saying it's going higher, scott. >> what's yours? >> financials. it's going to be a second half of the year story as we get to the end of the first half. second half. >> in a downtrend, it continues down. >> i'm going with xpi. >> good stuff. thanks for watching. "power lunch" starts right now. welcome, everybody i'm tyler mathisen great to be back the supreme court allows president trump to enforce parts of his travel ban with some restrictions details on that, plus wall street's whipsaw reaction today. and washington waiting for the scoring from the cbo on the senate's version of a health care replacement bill. controversial topic that we're going to debate today. should older americans pay more, maybe even a lot more, for health insurance. and super-condo stress is one monument to the ultra rich flashing red in the real estate

world. "power lunch" starts right now ♪ welcome to power lunch and welcome back to tyler mathisen i'm michelle caruso-cabrera. the dow is aiming for the first up day in five it was up triple digits and now higher by only five points and avis is soaring. the company is partnering with google's self-driving car division and arconic, much more on this hour for "power lunch. a report by the cftn says the merger with walgreens will probably get approval. brian? >> thank you very much new data showing in the first quarter, u.s. property insurers had their biggest catastrophic losses since 1994s north ridge

california earthquake. losses totalling $7.5 billion. and warren buffett investing $377 million and the martin shkreli jury trial selection some of the major technology names are taking a hit on the president trump travel ban news. we'll go to hampton pearson at the supreme court where the president is now weighing in as well hampton? >> reporter: how you doing, brian? we have the supreme court giving a partial revival to the trump travel ban th

a full hearing will continue when the court returns in the fall in the meantime, the trump administration's request is being allowed to go into effect partly gorsuch, thomas and alito are criticizing what they call a compromise "the court's remedy will prove unworkable it will also provide a flute of litigation." now the travel industry worldwide, of course, trying to figure out what it all means earlier today on cnn, this reaction from the ceo of royal caribbean. >> i think for our business, it's been booming anyhow so we don't really think this will have much of an impact of course, in the travel business, you don't like any kind of a travel ban. >> reporter: we also have a statement now from president trump. no surprise there, essentially declaring victory, in his words

saying that the action by the court today allows the suspension to become, quote, largely effective. there's an additional word from dhs, justice and the state department, in essence, saying that now that there's a partial lifling of t lifting of the injunction, they will implement those parts that can be lifted going forward. >> hampton, thank you. the markets have bounced back a little bit but then seemed to fall as we got that news bob pisani is down at the nyc. is there a connection, bob >> yes, there is as well as with oil. this is a partial ban that was allowed to go forwards there was an effect on the market here. may be harder to explain why

tech stocks when negative. look at the xlk. this is the etf. i think concerns are with regard to the h 1 b visa program. perhaps there are broader implications on investments of a more closed united states, more philosophical types of questions. the key is it didn't last very long here. oil has dropped at the same time as you can see intraday here and then oil started recovering as well the same story we've been seeing all year nothing drops the stock market look at the s&p. we see a drift now even now, if you look at the vix, we're now once again below ten and sitting near record lows yes, i think there was a relationship but, no, it didn't have a big long-term impact, at

least not yet. guys, back to you. >> thank you, bob. let's go to elon for an update. >> there are individuals who are required to wait six months before signing up for insurance if they let their coverage lapse in the previous year by 63 days or more. this is all a way of getting at that individual mandate which has been so controversial in the affordable care act and finding a way to product individuals to sign up for insurance even if they are healthy so that pre-existing conditions can be covered as well. the senate saying that consumers will not have to pay premiums during that six-month period in which they have to wait to sign up we're still digging through the details and, of course, waiting for the cbo to weigh in of how many people will be insured or uninsured under this version of

the bill and what it would do to premiums for older americans back to you. >> i want to make sure i understand if you didn't buy your insurance in the previous year, let it lapse for how many days? >> 63 days or no. >> then, if you want to buy it again, you must wait six months. >> that's exactly right. >> and this is getting people to buy how? because they are trying to eliminate -- >> it tries to get them to sign up during the open enrollment period to ensure that they join those pools at that time it's sort of, again, a stick to get you to sign up >> uh-huh. because they are trying to avoid adverse selection, right they just don't want people to sign up when they are sick >> they don't want a financial penalty anymore. now the penalty is, you won't be able to get insurance for six months if you don't sign up. that's the difference there. they don't want to attach a dollar figure to that because

it's been controversial for republicans. >> and wasn't there, in the house version of this bill, some sort of ability for insurers to add a surcharge on to the policies for people who did what we're describing here, let their coverage collapse? >> that's correct. under the house version, you could be charged a higher premium if you let your coverage last under this version, you just have to wait longer in order to sign up. there is a question over whether or not this provision could be even considered under those complicated reconciliation rules that the nate is trying to use to pass this bill. up in the air about what will happen with this technical change but clearly trying to get more republican senators on board of supporting this bill. >> thank you very much while stocks continue to move higher, some money managers are looking outside of america, suggesting our markets may be a little too pricey for their

clients. i'm joined by chief investment manager and equity strategizer air i can are, are stocks in america too expensive for you and your money right now >> they are too expensive to overweight, certainly, yeah. it's very high valuations. the economics in the united states continues to disappoint expectations even though consumer confidence remains high, you are not seeing them spend money. you look outside the u.s., europe, more attractively priced stocks and the economic data is better >> when you say emerging markets, i know you favor them they are everywhere else it's a big world can you be more specific about where you are buying stocks right now? >> generally we were in the areas that had gotten very, very heavily beat up in the selloff

that we've seen over the last year they started have a very, very low base we still think those stocks are better >> do you see it differently >> no, i agree with eric when we have our conversations with investors, universally, they are generally overinvested in domestic equities and underinvested in international this is happening at a time of elevated evaluations and we're seeing a slow down in growth here in the near term at a time when the federal reserve is withdrawing monetary support and everything i just said is the exact opposite where valuations are much more attractive

you're seeing economies stabilize and expand here. i'm thinking of the ecb with extremely great settings >> if the fed decides to get more dovish and that they are not going to raise rates anymore, something changes, would that make you more than optimistic on american equities? >> well, i think it could help support an extended cycle. i don't think it would change our view the missing ingredient is a fiscal policy stimulus if you think of it as a baton race of yellen and the fed and trump at the white house, she's getting so far out in front of trump, they risk dropping the baton. so i think that would help in terms of getting a little br more dovish here, yes.

but not cycle ending stuff, by no means. >> all right eric and talley, good discussion gentlemen, appreciate it. a news alert now in the bond market rick santelli, as he always does, tracks the action at the cme. hi, rick. >> hi, tyler 26 billion in two years just hit the street, the first of 88 billion in total supply. i gave the auction an "a." it was a great auction the fed is expected to continue to raise but look at the metrics here 1.348, that was much lower than the offer side of the one issued market so it did great on a pricing basis. 3.0, november of 2015. blows away the ten auction of 45 and 18.3 on direct and solid "a" and tomorrow, of course, will be

five-year, 34 billion. michelle, back to you. >> thanks, rick. another news alert julia boorstin is in l.a. >> that's right founded by facebook, microsoft, twitter and youtube, these companies have come together to help continue to make their services hostile to terrorists and extremists they are teaming up because they have come under criticism particularly facebook and youtube most recently for being in environments where terrorists can communicate with each other, youtube, shared videos that are ads for terrorism. these four companies saying that they are coming together to share technological solutions, to crack down on terrorism as well as research, to guide future technical and policy decisions around the removal of terrorist content and they will

work together and obviously they are very sensitive to the criticism that they have not been tough enough on their platforms. guys, back to you. >> julia, thank you very much. so should older americans pay more for their health insurance than younger ones? e-mail us at powerlunch@cnbc.com. we'll get into it right ahead. but first, president trump and the president of india come head to head that's straight ahead. ow announcer: you're watching "per lunch" on cnbc. first in business worldwide.

welcome back president trump and indian prime minister narendra modi are meeting in a couple of hours could the travel ban derail any possible deals between those two motives? seema mody has more. >> reporter: this tells you that

there is an important relationship for wall street and many investors say india has earned its position alongside china as one of the fastest growing economies in the world and over 1.5 billion people, half of which are under the age of 25. if this encouraging backdrop that has prompted some of the biggest u.s. executives to sit down with prime minister modi yesterday and about an hour and a half meeting to discuss some of the hurdles that still exist when investing in india. >> i think the biggest issue is practical issues about decision making and how to do things faster and to get them done. >> reporter: prime minister modi will arrive here in a couple of hours to meet with president trump. defense and trade will likely be on agenda. the u.s. currently has its tenth largest trade deficit with india at around $30 billion.

it's notable but pales in comparison to china and india. modi believe it is will bring down the deficit india has been investing in the energy story over $40 billion in long-term contracts from maryland and louisiana. guys, back to you. >> seema, thank you very much. joining us from washington is william cohen, founder and chairman of the cohen group. secretary, we're delighted to have you with us you've written extensively on relationships between india and the united states. a relationship that has over the decades, in my memory, been a little touchy from time to time but there has been progress, particularly in the defense area, over the past decade why? >>. >> well, it started with president bill clinton

george w. bush picked up on that effort and really accelerated it and as did president barack obama. so the trend line has been going up and i think that prime minister modi is obviously looking to ensure that that line goes up and we have a security arrangement whereby we see each other as a security partnership in that part of the world to be sure >> we're doing lots of exercises with the indian military something that really in the year 2000 wouldn't have been possible but since we're a business network, what are the commercial relationships that you're aware of between u.s. defense contractors and indian companies? >> india has become a major consumer of american military equipment. the u.s. would have to sell some 2,000 unarmed drones

that's about a $2 billion plus deal if approved by the president and goes forward we have other examples where takata company has linked up with lockheed martin so there are programs that are under way and you mentioned the training and the exercising is really quite a high level. >> uh-huh. >> so this issen a opportuni ano the united states to do more business with india. india is going to want to have more high technology which gets into the drone technology and other countries are competing. israel, the french, the russians, others want to sell if we don't so there's a deal to be made that between the presidents on this. >> let's switch to the middle east, if we might,of where the standoff, if you will, diplomatic and otherwise, between certain nations led by saudi arabia and qatar has become really front and center

the president via tweet has really come out on the side, as i understand it, of the saudis but our main military base in that region since we got basically booted from saudi arabia has been in qatar and i would imagine that the defense department is watching this very closely. where do you come down on this and how would you manage a defense establishment that wants to maintain that good relationship, i presume, with qatar and a white house that is seemingly on the other side of the issue? >> well, i was just in saudi arabia about a week and a half ago meeting with the crown prince discussing this issue and others and i would hope that the united states would find its way to be a broker in this to make sure that we sustain that relationship with qatar and not cut it off i think that would pose challenging problems

it's not to say that we couldn't move the 10,000 troops that we have, 10 to 12,000 troops that we have at the base, but it would certainly be complicating the environmental situation that we have. so i would say you could move to uae. you could move back to saudi arabia i don't think we want to see that take place, but it's going to take some compromise on the part of all parties considered. >> how concerned are you, quickly, as has been alleged, that qatar may be a funder of terrorism? >> i think it's a legitimate concern. there's an issue in terms of their support for hamas, whether they've supported the muslim brotherhood. we know they have. and so saudi arabia, uae, bahrain, egypt are all concerned about the support that they've given in the past. this is something that is not an issue that we're not aware of and it's an issue that needs to be addressed. >> secretary cohen, thank you very much.

>> good to be with you. german carmaker bmw making a big bet on president trump's call on made in america. hundreds of new dollars pouring into south carolina. next

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the s&p 500 basically flat and the nasdaq down .01. anadarko, it's been a tough go fitbit, though, on the other side it's seeing nice gains since june 1st and maybe investors are hungry for some fast food stocks. yum brands and mcdonald's, both at all-time highs. >> seniors cost more to insure and require more medical care. why shouldn't they pay more for health care coverage let us know what you think e-mail us at powerlunch@cnbc.com. we're going to debate it straight ahead a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income.

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hi, everybody. i'm sue herera here's your cnbc update at this hour supporters of texas senate bill 4 gather outside the courthouse in san antonio, which is a

lawsuit to block that law to keep it from going forward russian foreign minister sergey lavrov says western countries seem to be protecting al nusra in syria and call that a dangerous games. this comes during a news conference. a spanish judge has ordered the remains of an artist salvador to be exhumed a woman says she's the offspring of an affair between dali and her mom. a plastic film inserted into the stomach could control or cure diabetes. patients found their diabetes had disappeared or were much milder after the operation

docto that is the news update. back to you, brian. >> sue, thank you. the senate health care bill and just a few minutes ago, the senate released a revised draft of that bill covering it all for us and with more in washington >> there are big changes people don't have to pay a penalty if they don't have insurance. however, if they let their coverage lapse for 63 days or more, they would have to wait six months in order to sign up for new insurance. that penalty kicks in in 2019. they would not have to pay premiums during the six months they don't have coverage also in the past hour, the american medical association came out against this bill saying it could hurt low and middle income patients on capitol hill, five senators are opposing it and with cnbc we count ten who are up in the air

including lindsey graham of south carolina he told our colleague phil lebeau that the odds don't look good. >> i think it's less than 50/50. obamacare is failing but we don't have consensus as republicans how to replace it. we know what we don't like we're not so sure what we do like that's our problem. >> some republicans have tried but pass or fail, the vote will happen senator john cornyn said that the real deadline wasn't until august 1st but he tweeted, "i am closing the door we need to do it this week." we're waiting for the cbo score to drop at any minute. my bet is that it will happen after markets close if at all. back over to you. >> thank you older americans will have to pay more for health insurance with the new gop health care

bill people under the age of 17 make up 23% of the population but represent only 10% of health care spending. people age 18 to 34 are 35% of the population but represent only 20% of the costs. 45 to 64, those people are 26% of the population but consume 36% of the costs and those over the age of 65, only 15% of the population but represent 33% of the spending under obamacare, the near elderly can be charged three times more under the gop plan, that could end up being five times more senate bill also calls for older americans to devote a larger percentage of income to premiums compared to younger people that brings us to our debate should older americans pay for for health care? david is the legislative council

for government affairs at aarp, good to have you here. >> thanks for having me. >> david, i bet you don't like this idea. >> no, of course not older americans already pay three times more than what others pay for health care and it needs to be affordable and right now it's barely afor tfore for those over age 50. >> jeff, one of the arguments is that health insurance needs to be more affordable for young people to get them to sign up to offset the costs for the older people. >> that's exactly the argument and at a general level, letting the insurance premiums reflect the riskiness of people being insured across other groups is entirely rational and has a

distributional impact. >> obamacare already acknowledges, jeff, implicitly or even explicitly that older people should pay more but how much more should they pay? >> it's hard to know because we don't have any market prices we have a government dictate we don't know if it's three to one or five to one or 12 to one. letting the market to some greater degree. >> jeff, are you aware of any companies that charge more, that supply health insurance to their employees that charge more for older workers to participate than younger workers who do this >> i am not personally aware but that gets to an interesting part of this issue, which is that right now if we switch from

the 3-to-1 to 5-to-1, if we have, on average, over a long period, it's not necessarily harming anyone because when you're young you pay the relatively low rates and on average that should be the same for everyone it's only the current near elderly that will get penalized by this. >> david, do you think older american should not pay more at all or because they consume more health care, is there some degree to which they should pay more >> older americans already pay three times what everyone else pays the real key is to make sure that health care is affordable the average premium for an older american is around $12,000 but the average income is about $25,000. you can't possibly be spending half your money on health care of course you've got to make it more affordable and we want a broad insurance market

the more we cover, the better. but we must make it affordable for everyone >> the tax credits would start to kick in, david. the lower their income goes, even if they are older, they would get offsets for sure. >> right we have tax credits that are helping people who are older and who have more expensive insurance. and we have a maximum of 3-to-1 age rating it makes the underlying premium more expensive plus, it helps people buy and afford their insurance there's a double whammy here at the end of the day, people need to be able to afford health insurance. >> again, we outlined all of those things that you said but the example that you gave where somebody is spending 60% of their income on a premium is not

reality. is that going to happen, jeff? >> well, it might happen. >> well, that's interesting. their tax credits won't kick in even if it's consuming 50% of their income >> but prices are going to keep going up and up and up if i could relate to david's opinion about affordable, it's by the country that's paying all of the taxes the money doesn't come from just out of heaven. it coulds from us so if we may have a system that generates inefficiencies, that makes it more expensive and the system costs everybody more and more. >> the taxpayer would pick it up david is suggesting that the individual would have to pick it up >> the individual and taxpayer are at some level the same thing. >> no, i get that. >> right >> so you're right that maybe if the credits and the subsidies for the premiums are sufficiently high, individuals won't face it. but that just says we've hidden

the problem in the extra taxes we're going to have to raise and at some point we can't afford all of those taxes. >> is it -- this has been a very good conversation, by the way, to not have it divolve into a political fight? you can easily throw out, hey, you're trying to basically make grandma suffer and the other side is that medicare costs have gone up and the population has risen 56%. how do we overcome that to find some real answers and not result in partisan bickering. >> it's about what the bill will do to premiums and quite frankly, everybody wins no matter what the age is if we help hold down health care costs in this country and i can tell you that the bills have been put forward by both the house and

senate that do nothing to address the underlying issues of high health care costs and prescription drug costs. >> i'm glad you said that. we talked about this serve trying to figure out how to pay for it. why isn't anybody having a grown-up discussion about why health care costs so much in the united states? >> i would agree with you 100% we know for a fact that, for example, prescription drug costs are rising three, four, five times inflation. we know there's problems in the prescription drug market but we have done nothing in the last sen yea ten years to deal with the cost of prescription drugs. we're just saying, who can we ask to pay more for health insurance and in this case it's people who are older or sicker or people with pre-existing conditions that makes no sense if we're trying to make sure that as many people as possible have affordable health insurance. >> jeff and david, a lot of

people believe the way we pay for health care is why it costs so much. but we'll leave that for another day. jeff and david, good to have you on >> thank you. we'd like to hear more from you on this very issue should older people pay more for health care? e-mail us at powerlunch@cnbc.com. in court today, martin shkreli. >> reporter: it's the first day of the martin shkreli trial. it's received a lot of media attention and it's okay for the jurors to have an opinion as long as it doesn't affect them deciding the case. assume jurors have said that

martin shkreli is the face of corporate greed. that's some of the reasons why they are getting dismissed today. the judge plans to start the trial as soon as jury selection is over and she expects that to be tomorrow morning. of course, the reason martin shkreli is so famous, it's for raising the price of drugs he's not on trial for that we'll bring you more news. back over to you. >> thank you, meg, reporting from brooklyn. to phil lebeau with breaking news hi, phil. >> richard anderson, the ceo of delta airlines is now the new ceo of amtrak. the former ceo has been removed. richard anderson until last year was the ceo of delta and now steps into the position of running amtrak a whole different set of challenges for the airline industry even if their most difficult days.

>> the choke i guess is -- liste listen -- to see the conditions of the train, i think it's kind of a sad sentiment to the state of this that they're getting rid of a train guy and bringing in an airline guy because the train guy either couldn't get it done or received -- >> and that a train guy, munoz, is running it. and look at the problems that united is having just saying. bulk buying, kids clothes and expensive handbags on the mu.en your daily dose of "street talk" is next. don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital.

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bmw showing more confidence in american manufacturing.

phil lebeau is live from spartanburg. hi, phil. >> reporter: this is where they build all of the bmw crossovers and the suvs they are going to be increasing at least the number of employees here and the work that they are doing, we'll see what happens with production as well. the company announcing it will invest $600 million into this plant in the next three years and adding an additional 1,000 jobs the fact of the matter is, while they crank out these models here, the vast majority are exported just 29% of what bmw sells in the united states is made here, most of what they sell in dealerships is imported. i had a chance to sit down with the bmw chairman and i asked if

he was worried about a tariff or tax on imported vehicles as threatened by the president and nafta will be changed because they are building a plant down in mexico. for now he says no change in the plans for building in mexico and nor is he worried about nafta changing. >> we're flexible but we didn't talk about nafta during that time we talked about our expansion here and i was talking about how proud i was about the future plans in terms of training that was the key topic >> reporter: that is harold kruger talking about his meetings with president trump a couple months ago when he was there with the german chancellor angela merkel. certainly not performing up to the rest of the market which is up 14% the bottom line is, this is the hub for all suv production

worldwide for bmw and that is not changing if anything, it will increase because of the global demand for these vehicles. >> got it. thank you very much, phil lebeau time now for street talk today, wall street commenting on a bunch of retailers raymond james, for example, upgrading costco to outperform stock pulled back 13% since that amazon and whole foods announcement the analyst says that represents an opportunity doesn't see much threat from the deal since it does not impact costco's business model. they believe the model remains in tact. worth noting that costco traded at a premium compared to the overall market and raymond james says the price target is 173 bucks, a 10% upside. >> children's place, telsey advisory group, upgraded to

outperform don't throw this stock out with the bath water the company continues to perform well because it's managed inventory better a shut down of gymboree should be able to boree should help. >> the stocks have been whacked because of everything. a lot of upsides there >> buckingham research upgrading of the brand coach to buy, raising the stock of 58 buc$58.5 analysts despite the stock's out performance today, they still see an upside based on four things there is in kreecrease of kate e and investors may evaluate the stock as the company reestablishes itself as the only u.s. based luxury brand polling

company. not a small capital, berry global, they make a lot of things but disposal cups is one of them. >> analysts saber ari has been a strong cash flow story they like the company's financial flexibilities. it already blown through its targets and their new 65 targets is about 13 to 14 upside >> it is this new technology of bio degradable apparently. i am checking it online. its got some designs on it and things going over housing of manufacturing housing and white paper that you see >> who knew? >> tyler >> all right guys, it is the ilonic new york city luxury sky, it wl be setting new records in foreclosures. that's next.

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two multi billion dollars foreclosures in manhattan.

our robert frank has the details. >> tyler, welcome back >> the higher they rise, the more they fall >> it is the most expensive in new york's history on the 79th floor of 157 that's the super tower over looking central park, is headed for foreclosure option next month. it is sold for under $51 million. >> we don't know the identity of the buyer through an llc of 167, 69 it was purchased, of course, back in 2014 when things are better when the building opened at 2014, this was the signal of the new class luxury of manhattan. apartments were sold for 7,000

per square foot. the b right now a lot of over supply luxury towers and a lot of buyers hurting new development sales down 25% in the latest quarter, units of 157 selling for discounts of over 20%. now this apartment of $51 million heading to department of 2019 no word on the results >> we have no idea of whether this person put downey kind of down payment or going to the bank i am guessing this person is walking away or this investment group walking away did they lose anything or financing at 100% now that lu

luxingberg banks much easier for them to walk away from these deals. yet a third country where american buyer using american banks. it is tougher to walk away we can see a lot more of these it is so easy for them, it is your problem and not mine. >> what's the average price for it it depends, was it 7,000 square foot >> a lot of them were between $5,007,000 it was at the height of the market that gave birth to 432 park which was taller and expensive and central park we'll have to see what happens with a lot of these buildings that had a lot of llc with foreign buyers smart phones, the new cigarettes, is it the government or the pens acart'ple to intervene. redebate of the second hour of "power lunch."

♪

at johnson's we care about safety as much as you do. that's why we meet or exceed 15 global regulations for baby products. and where standards differ, we always go with the toughest. johnson's. quarterbacwelcome back, hern menu for your second hour of "power lunch," is facebook too late to the game is there such a thing being too young to own masmart phones

a group in colorado wants to ban sales for kids under $13 >> we'll tell you why as "power lunch" begins right now. a check on the mark of the supreme court's travel ban decision the s & p is higher by 4 and nasdaq is lower by 4 nestle sea is higher european bang sisters are seeing gain as the italian government is willing to shut down two regional banks and large taxpayers fund bail out. >> good evening everybody, i am tyler matt

facebook and google are teaming up to fight terrorism on their platfo platforms as they are facing growing terrorism situations >> julia is in los angeles with the details. >> hi, tyler, google are making sure and facebook are tackling news ensuring add vevertisers tt its markets are accurate to tackle everything from concerns of lents of ad views to box. >> we have seen to go from one issue to another and, what i want to do more is look at the whole industry and pieces together because if you put the consumers in the middle. i think you can build better trust. >> speaking of building trusts, facebook and google and youtube are both investing in tv style

that advertisers trust as they trust those dollars. facebook is not only striking deal from box buzz bead but now are also looking into invest in the types of shows that air on cable tv facebook is willing to pay as much as $3 million an episode which is in line of who shows on sea cost facebook has been building up to this within the facebook app this year introducing a separate app for watching videos on facebook on your television. michelle >> all right, lets bring in our tech writer at ad week >> ed, let me ask you, is this a smart thing for facebook to do edmund lee >> they don't have the right content right now to track those

big brand ad dollars that go to tv mostly. >> marty, what do you think? >> it is definitely is, the last couple of quarters facebook talked about how ads are slowing, the mobile impressions, maybe on the not plateauing but they're slowing down compares to previous quarters so it could be a valuable thing of getting interesting and profitable profits. >> this maybe a back door into a hardware platform. when i look at netflix and apple tv and amazon, they have one thing in common, they have ways to watch it on a 55 inch panel or the little roku thing or whatever it maybe. does facebook have that or everybody watching these on their five inch phones >> they did cut a deal with samsung where you see a facebook smart app, samsung tv, all facebook had to do is hit the

cut deal with roku to get their software on there. there is enough video viewing happening. >> that's the big point, right >> you can make a tv >> brian, netflix does not have its own boxes, all net bliflix s to do is get its apps on tv. facebook introducing this viewing app earlier this year. what kind of content want to make people watch facebook on an app on their tv screen this kidney nd of investment - i misspoke >> right now you go to facebook, you are not there. it is active, you are dealing with your friends and family and people watching video and facebook, i don't know how many people are going to do that >> julian and i -- facebook live, don't they watch that.

>> on their phones >> they do we have a long discussion now for years and this region of the world suddenly arrive with a lot of money, oil was 140 bucks, private equity at one point in time coca-cola used to own a movie studio and norman leigh's company. over and over again, we see sector economy are flown with cash and throwing money at hollywood. does this worry you about facebook >> not necessarily it is weird because the last couple of years, they waived on whether their immediate company and i think this move they're embraces and they'll never say that because they want to see him as mutual as possible. a few weeks ago, they have been testing out the video thing on the left hand, if you click on a video that you are watching it,

and so if ru watchiyou are a wa a desktop and laptop, you can keep scrolling and watching ads there. so i think, yeah, i think people get bored sometimes. >> it is not a lot of extra cash sitting there and not knowing what on earth to do with it. and a lot of places over the world they throw it on hollywood. >> yeah, sure, that's it that's not a bad way to think about it in term of this particular i think this is their first real attempt of professional content meaning they paid for it and owned it >> neither is amazon >> my point exactly. >> now they're great at ads. they're winning golden globes and getting nominated for no, ma'am nominees >> you get the right people to

produce for you, you will win. >> facebook is an advertising business and all they need to continue that growth is to start luring over more television ad dollars, what they're doing is looking at high dollars contents looking to invest in >> this is the golden era. >> it is great >> the other thing is, competition of snap chats, they have been making all these deals with immediate companies to get more short term content. that's facebook's big player instagram competing with snap chat play by play and facebook can get some of these media dollars over from the same company part of snap chat. all right guys, thanks, trying to explain the rational, edmund and yule julia as well. we'll look back, remember how great that era was in

television why? it was extra money buying stuffer. >> a lot of different discussions. >> there is so many different ways to watch television today >> there is no tv, there is just videos and does not matter how it is watched. the idea of television -- >> i sit on my back porch and watch ball games on my cell phone. it does not matter it is a four inch screen. >> who's game? >> alexa knows everything. >> so much attention is being paid to what's happening in washington another capitol, springfield, illinois, unless a deadlock can be broken by the end of this week, illinois can enter its third fiscal year without a budget something has never happened before joining us now, rick santorum.

>> are you having another credit ra rating >> rick santelli >> some public schools are paying 9%. the reason they're getting 9% is because the people in institutions are working with one. it is all that law will allow right now and consider this. the last ten years, we have lost around 330,000 residents the moral of the story is, i know there is great new york economists that always say tax the rich and soak the rich and tax the rich, well, the last governor, governor quinn did exactly that here is the straight one it is the soaking and taxing the rich just causes a condition where they leave for other states and the middle class gets stuck and paying potentially one

in every $4 of income coming out of illinois is paying. retired employees and 30% don't even live in illinois. >> that's it because you retire with a pension and your cost of living are high so you move to florida and you are not putting that money back in the msystem chicago, has the biggest flight of population of any county in the united states over the last five years more people of cook county than any other in the entire country. i want to ask you again for one second, if you had to put a percentage risk chance on an illinois bankruptcy, what would it be? >> because that would make detroit bankruptcy looks like a mole hill compares to a mountain >> i don't know if illinois is allowed to go brankrupt. ask me if i think they're going to get lower to junk status, my answer is yes. as how they proceed, the courts

like democratic leader and springfield and mike madigan, they're trying to keep all of this from getting changed. some form of bk has to happen, i don't think there is anyway they can tax their way out of it. >> rick santelli >> here is arconic, the deadly fire in london fascinating article in yesterday's new york times that pointed exactly to these cladding and kind of plastic that's highly flammable. >> there was reports from reuters this morning of e-mails from iconic sale managers going into details of the sales of these panels shares of arconic are downright now. they'll off flow the day it is immediately quote, "discontinuing global sales for

use and high-rise applications." this is a right decision because of the inconsistencinconsistenc. investigators believe that product, this is the type of combustible aluminum cladding contributed to the quick spread of the fire that resulted in at least 79 people dead >> it is saying, it was not up to the company to decide that's up to the local building code experts, now, officials now said the safety of 600 residential high-rises in britain, panels had been found on dozens of buildings so far. all of this as the company kn knkno

known -- analysts say the biggest risk is this pr nightmare could make it harder to recruit the ceo >> when it comes to e-mails, the sales man is asking why are they using this was there a whole discussion that they should not be put on these towers on high-rise. >> yes >> i have not seen this e-mail myself is a whole back and forth about whether these should be used as high-rise. we have seen them limited dramatically in places like here in tust, you can use these panels but they have to be on low rise buildings and specific regulations of how they are applied. the major market in the world right now where you see these panels are put on high-rises is britain. the fire, if you have a fire situation, it is going to spread quickly because of this material that's sandwiched between the aluminum thank you very much. children under 13, should they have smart phones, should

it be the government or the parents make the decision? >> we'll explain >> why our next guest says small cap tech dogs are the place to be, all that and more is coming up on "power lunch." [ indistinct chatter ] [ intense music playing ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the gle350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

welcome to our next guest of the largest build out that we have seen in the early days. it is benefiting u.s. small cap tech his fund is up 7% this year. >> did i have that right, your fund is up by 7% >> yes >> before we get to why you think this is a good time for small cap, that's small cap values >>. >> right there was an article over the weekend about how the universe of stocks from which to pick has contracted absolutely and making it harder for a, managers to be benchmarked and b, much harder for small accounts like you to find good stocks did that story resonates with you? >> we are talking about technology today and you see

that in technology you look at landscape and semiconductor and capital equipment, there is a mass consolidation. >> i have seen a lot of companies coming public. >> exactly >> that is more so than this led of shrinking to the pool >> where are you finding in technology of the kind of stocks that fit your criteria and explain as you answer that, what your criteria are? >> we are valued manufactures and we like cheap stocks people are silly to realize how great they are but something they have caused them to be cheap. we look at things that are cheap and can fix themselves overtime. >> traditionally, we view a lot of sickle technology like technology and things are not working out so well. what's going to change that and what's going to make people excited about that >> when you buy one of these

technology build up stocks, i will get you to name a couple that you are looking at right now. how old do you expect to hold them >> at least two years. many of the things we involve or new management or cycle changes overtime if that's the case, these things are, six months, they are not flipped. >> a lot of the semiconduct stocks still trade very low multiples, what's really important is that you are seeing good growth and you are seeing over a long extended of time from a base that's very, very low. >> do any of the famous gains represent any values right now >> if you look at the income statements of those big stocks, facebook, google and amazon, tremendous amount of cap tech. one of the names we owned

iis - is --amazon is reporting at a big stock order. >> i know in terms of this trick tripling down. your job is to find who's going to benefit and i love your holdings because some of them are old names. >> uh-huh. >> unisis. >> why is that stocking top it >> you got a new management and a company that's been around for very long time and tremendous amount of revenue, really no margins speak up a tremendous amount of liabilities meaning got a lot of pension ex pension right there what needs to happen, over anytitime you need to eat out a little margin on the existing revenue again, not something that you are going to own for a flip or

something that you will work at next month or courts >> something that has the stats right and its got a revenue and balance sheet that's not in great shape but one overtime could be improved. >> thank you >> appreciate it you being with us >> biotech, rental car at a warm coat it is the good and bad and ugly. it is coming up. >> golfer jordan spieth makes a billion dollars shot literally. the celebration to follow next on "power lunch. or plan for tomorrow? at kpmg, we believe success requires both. with our broad range of services and industry expertise, kpmg can help you anticipate tomorrow and deliver today. kpmg.

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welcome back to "power lunch. first of the good, avis budget group. for 10% gain of avis budget. onto the bad, canada goose, the company itself will not get any of the proceeds, stock is up by a little more 4% it is an ugly day for agio agios pharma the trial treatments for

leukemia did not make for treatments that stock is up >> all right, michelle >> an amazing shot from the bunker from jordan spieth. $1.2 million on that shot, all that is nice but the most impressive thing is that the jump shoulder bump with his caddy. lets watch it again. >> he throws his club and comes out of the bunker and chest bump look at this, i cannot get it. it takes me three to get out of the bunker that's nice, talent right there. >> fantastic >> that's a heck of a bunker, you see how steep that hill is >> i would have hit it in the face of the bunker >> god, it is good to be 24 and whatever age he is >> should children under 13 be legally banned from owning or

using a smart phone? a new proposal on colorado will prevent retailers from selling phones to kids or having them be used by the parents who byuys them that debate is next. i want you to weigh in by e-mails us at powerlunc powerlunch @cnbc.com [ indistinct chatter ] [ intense music playing ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e300 for $569 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

ech hi everybody, i am sue hera, here is what's happening at this hour the court will hear arguments in the case beginning in october. president trump called it a clear victory for national security alleged london mosqu mosqumosque attac mosque attackmosque attac mosque attacker darren osborne is appearing in court after attacking his van outside a mosque of northern london last week skcuba divers are continuing to search bodies

and just a short while ago, team new zealand won the america's cup. back in 2013, they blew an 8-1 league it was not to be this time around michelle, i will send it back to you. >> lets get to josh at silicon valley >> we are seeing these headlines dropped right now on apple that's specifically apple is working with hertz here to manage a small autonomous fleet. we have the headlines here tim cook publicly confirm ld his company's interest in self driving technology and remember you said that he was focusing on

autonomous system and one purpose of autonomous system is of these self driving cars they're not going to say what they're putting out just yet the headline here, apple is working with hertz to manage small autonomous fleet apple will have the competition to deal with this morning, wamo announcing its partnership, back to you >> the way i think about this, i get off the plane and i don't run into car as much as i do because of uber. >> yeah. >> i don't understand why they need this. i don't understand how this gets me to rent a car instead of doing that >> does any of that makes sense? >> yes, it does. >> the avis deal is service the car, cleaning it out is it over technology?

>> listen, again brian, all we have is the headline at this point. >> don't mean to put you on the spot >> i think taking a step back, there is a lot of speculations of what apple is thinking here in terms of long-term strategy with this technology they'll say they think he's interested in the software and the system that powers the car and license that to automakers, that's what the partnership is all about. that calls out to apple and let you guys know. >> do i need to rent a driver less car, ultimately, that's what drivers think >> i don't want to get in driver less cars. >> not yet >> that's a mistake on your car. >> thank you >> if you are a parent of a

young child. social media and the ability for your kid interacting of literally anyone in the world without you know it. we have not seen the widespread use of automobile. does that mean we should ban kids under 13 from being able to own? a group in colorado wants to do just that. skro joining us, our doctor and doctor farnum, you got five kids, you know from which you speak. all of us with children at a certain age will understand the frustration. i often want to take my daughter's phone and throw it across the room. >> does this take nanny's stating too far? >> only about 30% of the parents of those kids are monitoring kids on their masmart phones >> we know kids that get

addicted to smart phones have shrinkage of their frontal lob . lobes. >> this is a common sense. >> listen, i am sure you dealt with it and i am sure tyler has dealt with it. the argument is that, there is a safety aspect, that smart phone makes people feel safer with their children because you know where they are and they can get in touch and of wave s to communicate. the bill that we are trying to get past in colorado, specifically states that it is only smart phones. you can have cell phones with voice or touch or gps locating we understand that and it does not, this is all on the retailers on their selling to children >> so what does it prohibits >> it does not prohibit anybody.

>> it does not, you know, if you are a parent and your kid has diabetes and monitoring their n insul insulin, there is some use out there. >> why is it the responsibility, senator of the parents to enforce whatever reasonable rules in terms of time usage and in terms of blocking of certain websites why is it the parent's responsibility and not the state to do that >> i believe that question is directed to me based on my read of the proposed ballot measure and based on my understanding of the issue, i would say this is more of a family matter that parents have a responsibility to make sure that if their children have access to the technology, they're using it in a way that's not harmful to them and puts them at risk i think there are approaches out

there that help families to help achieve a better than a 30% as far as monitoring and i am happy to talk more about that. i think the way this provision is, measure is written is difficult to point faults and put burden on retailers. i am not sure if this proposed solution is the best one for serious problems >> how many under age kids have smart phones >> right now there is no restrictions on any change so a 5-year-old >> they don't have a credit record last time i got a cell phone, i got make sure i pay the contract fees and etcetera and etcetera, i mean unless you are going into 7-eleven and do the pay as you go >> exactly >> those are not smart phones.

>> i have talked to kids that have done exactly that >> they have gone in and bought an ipad and smart phones and activate without their parents knowing. >> i hear your argument. could we make the same argument with beer or drivering, hing. it is up to the parents to decide if their son or daughter is mature enough to have a glass of wine. the government dictates it that you have to be 21. >> well, i would say that in that situation or example, the parents does use discretion. obviously, in colorado, the legal drinking age is 21 if parents decide at the dinner table to allow someone to have a bit of whiine, that reenforces e rational behind supporting families to make these decisions and make sure that kids are not

abusing technologies or abusing liquor alcoholic beverages >> brian, there is all kinds of examples where the state steps into regulate behavior that's regarded as dangerous. >> driving age and drinking age and doctor farnum, you would say this is another area that i would say, i am curious of what the research is, what the research is if you refer to a moment ago or unique and native only to smart phones or whether the same sort of brain deficit occurs if a person plays a video all day or sits at a computer all day >> the data comes from dangteenr who are adedicted to video game. we know children that owns smart phones are socially only 3% of the time are they doing anything educational or you know that nature, most of the time they're

playing game and social media. even if you know, it is pretty easy to extrapolate but we see it happens we see behavioral traits on and off of smart phones and the addicted behavior is pretty easy to see >> all right, folks. wrap it up >> if i can have a comment >> go ahead. >> i agree with doctor farnum that there are serious issues in terms of children abusing technology there is no question about that. i think if you look at the details of this provision, in terms of enforcing it and requires of retailers to verbally ask the consumers of who's going to be the end user o f the product. those things make it complicated.

>> think think it i think it ist we need to have a discussion on. >> it is not going anywhere. >> every single parent that i have spoken with have had issues with this and trying to monitor it and not easy. >> gentlemen both thank you. >> you heard the debate, you can e-mail us or tweet us or callous on your smart phones, whatever you would like to do all right, what big business story happens 20 years ago warning, the answer may make you feel old and bond yields falling to the lower level since the election the feds just raised the interest rates, what's going on here we'll explain it

thanks for the ride around norfolk! and i just wanted to say, geico is proud to have served the military for over 75 years! roger that. captain's waiting to give you a tour of the wisconsin now. could've parked a little bit closer... it's gonna be dark by the time i get there. geico®. proudly serving the military for over 75 years.

what turn 20 today h "harry potter" did >> for me, it was the best of them was published "harry potter" have sold in all of millions of copies.

>> gina, stock market is up and the economy is up. i don't understand why bond yields are down, please help us to explain >> well, the yield curve has been doing something called bare flattening but, the long end has been fallen, that's the long end of the bond markets saying we don't believe in reaffiliatiflation. that's why it is called a bare flatt flattener. >> what's that, explain it lament's term, please. >> that means the -- no, that's not what i mean. generally speaking when you expect interest rates hike, the

short end of the curve will come up and anticipate that interest rates hike >> if the longer curve does not believe there is enough growth economic growth to support those interest rates hike, they'll fall >> the short end is coming up and the long end is falling. that's flattening the curve in a way that suggests that we have a bare outlook >> matt, you talked about bullish survey and some of the shorter tea bill etcetera, how do you explain the bond market and stock market as well >> there is plenty of reason to look for yields lower here >> it is just one of a long line of numbers weaker than kpeexpecd we have the atlanta fed and new york fed both lowering their estimates and new york is below

2% now and we also have commodities and oil is not the only commodity is coming down. you see industrial commodity is decelerating there is a lot of reasons that justine sky buo gina joints out that the yield will belower the position of the ten years notice higher. the trade data shows speculators who are wrong are loaded to the gils of these things sentiments are starting to get to the extreme that's not to the same extreme that has to get to the 90% we'll have the same extremes to that side as we had on the other side in december skrjust beforeh market turns rates should launch or head lower here you got to be careful moving to

the summer >> they get to 90%, let us know. mortgage rates may move down as well matt and gina, thank you very much both. we'll see you online >> michelle and tyler, check it out. >> we told you breaking news of apple and hertz of the collaboration, we'll have more on this story, don't move. >> now of the latest from our sponsor. when you earn stocks that's higher, help lock in profits by raising your stock orders. so, consider raising your exit point to under a snicaigfint support level, allowing you to ride the trend as long as possible

we've got new details from a story involving apple and hertz which is moving by 12% josh lipton is back. josh >> reporter: so a quick update, those headlines that were popping fast and furiously on apple and hertz. sources familiar with the situation confirming to me that the new series at apple is

simply leasing cars, leasing six cars from hertz for autonomous software testing, so that obviously is a lot different than saying apple is partnering with hertz why exactly apple is leasing these cars obviously a company that sits on a huge cash pile waiting for clear clarification on that, an i'll get that as soon as i have it from the company. again, sources confirming here that this is not a partnership but that apple is simply leagues six cars from hertz for autonomous soft war setting. >> why don't they just buy them? >> car max. >> apple is cheap. >> hi, jon fortt. >> apple is cheap. >> they don't like to overpay for anything have a place set up in new york city where they are doing meetings, could buy it they haven't bought it they are leasing it. squeeze their suppliers for every penny. they are cheap, in a good way. >> so they buy -- how big a business ultimately is autonomous driving cars going to be for apple >> i think it's potentially

huge, but they haven't decided probably how they are going -- >> or zero. >> or nothing. >> it's potentially huge, but are they going to do software, are they going to build a whole car and try to sell, it et cetera why it makes sense for apple and other companies to partner or at least work with these rental companies is these companies have various rental locations, often at airports all over people who service cars are used to taking cars in, right, cleaning them up, sending them back out again. >> you said the "s" word, service. please explain the avis deal as far as we can understand this is literally a deal to vacuum out cars. >> it's possibly just that. >> yes it's just that. >> you put a grocery store next to amazon. people get excited you put a rental car place next to google or apple people get excited. i mean, we're getting technology married with the real world. people think it's going to happen tomorrow. it's not going to happen thunderstorm, but these are important relationships to begin to see bloom.

>> we should underline these are two fundamentally different things apple is leagues cars from hertz to work on the driverless technology and ave sis just going to clean and service cars for google's waymo. >> and 12% and 15% moves. >> here you have these companies, we've got lyft and uber we're got all of these, you know, ride service companies out there that are taking business away from the rental folks they have got these locations and have people who know how to service cars. >> i know, but is it worth 11% and 15%? i'm not saying it makes sense. >> i do think it sets a serious tone about the market which is that the market is desperate for any sort of new thing. any time these big stocks get attached to anything, we see these literally-goingal's waymo is hiring out to vacuum and change the oil on cars which adds to a couple hundred million

in market cap. >> silly >> on that note we leave t.jit jon, i'll see you riding around in your autonomous vehicle. >> coming up, world's ugliest dog. >> that dog is ugly. ♪ ♪ oh, so prtyet ♪ i feel pretty ♪ at johnson's we care about safety as much as you do. that's why we meet or exceed 15 global regulations for baby products. and where standards differ, we always go with the toughest.

johnson's. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average? [ intense music playing ] ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the gle350 for $579 a month at your local mercedes-benz dealer.

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>> health insurance should be like car insurance, an a, b and c rate and if you're in great health you get a discount. jmh writes no. health care fees should be based on health of the person, that's both young and old that use it more should pay more healthy people less. fair with an exclamation point bill writes rates should be based not just on age but lifestyle choices, obesity, drug users, et cetera, money incentive to be healthy and yes, older americans should pay higher insurance premiums than younger americans. note, i am 62 years young. paul says no should people with children pay more in education taxes? should patriot missile traveling interstates pay more road taxes? that's actually the theory behind tolls the idea is not to pay for service but an averagingout of cost seniors are the most vulnerable and least handle to handle increased costs. >> i dispute that. had your whole life to work and save and why should younger people be saddled more.

>> parents do taipei more because they move to towns with good schools we ask if children under 13 should be able to buy or use cell phones. ken tweeted i'm good with kids being banned on durelle phones maxine tweets parents should decide i don't want the state disciplining my kids. >> if they can get a parent credit card hooked up they can go to uber or lyft good to enforce age limit on smartphone uses. >> 12 years age is an appropriate age in this day and age. tom, are you tracking everything that your 12-year-old is doing on that phone, every post, every snapchat chat which disappears after nine seconds just asking. >> time for check, please. if that wasn't, check, please. i thought it was. >> check, piece. >> we brought you the market's

ugliest stocks in honor of the world's ugliest dog contest. the winner, martha, a 15-pound neapolitan mastif. >> she's not ugly. she's charming. >> she sees just who she is is i love it. >> let's not body shame dogs. >> thanks for watching "power lunch. "closing bell" starts right now. >> there are no ugly dogs. >> i was going to ask who you thought might lose or win the ugliest stock contest because you could have made a case for some of those like auto rental names until -- >> until a couple hours ago when the people who shorted those names are in a world of pain today because of some really interesting announcements that we'll goat here in just a minute. >> we'll be covering that in just a little bit. >> welcome to "closing bell. i'm kelly evans of the new york stock exchange. >> and i'm bill griff et stocks are mostly higher on wall