocks to keep an eye on

because of that nike news. under armour, down by 4% right now. foot locker down by 2.5% and finish line both of the retailers of the shoe products down by 2% it's also carrying through to the discount retailers some guys taking big hits. target shares down by 4% dollar general down by 4% and walmart shares a dow component off by 1 1/3%. it's seen a bid off the lows the dow has gotten traction here, michelle, walmart shares are helping the cause off the lows as well back over to you. >> thanks, dom reports out the last half hour that the trump administration the getting ready toish shup an executive order aimed at lowering drug prices the news comes as ceos of the biggest companies are meeting today in minneapolis meg is there live with the the ceo of el ler general. >> thank you so much brent, thank you for joining us. >> thanks for having me, meg. >> we were just talking about this report out of a potential executive order coming on drug

pricing. we've heard whispers about this for a while. what's your understanding or expectation of what that might encompass. >> we've been hearing the rumors as well. i think there's some substantive proposals that seem to be moving their way into the dialogue that could be helpful one thing that we hear is on the table for an executive order is directive by the trump administration to move towards value-based contracting for pharmaceutical purchasing. i think that is a good, positive constructive outcome for the industry and for patients. the second thing we hear that's on the table is more transparency around the rebates, the industry pays and perhaps even making those rebates be applied directly to lowering drug prices versus today mostly goes to lowering premiums. so a better correlation. other issues that have been discussed that seem less likely to be part of the conversation may be further negotiations of drug prices by perhaps medicare part b versus d which is

negotiated already and then there's always in the backdrop the idea of preimportation from foreign countries, which practically is very difficult and dangerous to do. >> on the second point you mentioned the idea about forcing rebaits to be applied directly to the drugs which they were given on rather than spread across a pool of covered people, that seems like it would target pharmacy benefit managers and the payer side more than the pharmaceutical side. >> well, i think it could. i think the reality is today we hypothetically say we sell a drug for $7 is the price after rebait, but the list price is $10. if the patient comes into the pharmacy to pick up that drug, and they have to pay the co-pay off the $10 versus the 7 or they have to pay for the whole drug which is the 10 versus the 7, there's a real direct effect whether they paid a lower premium for their insurance through their employer or the like, is really hard to touch and feel and so the connection we pay

those rebeats to lower the cost of drugs having them lower the cost of drugs is a good thing and will ultimately lead to a more clear and transparent system for drugs. because it is pretty complex today. >> it certainly is. >> and maybe unnecessarily. >> a question back in the studio >> hey, brant, it's melissa lee back at cnbc headquarters. thanks for coming on just to follow up on the drug pricing issue you came out pretty early on compared to your peers with your own social contract, do you think that immunizing allergen to some extent to what may come in terms of drug pricing? >> yeah, melissa i think we are i think the best positioned bio pharmaceutical company to deal with a perhaps tougher or different pricing environment. we have great diversity and already price our medicines i think very fairly. we don't take big price increases and we have an acetics business which is cash pay which is outside the entire

conversation and probably our fastest part so, yes, we could have some impact but also the best positioned bio pharmaceutical company. >> of course some of your peers like pfizer recent report saying 90 drugs they raised prices by 20%. do you feel like the rest of the industry is stepping up to the plate in terms of trying to make sure that pressure doesn't come from the government instead? >> yeah. i think that's an issue. we have seen companies start to be i think a lot more responsible and a lot more focussed on finding the right equal lib bree yum between pricing and access and the ability to invest in innovation for cures and treatments of new diseases where they set that equilibrium is different they set that point i think more towards access and affordability. other companies perhaps less so. it would be nice to see people move more to the left than to the right on that issue. >> unfortunately we did not get to talk about botox today.

that will be on the docket next time thank you for joining us. >> thank you for having me. >> thank you, meg and brent saunders still ahead, one company's chance to convince a panel of judges that they are the next big thing and they get just60 seconds to make their pitch. today it's all about boxed wine will the panel buy it? find out next. but first to rick santelli for today's bond report. hey, rick. >> hi. and there's a bit of action in the treasury complex look at two-day of tens, very interesting formation. yes, deals come back they haven't garnered all of what they lost, but it's an interesting turn here is the two charts i really like, two-day chart of the dollar index and one day chart of the dollar index. yesterday's formation that kind of capital u skyrocket listen, we're probably early big thing about technical analysis is be patient but this rally may have some legs, at least according to traders and probably be worthwhile to pay attention to given how highly correlated in

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time now for today's power pitch. one entrepreneur says her boxed wine is the next big thing take a look. >> i'm marry ann lightener waldman and the ceo of the archer bruce wines the premium boxed wine segment is currently valued at 400 million but projected to hit 1 billion by 2020. before you turn up your nose at the notion of boxed wine, think about this, bottles of wine stay good for only two days after opening and you're paying more for the shipping and packaging than the wine inside the bottle. this is fundamentally the dynamics that we seek to change. we partner with high end winery

to produce dangerous delicious sustainable produced wines that normally retail for $20 a bottle and deliver for $7 a bottle in box or keg the fact is that our consumers love us. not only are we good for six weeks after opening, but we're more environment tally friendly. we sold 1,200 cases in the first ten months we've been on the market in the new york we're now expanding to additional states and just been nominated best buy by wine enthusiast magazine. crack up a box of our wine and pore yourself a glass. >> you saw marry ann's pitch now let's meet the panel joining us on set is alyssa, and kelly and david, wine and beverage director of benchmark restaurants. marry ann is in the hot seat first question to you, alyssa. >> talk to me about what you're doing to educate consumers and get them over the stigma of drinking boxed wine. >> the most important and most effective outreach strategy is actually demos and allowing people to try the wine so we trained a team of brand

ambassadors to basically run three to four demos a week so that people can go out and try the wine for themselves and see the quality of wine there. >> kelly >> so when you're selling to wine stores, do they have space on their shelves for more boxed wines? are they open to that? >> when i think about retailers, first of all, they're keeping an eye on what's happening in the market as the box wine segment continues to grow, they're actually looking to expand their selection and they're often even open to moving it to different parts of the store >> david >> did you envision this being sold in restaurants by the glass and although the packaging is a lot of fun, sleeker for the back bar? >> we offer a very sleek container you can take off the bag from inside the box. it's very easy to put in and it helps temperature control the wine itself and it can sit back of the bar and blends in with the espresso machine the wine stays good for up to six weeks. but you're able to decrease your wastage and increase your margin >> kelly >> what's your strategy with shipping >> we actually shoop in 24,000

liter flexi tanks which essentially cuts our shipping costs by 70% and so we're able to then ship that into new york harbor and then truck the wine to up state new york where it is packaged and ready for distribution shipping in bulk as well as the packaging allows us to deliver such incredible savings to the consumer. >> david, what's the star? what's really shining? >> if i was to say which wine sold the most, sauvignon-blanc it's an grape you don't expect that. >> we heard that mary ann had to say. now we want to know if the panel is in or out alyssa >> i think they figured out a really compelling proposition and that is specifically around price, longevity and echo friendliness i like the idea of card. i'm going in. >> kelly >> it sounds like they're doing all the ground work that's necessary in a very competitive

market and they've got great plans down the road. really like what i see in the team that's leading it so i'm in >> all right two ins. david, clean sweep >> the thought process of expanding that portfolio i thins david. >> that suggestment is something you should not ignore, absolutely to big and i can definitely picture myself grabbing a box for the summer so i'm in >> marian what's your reaction >> i'm overwhelmed and excited you guys are joining our boxed resolution >> that is today's pour pitch. >> are you in our out tweet us with the #power pitch. have you guys had boxed wine before >> yes >> and. >> i didn't like it. the mental hurdle of getting over the wine in the box >> are you more open mind than

michelle >> i have no doubt yes >> there's a lot of wine in a boxed wine >> volume matters. >> you can use that as your sales pitch. >> the recyclables are less heavy. >> there's a lot of wine in here >> recyclables which are appropriate. >> if you're at a picnic the glass won't break. >> that's very true. >> and if someone gives it to you. >> if it's free. >> good points by all. >> that's why we don't decide on the power pitch. the forhum wall street calls you need to hear about today byacuding trucks, hotels and ba bk ribs your daily dose of "street talk" is next. we created the ripple: the doughnut in a doughnut in a doughnut. right away, it was a success. i mean, it really took off. what people don't know

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jp morgan say ink can no longer -- also 5% restaurant inflation. >> i would say the t stock is getting a chilly reception chilly they own chilly's >> yes

>> trop two is a name i can never pronounce correctly. i called them today pakaar another upgrade. this time goldman sachs they agree to buy the target is 79 the -- returns on capitol. the engine business is starting to accelerate. new lodging standards should relittle rate the cycle. second upgrade for pennsylvania car in a month >> next stop, pay that's a very phone. cuts 20 from 21. india is a big part of this portion. the india slow down can be sharper than what the company warned about before. india happen with driver grow past two quarters but there could be a slow down in the

third quarter. >> your final stock, laquitna, the hotel operator bullish on hotels over all-by laquitna raised their revenue for available room forecast. the stronger economy's having stronger effects on lonling demands. more than offsetting head winds from non-traditional supply. they like the fact that la quinn fa that's has overperformed other groups 10% upside, in the call might be a good guess for fast money, raise the price for hilton, and host hotels. >> this has been a performing over 35% >> everybody's traveling if your plane isn't leaking fuel michelle you can travel to a hotel. >> got it. thanks guys. another scandal at wells fargo, the bank accused of

making improper changes to mortgages. the reporter who broke the story joins us a stock story all over, nap chat falling to $17. second hour of "power lunch" starts in two minutes.

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. welcome back i'm admissibusd here's what's on the menu. six money flags. one manager tells us why he's on the mark right now plus another scandal at wells fargo, the bank accused of making improper changes to mortgages. the reporter who broke the story joins us and a supermarket sweep. sectors getting hit hard today second hour of "power lunch" starts now if you're just joining us check out some of the biggest movers of the day, nike right now is the worse performer company's going to lay off 2% of

the global work force. the mernling markets are moving down eem which is the biggest merging market etf is on the panel for its worse day since may 18 what's working on this beautiful spring day, caterpillar, pfizer and boeing leading the dow it is leading michelle the s&p 500 lately let's get down to bob on the floor of the new york stock exchange it does seem to be holding on by barely >> obviously they were defending it at 17 let's take a look here, as klein post here, he's the guy of open snap march 2nd was the date it was at $17. the morning it traded at $17.10. march 2nd was the day.

it traded as high as $29 once its earnings came out it was may 10, it doubled down on disappointeding metrics that were there i think the concern here guys is that this doesn't particularly bold well for future ipo activities, specifically around tech unicorns that have high evaluations. buyers are sensitive to evaluations, that i have been that way for a long time tech ipos had dropped below their initial price, their price before, we had this with facebook facebook dropped blow its initial price within the first few weeks actually, then it bounced back eventually. the fact that it broke that price back in 2012, that had a chilling effect on ipo activity for quite a while wen that happened the bottom line here is what's it going to be for future

particularly ipo. >> what will it mean for snap giving the lock up expiration is coming next month and that's 70% of shares outstanding that will be eligible for sell if we're already seeing a almost breach of the price what happens then i think that's the question right? >> yeah, that's a very typical problem that happens, the lock-up expires and you do see a dip. and you're right, this is a dip before that happens and i think is a separate issue for the company. >> and mireles, you know too, this is a company that doesn't have a lot of moets. facebook has come out with their own sort of funny filter app where you can take picture and do -- >> the ears. >> i don't need the ears on people you wonder what do snapchat have that can keep people from going to other things or leaving snap all together >> it's like no bear barriers

because everybody can copy what they do. >> facebook did. >> the company to watch here next week is also tees which is one of biggest broad band providers in the united states thai going to try to go public in more than a $1 billion offerings. this is a unicorn as well. so that's the one to keep an eye on if snap drops below $17 that'll get a lot of attention >> bob thank you the news conference with fat chair janet yelling yesterday, steve lease man got the chance to ask her about her plans for her term and beyond. here's what she said >> what i said about my situation is that i fully intend to serve out my time as chair which ends in early february i have not had conversations with the president about future plans. >> steve liesman joins us now.

how do you -- you had followed cherry ellen for a long time how do you interpret what she said >> keep of neutral what's interesting the conversation has not been had. i believe she would have told us had she had it i asked about the president or his staff members and she didn't answer that part of it so i don't know if that part of the conversation has been had. she didn't answer it as to the president. i think any fake chair wants to be asked to do it. i think she's been a public servant for a long time and what i know of her is that she would serve. i don't quite know the politics of saying that you want to do it it's one of those things where i want to be asked, and the president may be like well, you have to ask me first i don't know the back and forth on that, i think it's been done before, you know the fed chair would say i'd be happy to serve and it's always been like well, i'm waiting for the president to ask me >> as to who might replace her

if it's not going to be her, on the one hand there's servants who don't like a -- and want someone who's quote/unquote more conservator et cetera. and president is a real estate guy. >> low rate guy. >> low rate guy so i don't know what would come down on the politics that they want. >> well, let me tell you the sigh of relief that's been briefed in the central banking community. the names that have been mentioned have been people that have been on the reservation there have been names whispered, people who were like gold standard folks, people who were like big opponent of the way -- >> the anti-ferret -- >> excellent come up with an abbreviation of that exactly. so that's been good. i don't think there are many people -- when trump appoint his people there won't be massive differents between those on the

board and those who he appoint if you look at our sort of fed chair derby here, here are the people under consideration, so anyway there's kevin with the fed governor leading the pack and gaining ground johntal lon still up there and there's -- the guy heading the search committee - >> that's a conflict that happens all the time. >> does it really. >> i'm the best guy. >> happens all the time. so glen hub better is also a guy. any of these guys i think are more or less okay with the people who are there now i think. there are some people who would not be okay. and by the way, about 2/3 of our respondent's to our survey don't think yellen should be reappointed but more of unsure >> got it. thanks steve >> pleasure. in the past few months the

stocks are up, treasury bonds are up, confidence is up, joblessness are down, sounds pretty good. your next guest say don't get too kplas sent there are red flags you have to pay attention to jointing us is the chief executive from dwf his fund is the number one fixed rate of funds in his category so he know from which he speaks tad thank you very much. as a bond fund manager your job is to be cautious. what is the biggest of your red flags? >> well, you're right, managers do have a tendency to be cautious and maybe we see storms brewing where others are more inclined to see the blue sky but, i think if you look there are abundant signs that we are moving very late into the credit, nasa price cycle i think a couple worth

mentioning are the build-in leverage that we've seen in the investment corporate sector, wherein the o.leverage is -- closer to junk level standing. the level of automobile sales, while they have been very high for a long period of time have shown not just weakness but more concerning from a bond person's point of view, an environment in which the oem manufacturer are being forced to provide significant more than 10%, and more purchase price of promotions to keep the game going. >> the listeners that may be listening on the radio can't see the -- stick out to me may be the retail what is it the average of americans that have been working

in retail, can you connect the dots from what's happening in retail to the broader economy? it's a bad news for the retail whether they get cuts but do we not know whether they're going to get a job from somewhere else >> right innovation and change happens all the time just because an industry has to be restructured as you indicate, doesn't seem to have broad economic -- i think it has come -- e tailing type of related observation, while it's not shown. if you look at the traffic in restaurants and see what's been happening with some of the casual dining change if it's all about experiencing and buying things any longer or finding alternate ways to buy

things would suggest the problems are deeper and broader. >> good things to highlight and for us to think about tad. thank so much. let's bring in andrew sleeman. what did you think of any of these red flags. are you nervous about the markets here >> the stock market, well, look the most important thing that happened yesterday that's not getting a lot of press i think that janet yell ensaid the product is look good that's important to stock market i don't think we're given enough press. if janet yellen said look we're not raising thing because thing are so good -- >> their predictability is terrible, awful. >> earnings dropped this year, that's why the market's up that's the reason. we're at 11, 12% earnings growth this year. >> that's pretty good. the better news about that is,

it's top line growth some smart cfo like, oh move money over here, this is actually sales >> there's concepts you have to look at the p in the market to pair interest rate at 2015 the market should be trading at a higher pique. the reason it hasn't is because people are saying time now -- so you bet better top-line growth markets will like that more. >> at some point when the yield curb flattens or investigators you start to they oh wait this is about a bad economy >> or if it raise too much it's going to cause a reception >> so we're not there yet? >> the reality is as rates go up initially stocks go up just for what you said that means revenues doing better. until a point where they go wait a minute, interest points are becoming competitive with stocks -- >> so therefore you'll have to

say if the average yield the s&p 500, 2.2 or -- >> or ten years look it up for ten years at 215 i think stock wills beat that. >> especially whether you look at what percentage of the s&p 500 yields more than that, and then when you get an appreciation of underlying asset. >> and they raise dividends. >> it's a worry if you have potentially a yield curb if we get to that point, you don't get those dividends. >> that's right. we have to watch the shape of the curb the ten year in germany is .28 if all going to be buying in the ten year but that's -- >> so, if we get some sort of major policy tax reform or repatriation deal how much is that going to add -- >> a lot >> if everything that's built in has nothing to do with congress or trump what's that extra

sprinkle >> the reason i can say it's not built in is because the estimate for this year is the same as it was before the election. i have yet -- >> you and your facts and stats. >> thank you andrew. good to have you okay sources telling me that president trump likely to be in miami tomorrow to announce a new cuba policy. based on what's being circulated among parties he's likely to make it tougher. tougher traffic requirements the need to fill out paperwork in order to travel to the island american tourism to cuba is illegal because of the u.s. embargo. to say you're going for legitimate reasons that could change also may be restrictions on doing business with the military. marriott slash star wood one of the few american companies to do business in cuba because of the the regulation the ceo put out a report today

and wrote, it'll be difficult to see the progress made in the last if you years halted and reversed by the administration as cuba move to reform its economy, american business should be credited to lead by example. we urge the trump administration to utilize travel as a tool in its effort to approve relations with cuba. i'll be there tomorrow guys. hopefully all the flights work >> for somebody who's been to cue be many times, you've been there and seen the optimism around the island. how much is misplaced in the sense that it's going to take, despite the best efforts, a longer time than we think to get anywhere >> have you seen airlines start to pair back on the flights because the demand isn't there >> and i wonder why that is, it's not the island haven that's going to pass. >> why isn't tourism has popular as the airlines thought.

good question. it's tough traveling whether you go there the hotels aren't nice, the food isn't very good. a lot of people when they go they realize they're doing poverty tools, you're looking at a lot of poor people it's cool it's stockton time but you feel bad about it all. and optimism, the people living there have a lot of optimism because exiles living in the united states can sends as lot of machine as they want. the s&p 500 have gone down and tried to do deals and come up with nothing marriott's one of the few that's been able to get in there. >> look forward to your reports on friday. here's what's coming up on "power lunch" the "new york times" say the -- we'll talk to the reporter who broke that story. the u.s. senate votes to

propose exchange on russia kroeshry's gone rotten, kroger today all that and much more coming up on "power lunch. it's all yours. wow! record time. ♪ at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. ♪ get ready, because we're helping leading companies lead with digital.

. wells fargo according to a report of the "new york times" accused of making unauthorized

changes to home mortgages for customers who are in bankruptcy. wells fargo deny it is claims. telling cnbc no event will we modify an application without giving signed documents from the customer joining us is gretchen morgan son. great to have you with us. you read a story like this and you think again. what did the bank allegedly do >> as you know, bankruptcy situations are extremely rules oriented, they have to be approved by the bankruptcy court. the creditor and borrower has to agree to terms everything has to be approved. but what these borrowers say happened to them, wells fargo changed their payment terms, gave them what looked like a loan modification, changed the

amounts they'd have to pay without their approval, without their lawyers' approval and without the approval of the courts now, this is just wrong because the courts have to approve these changes. >> right and oftentimes the payments became lower, which would same like a great thing especially for a person in bankruptcy but once you extend the term of a morning from ten years let's say to 40 years your paying the bank a whole lot more in interest that you are going to make more money of that loan >> exactly they also stand to make money from government programs that as you know provide credits and payments for banks that provide modifications for troubled borrowers. the bank did appear to profit from this practice but it really really puts borrowers at peril if those payment changes continue, that when they end up at the end of their chapter 13 bankruptcy plan they could wound

up owing a tremendous am of money, be in arrears and the foreclosures proceedings will begin. >> how extensionive does this look top >> we have seven different cases in i think four different states in north carolina, wells fargo has submitted records to the court showing at least 25 borrowers that they retro actively changed the payments on it could be far more extensive, as you know many borrowers don't have a lawyer so we don't know the extent of it when we found out in recent years when one customer comes forth with a complaint it's usual not only one >> did you say seven in 25 >> yes >> not to minimize the nature of what you accuse them of doing but it's not extensive as we know of of when they were

issuing debit cards and credit cards. >> certainly not but either one of these thing are wrong. the fact they're doing it in several different cases in five or four different states, and in this one court in north carolina admitted to at least 25. they said that they had made 100 of these changes now some of them were multiple changes for the same borrower. it clearly isn't a one off situation. that's clear to me >> in terms of this wells fargo perspective is how much deeper in hot water could this put the bank in the eyes of the regulators it seems like they're beginning to emerge from this sales practice scandal at this point >> this is not the first time that they've got into trouble. the department of justice in i think it was 2015 settled with them in the amount of $81.6 million over just this kind of practice where they were not letting the borrowers who

are in bankruptcy know about changes to the terms of their say, real estate taxes or their insurance. so at that time, the bang as part of the settlement said it would improve its practices. it clearly hasn't improved them if they are now resorting to this kind of tactic. again it seems like we see over and over again a bank that's either not in control of its administrative procedures or is, you know, running rough shot over commerce. >> gretchen great story. thank for joining us >> thank you all right ahead, another big cnbc exclusive, as boston chairman and ceo, michael may hone any joins us. stay with "power lunch." i don't miss much... definitely not the traffic. excuse me, doctor... the genomic data came in. thank you. you can do that kind of analysis? yeah, watson. i can quickly analyze

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i put everything into my business. and i had all these points from my chase ink card. so i bought ingredients, utensils, even made custom donut cutters. wow! all with points. that's how i created the ripple:

the doughnut in a doughnut in a doughnut. suddenly it's everywhere. i mean, it really took off. what will you create with your points? learn more about the ink business preferred card. . the big stock story that we're following shares of snap falling to it's ipo price the first time $17 a share was at level, $17.22, down about 3.7%. we'll watch closely for a breach of 17, broan llwi russian sanctions do

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hi there i'm count tess sa brewer here's your cnbc update.

president trump says louisiana congressman steve scalise may be in worse shape than he thought >> i visited steve and his family at the hospital last night and reassured them that the entire country is pulling for them, praying for them, and that we are here for them every single step of the way the chrysler is recalling 297,000 older mini van in the united states in canada because the driver's air bag can inflate un expectedly. the ncaa has suspended louisville coach for arranging stipteess and sex acts with student. ncaa also put the basketball on probation for 4 years and vacated wens in which eneligible

players participated louisville say it will appeal. that's the cnbc update at this hour brian back to you. >> call this a cardinal sin. cou contessa brewer. the mark's not doing a lot, the dow is down 30%. nike a big decliner laying off 2% of their global work force. the nasdaq down. the big cash -- something to watch. facebook half percent. amazon down 1.4% and snapchat touching literally $17, its exact ipo price snap something to watch. also to watch the oil market closing for today. jackie >> hey brian, we sleighed a bit more today session low was 34.43. this is coming after hitting that seven-month low yesterday

could there be more pain from here, yes. all the news of date out of opec, the ooe has been bearish they're saying a dip into the high 30s could be a possibility at this point even going into the summer technically look at 43 1/2 and then 42. the dollar has been a huge part of this trade it's going to be taking into account as factory broan brian. >> thank you jack. policy meetings at the heart land to discuss for its future take it away meg >> mel thank you so much mike thank for being with us >> thanks meg great to be here >> you're meeting with investors here in the audience, what everyone wants to know is how do we continue the growth in boston and what would we see as a catalyst from you? >> we have groan really well t

last five quarters we've grown 10%. what we're exciting about is the pipe loon for the future as well as the emerging markets. as we look out over the the next three or four years we're -- $300 million in sales today. there's a lot of group to grow, in offer pain management business, and neurology, really those businesses do expand >> we've seen a lot of consolidation in your base, and of course i think the panel you're talking on today is really about making sure you can offer a bundle of offerings. how do you look at what areas you need to bulk up in >> sure, for our whole strategy is to be a category leaders. for hospitals we want to be a key choice for them clinically we pick our market selectively in cardiovascular we want to be

the category leader in structural heart we look at that proefrlt comprehensively. so when a hospital wants to partner up with somebody they want to chose boston scientific because of the economic value. we're always looking at capabilities to add to the mma portfolio or add to our geographic reach >> what do you see in opportunities right now? >> we start to be aggressive with our venture proefrlt. we have 30 companies now in our portfolio for venture agreements everything from stimulation devices for park kin sons for stroke obesity, and pulmonary disorders as well cancer, so a widening of our portfolio. >> should we expect to see you be a bigger buyer, sort of

continuing this trend of consolidation we're seeing in your space you've been on a massive role. >> we have been acquiring two to three companies a year we see a similar cadence going forward. we'll continue to focus on that leadership, continue to broaden out the market as well as expand geographically we look at the centra teak fit as well as the return. we look at -- >> there's so much going on politically when i comes to healthcare, and a lot of the focus we've been talking today has been on drug pricing, you're not in that space, how does this uncertainty affect you >> clearly pricing a big factor in our business. unlike fa unlike pharma, more competitive in each katcategory med device is typically a

stand-out issue for hospitals in terms of med device pricing. we do focus on driving economic value with our customers a couple of examples, nice, vn hs and uk published a study with our serum devices. $6 million savings for the nice group of hospitals in the uk besides price we focus on economic value for our customers and how we save them money i don't think the clinical benefits >> if we see major changes in health insurance, if people lose coverage or coverage changes will that effect your business in terms of people being able to afford these procedures? >> it does in some parks in med tech the majority of our proefrlt is focus on acute patient need. we have less of a kind of an optional treatment in our

portfolio. so we see less of vulnerability in terms of sign tic investment in that regard >> thank for joining us. >> meg thank you very much nike announcing major lay offs today what does that say about nike retail in one of the world's best known brands? straight ahead on "power lunch." if you have medicare

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boxing legend floyd may weather and mcgregor reaching a agreement on boxing. although the payday for both fighters have not been released, reports indicating anywhere from 75 to $100 million for mcgregor and anyfrom 100 to $300 million for floyd may weather. if may weather wins this fight it will put him ahead of roky morse llano who retired with a perfect 49-year career record. are you going to be there?

>> i don't know. you've been to a may weather fight. >> aye been to vegas for a flight i'd recommend anyone go to a fight for vegas it's interesting. >> i was poking around, hotels prices in vegas that week -- listen, late august is not the best time to go to vegas hotels rates are up, ticket price has got to be out of control. conor mcgregor is a stud but he's an mma guy. i don't know if may weather has been punched >> they should do the reverse also -- >> flip it -- >> they could charge a lot for that >> a lot you have my idea >> well, you can pitch it, dana white who's the president of ufc, joining "closing bell"

tonight at 4:00 eastern time that's not a guy that mcgregor's a fan of mcgregor's, has let's just call it clofl language. there is a shortage of houses on the market and mortgage rates are falling despite what should be good news for home builders there's a new report indicating they are not quite as happen as they have been diana with the sentiment >> as you said, you'd think home buye builders would be on cloud nine. the sentiment dropped two points in join. anything above 50 on a national association of home builders indentation is considered positive but confidence has been falling after a bsurge falling the president election and that order that lifted restribs for

builders three proponents confidence in kunl sell conditions as well as expectations sales homes in april dropped dramatically due to high prices and a lack of starter homes for sale this is also a supply of existing homes for sale drop to another record low, down 11% according to a year ago. the average house sold in may went under contract in just 37 days that's another new record. red fin measure just a 2 point supply of sales. home builders claim that they're targeting to target that entry level market but not hitting the price point that most young buyers can afford. back to you guys >> all right got it. thank you so much diana. nike shares your big

corporate story today they are down the company's got to cut 2% of its global work force. time for "trading nation." christina covers for market, rich roth for s ci christina listen a lot of people are going to lose their jobs could this be a net profit for the company? >> if we were going to value companies based on the number of employers your -- this is just power for the course these days, everyone is getting more efficient at their jobs. we have more digital and testimony upgrades we think you're blowing it a little out of proportion the last time nike had significant job cuts was the recession in 2009 where they cut 5% and that was the beginning of a growth rate for the company. >> rich ross when we look at the

chart on nike what can we garner about the future /past of the company? >> it's interesting to here what corina has to say. first that chart brian, and mendiolaly it's only a chart that a technician could love you're up 1, 2% over the last year but you can see that text book head and shoulders bottom starting to round into form brian, whether you zoom out the story gets better on that long term weekly. nike has earned the benefit of the dow, the long-term weekly, it's held the average for over eight years brian, that comes around the $50 level the stocks in and around 53. this is where the buyer of the stock with that short-term buyer

coming into place. i like the stock down here >> corina throwing shade at the feng stocks. >> they don't need my shade they're getting enough >> guys thank you very much. tradingnation.cncb.com is your web side the -- to greece that's according to an official. we're waiting to hear this, greece has big debt payments due this summer, similar to what we've seen summer after summer with greek governments there were high expectations that this would eventually happen what they also said is that they're going to consider all the other euros on finance ministers whether they're going to give some kind of extension of their loan matures over the next few years the greek government has been demanding over a level of that you are debt be reduced. they say it's too high and what the u.s. prime minister has come back and said look, if you do

all the things you're suppose to do we'll extend your matures and ease your cash flow but we're not necessarily going to reduce the debt >> so, an ex tense indicates no extension up to 15 years >> exactly from a very very uncomfortable loan profile -- >> is there any indication, you've been there more recently than i have, that the fundamental greek is getting better if you loan your uncle $20,000 or he makes $20,000 a year or he owes $50,000 on his credit card and you agree to stretch that out. if he keeps making $20,000 a year things aren't going to get better for him is there any indications greece has improved snd. >> have they gone enough to make their economy better, no enough. >> the greeks you know how much they love to pay taxes >> yeah they're famous temporary not paying taxes they're suppose today all kind of reforms and still -- they say their going to do them but

executing them is rare >> so fair to charactertize this headline as another examine non kicking but not being picked up? >> yeah. germany's much more focused on that issue now and putting greece aside still ahead clean up in aisle three. shows a kroger getting squashed, down over 13% alone. next >> announcer: and now the latest from tradingnation.cncb.com. and a word from our sponsor.

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shares of kroger crushed today, down nearly 19% after cutting the full year forecast whole foods getting hit hard the executive direct african-americand senior analyst says to buy the

weakness thank you for joining us why do you believe in the story? especially as the secular head winds are aldi opening up, walmart a fierce competitor, amazon is deeper into the grocery business what makes you think the notion of the price competition eases for kroger >> yeah. in the near term, the industry is challenged and opening up a number of locations, and amazon's in the category, and walmart is making price investments. i don't disagree the environment is challenging the management team here is making the necessary price investments to further competitive positioning, and i think that's what you saw today in the guidance reduction. near term, problems persist, but longer term, this leads to market share gain, and the one positive that came from the report is you saw id sales turn positive later in q1, and they had positive comp trends start the quarter. >> right things pick up later on in the quarter, quarter to date,

according to management. gross margins was an area of disappointment how do you expect them to go especially as the ceo said in the conference call, they pledge not to lose to the competition effectively, matching price drops drops, right >> you're right. they will not lose out on price. that's the biggest risk in the near term. if walmart is aggressive, bigger impacts, and lines could remain under pressure we think kroger has potential to take more cost from the business, and down the road, they could return more capital of shareholders helping out the algorithms improve as you get to the back half of the year and into next year >> worry about being too early in saying to buy kroger and buy into the weakness? >> you know, i think right now, the stock's a show-me story. the management team is a miss, and lower guidance, so i don't

think they are bouncing back in the near term, but a longer term shareholder, i would buy wakeness today, but, you know, you'll most likely leave money in the back half of the year >> this taking down the entire sector, so is there a stock thrown out with the bath water >> yeah. other topics right now is whole foods market, you know, shares down almost 7%, and we think the whole foods management team has potential to turn around the business, and we just saw their turn around plan a few weeks ago, so we think whole foods could rally back up to $40 level over the next few quarters >> thank you for joining us. appreciate it. >> thank you for having me >> says to buy on weakness kroger >> don't move, check please is next

check please >> welcome back, dow jones and reuters reporting japan is nearing bankruptcy filing for takata, the company at the biggest recall ever in auto industry parts for the air bags and looks they may have a deal with a chinese investor for financing. we'll wait to see if that finally happens. >> interesting story there as we are watching markets and to the final hour of trading here, we're seeing another day in which we're seeing profound or more pronounced weakness in technology, and in, particular, bank stocks, a downgrade by alphabet, cutting it to a hold rating, price tact at $1,000 but what's interesting is if technology sells off, alphabet

could do better than the rest of them they are calling this relatively more defensive name within this -- what had been a high flying route >> you know, also in the markets, i noticed that the best performing stocks in the s&p this month are the worst performers over the years. kind of a -- speaking of terrible, illinois finance - >> definition of terrible. >> greece of the united states in a way financially lowest credit rating in america's state history, and power ball is stopping -- pulling out to make a million power ballot ri, pulling out of illinois unless there's a new budget deal because illinois would not be able to pay the share of winners' revenues should the winner be from illinois that's how bad it is when the lottery is leaving. lottery are's come in when you're in trouble.

why am i yelling because i'm from chicago hate to seeit. >> presumably made money with the power ball >> thank you for watching "power lunch. and "closing bell" starts right now. ♪ hi, everybody, i'm kelly evans. >> i'm wilb urg r frost in for bill griffeth. >> welcome >> great to be here. >> dragging down the dow, 19 points lower, what's behind the dip there. >> anthem dropped out of the exchanges in ohio earlier this year, and the ceo is joining us in an exclusive interview to discuss the strategy to the other 13 states where they still offer plans. >> the return of insight in the