>> john? >> somebody is probably nervous about the big run for chicago bridge but it's getting calls. >> how about during the show somebody brought in 38,000 calls. >> and that does it for "the halftime report. "power lunch" starts right now. >> i'm michelle caruso-cabrera best gain in two months as three major head feds, including yellen into pl plus, one senator says it's time to ban all of the direct-to-consumer ads what is the evening newscast going to do? we'll debate. and amazon under fire. president trump taking a shot at the internet giant for avoiding what he calls internet taxes

bazos versus trump "power lunch" starts right now here's what else is happening. southwest airlines pulling back on its service to cuba because the routes were not sustainable. southwest will continue the service from ft. lauderdale and tampa to havana. phil jackson out as new york knicks president they were 80-166 in his full three seasons. and for the first time ever, samsung will build appliances right here in america. it will open a factory in south carolina creating more than 950 jobs by 2020. i'm tyler mathisen a rally today. financials, industrials are leading the way at this hour one stock we're watching is

fedex. the stock is higher after it said there was no data breach to the tnt express unit but there could be a possible financial impact from a disruption in operations let's get the latest on this rock them, sock them rally in this edition of "power lunch." bob pisani is on the floor of the nyse hi, bob. >> reporter: there doesn't seem to be anything in the way of the market ramp. let's look at the internals right now. we open 5 to 1 that's a good open it stayed that way throughout the whole open the volume is moderate lifting quietly and volatility keeps dropping we know that story, too. sector, it's this rotation again. oil service names, bank names and retail names, whatsectors are trading for the upside oil service names, bank names and retail

they are leading as well here and how about the banks starting to see the move forward. we've been telling you about the results this afternoon who will be able to buy back more stock citigroup on many people's list for increasing the dividend as well stabilization with the ten-year is helping as well and to look at oxlf, even in europe you see the europe banks strong again from an ecb banking forum. some may get the green light to buy back capital or buying back a return capital michelle, wouldn't that be something to see something happen with the european banks as well? again, remember, 2 1/2 days away from the end of the quarter. michelle >> thank you, bob. we already talked about the

stock market but fed chair janet yellen saying that it's looking somewhat rich if you have some traditional metrics and john williams saying that the stock market is running on fumes are they right nancy, when i looked at the market reaction today, it's like they look at these people as contrarian i contrarian indicators. what do you think? >> it always makes me nervous when the fed is talking about the stock market and the comment that it's running on fumes is ludicrous and the market is responding to that the majority has been driven by

earnings growth, somewhere over 60%. and the rest is multiple expansion. still, we're not at nosebleed levels in terms of multiple expansion. >> give me a number. what are you looking at in forward earnings, for example? >> what am i looking when -- >> when it comes to valuations and p.e. levels, they are not at nosebleed levels, where are they and where do you think they could go >> i haven't looked today but we're looking at 18 times forward earnings i've been in this business for a long time. we've been at much higher levels for the nasdaq so i'm not arguing that stocks are cheap, but they're not running on fumes that is to be sure. >> mark, if nancy is right, and my sense is that it's the valuations that are a little higher than the average historically that they have been is this a time where you buy the market or you're far more selective and try to buy

individual stocks, though indexes have beaten most of the time. >> i think it's a time to be more selective i think you can look at the market today and we talked about the valuations at roughly 18 times p.e. i would argue that is fairly expensive. it's 20, 25% above longer term historical norms 18 times p.e., 12 times ebitda, that's a little high the nice thing today is interest rates are low, inflation is still low. i think you can argue for that. >> where do i find bargains? where do i find value in a market that you describe is a little stretched >> what we do is we try to focus on companies that have sustainable, competitive advantages so some economic moat around their business and then build around the balance sheets. >> give me an example. give me some examples of companies that have those moats.

>> berkshire hathaway, southwest airlines whether it's carnival cruise line, a number of companies where i think there's moats there and, importantly -- >> it's called the ocean for carnival, right? >> it's also a billion dollars to build a shop. >> how hot is it today in phoenix, nancy >> it's 118. >> 118 okay enjoy. >> oh, yeah. >> it's not the heat it's the humidity. a news alert in the bond market seven-year notes are up for auction. rick santelli is tracking it >> it is a c-minus, similar to yesterday at 34 million. the yield of these 28 billion, seven-year notes lasted 88 in coupon supply. it was 2.056 it was just a whisker above the big side of 2.05 so not perfect

in pricing 2.46 bid to cover. it was the lightest since january. not that long ago. long-term average is 2.53. 65.4 is a little light 9.4 on directs was also a little bit light. everything was a little below average, hence the "c" minus sometimes you get a rally. not seeing it today. with supply out of the way, i guess all we have to look forward to is more information from balance sheet controllers around the globe like mario draghi yesterday >> you were talking about this, but the big pop in european yields yesterday helped lift american yields a little bit right, rick? >> yes >> tell me more about that. >> the intersection there is quite simple, that the globe and light capital moves, rates are going to follow each other if mario draghi is hinting about

an exit with regard to the balance sheet, no matter the timeline, market takes it a bit serious. we followed european rates up. they've come off a little bit today but not much you can clearly see whether it's tens or higher yields before draghi's statement and that's very important >> terrific. rick, thanks training tomorrow and a worrying sign ahead of it. what does this mean for blue apron as it prepares to go public is this a bad sign for the ipo in general let's bring in the senior deputy san francisco bureau chief and cnbc contributor scott, i'll start off with you do you think if they did the pricing last friday before the amazon/whole foods deal happened, that this could be a different story altogether >> it could be i mean, the -- certainly the valuation is weighing on investors. they slashed the price below

what investors like fidelity paid two years ago and i think certainly amazon/whole foods, when you look at what amazon could do, with suddenly having over 400 distribution points in high-end neighborhoods serving premium food, to borrow the shark tank fame, amazon could crush blue apron like the cockroach that it is it's growing very quickly. its revenue is doing well. it's got a brand there's not a lot of barrier there is for other companies to come in. i'm sure it's weighing on the divor investors' minds but their marketing costs are growing as well about 25% of revenue compared to 15% a year ago and that's because they have to keep replenishing their customers and that costs a lot of money. >> and it's up 181%

year-on-year herb, i know you're the skeptic. you say they already have so many competitors already before amazon and whole foods tied up. >> it wasn't just the competitors. it was the 25% discount card i got in the mail. >> it's not just one i mean, i know i got the offer again and again and again. >> it would be one thing if they made the food for me but when you look at any of these, you could extend it to uber. when you're talking to the uber driver and they say how they are being subsidized, you're like, what happens when this goes public it doesn't guarantee it's going to be what the private investors thought they were. blue april, the latest example. >> should we worry, herb, about the fact that their s-1 says they may never, ever make money?

>> well, that's -- >> a lot of companies say that. >> every single one of them. and by the way -- >> many of them never did. >> well, those boilerplates are there for a reason they can point back to them. look, we've been in periods like this so many times before and to try to say something like, you know, does this top the ipo market who knows. it's a company trying to make an exit at a time that isn't appropriate for them. >> leslie picker is squoinijoins she was on "squawk box" earlier. have you heard a positive word about this company yet going public during these discussions today? >> i have been looking for one, michelle, and i'm having a hard time finding that. herb brought up a great point. the timing they decided to go out right after this amazon/whole foods deal was announced are they rushing this out before

things get worse, before they face a momentous amount of competition? i think that's why we're seeing so much skepticism >> here's the thing. the world is so contrarian on this ipo i mean, it's so negative i am so negative we've all cited the very obvious things. >> the sentiment of snap going into its ipo, it's got giant competitors in facebook or which ever competitor that you want that is bigger than snap and was there this shout that snap had to get things out before things turned >> yeah. >> are we looking at everything with such a skeptical eye these days >> absolutely. i think blue apron really needs the cash they had about a quarter left of burn they raised debt to help them out but they are spending money like crazy right now there are all of these facebook

offers in my facebook field, these blue apron coupons. >> as we look at these meal delivery services, we have half a dozen of them over there i'm familiar with hello fresh. i like what they deliver it's a good product. it's not an inexpensive product. how many of these brands, scott, are going to be out there as standalone brands in three years? >> not many. look at e-commerce how many can you really name that have done well? >> zulilly was supposed to be e-commerce ipos. we've had other companies try and amazon is the brand name the consumer side is just very difficult. the company doing well are -- >> would you put your money in any of these, herb >> well, you could have asked me the same question about web van back at the 1990s and i could argue that it was just an idea

that was a little too early. >> yep. >> by 20 years and maybe 20 years from now we'll say, what a great idea this was and who -- so you just never know >> i was going to ask the opposite question of tyler herb, would you recommend shorting blue apron when it goes public >> well, since we haven't done one ounce of work on it since -- >> will you be looking into it >> we don't recommend shorting or doing anything like that. we would put up risk it was a high-risk situation based on everything that was disclosed based on everything that we know about it, especially the customer acquisition costs and the level of competition so that would be big, red flags for us, you know, assuming we looked at it which we have. >> all right scott, herb, leslie, thank you coming up in the next hour, we'll speak with a blue apron

competitor called freshly and they actually do cook the food for you. all this week we're debating specific issues with health care today we're tackling this question should the drug companies not be allowed to advertise directly to consumers? spun@cc.m.at porlchnbcomyace is coming, i un. we're back after this. most etfs only track 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. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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you see a drug for gout and you think we should stop that? it's a huge industry. >> i can tell you why. the consumers who don't understand the sophisticated issues about these drugs take the name of the drug into the doctor and say, will you write me this prescription too many of them just do that drives up the costs for health care that are not effective or not really necessary. >> that was senator dick durbin speaking with me this morning on "morning joe." his point is that we could save billions of health care if drug companies were barred from advertising the drugs directly marketed to consumers on tv, magazines and newspapers does he have a point $3 billion to prescription now

to $45 billion far outpacing the costs. doctor, the senator's point is, people see this stuff and say, i have an itchy back i'm going to tell the doctor what i need. how serious of a problem is that do you agree we should ban direct-to-consumer advertising >> well, first of all, it's a pleasure to be on. i'm a physician and i practice internal medicine and there's a great deal of evidence out there that direct-to-consumer advertising stimulates prescriptions to be written for expensive medications, in many cases where those medications are not clinically indicated there may be lower cost options, generic drugs for conditions

that aren't being advertised but what we see is when patients do bring these specific advertising directed requests into physicians, physicians in many cases write the prescription for the products there are plenty of other data supporting what senator durbin has to say >> john camp, what are your thoughts ban it or let people make up their own minds? >> is this the kind of bread i want, these are the kind of pills i want >> those who want to ban for direct-to-consumer drugs are voting for ignorant among the american people. we believe that the best decisions are made when doctors and patients have good conversations that are based on facts. i disagree with the doctor on the idea that docs are automatically going to prescribe a drug that is asked for there's really good research, a

doctor out of california has done some good research and found that when patients ask for a specific drug, they don't necessarily get it but they do get the standard of care in their area i so i think that we need to be very careful of what we are doing in america. >> respond to what john kamp just said but is the problem that you pinpoint in your earlier answer, does it really have to do with the advertising or is the more central problem the relationship between the doctor and patient, that the doctor doesn't step up and say, okay, you bring me this advertisement for an $86,000 a year hep c medication and there's one that will work fine for you at $9,000 a year isn't that really what we ought to be focusing on here >> well, i do think you have to focus on the advertising itself because, in many cases, the

advertisements do not show a full picture of the product that they make. >> so why don't you? are doctors wimps? it's the doctor's job to say, actually, that doesn't apply to you. you're telling me as an industry that you can't >> no, i think doctors can do that but it is -- there is a limbed amou limited amount of time and a lot of things to go over i'm not saying this is right or wrong. the data shows that in many cases doctors will -- >> how do you handle it? >> i try to sit down and have a full conversation with them and explain the benefits and risks of the medications they saw on television and if there are other medications that are better or more appropriate for them it takes time and, in many cases, again, i'm not trying to

blame physicians because they have a lot to take care of in a limited period of time and these kinds of requests that are driven by advertising, patients can get the wrong impression about the product because it doesn't fully describe the risks or may misrepresent -- >> doctor, time is tight john, you talked about ignorance. shouldn't we be a little ignorant about this? this is specialized stuff. that's why this doctor goes to school for stuff like this eight years after college, including residency. do americans need to understand all that stuff complicated medical stuff? >> no, they don't need to understand all of the complicated medical stuff. what they need to know is that there's an option available to them that they can have a reasonable discussion with their doctors about those options. doctors aren't stupid. they are incredibly intelligent people my doctors like the

conversations that i have with them about the kpgoptions that e available to me because it means that i'm clearly invested in my medicines and the treatments that are available to them i think we need to have those conversations with doctors and patients so that doctors can make the decisions that are appropriate. >> john kamp and doctor, thank you for joining us. >> the question i have, if the u.s. did ban direct-to-consumer advertising, would that actually lower the cost of drugs? why is there a notion that if drug companies don't spend that money, that that will go to the cutting of prices? >> i'm not convinced. >> i guess the answer to that -- and i'm just speculating -- we did 4.1 billion prescriptions filled last year let's say that cuts down by 15%. insurance companies pay about 75% of your drug costs

you take those costs out of the system >> a lower total expense one thing that would be true is that lots of media outlets and magazines. >> would suffer. >> would suffer massively. because these are not just quick ads. they are long ads. >> oh, yeah. >> the side effects. >> it's 5% pitch and 75% disclaimer. >> absolutely. >> whether that's in print or on television. >> yes. >> and literally, the disclaimer is -- >> the majority of the ad. >> they have these incredible -- >> go to the hospital. >> obviously >> anyway -- >> side effects of turning green and dying. all right. now it's your turn do you think it's time to ban drug ads you can e-mail us. a lot of e-mail going on lately.

powerlunch@cnbc.com. your response is at the end of the show will traditional retirement plans, pension plans soon be a thing of the past? >> i'm shocked plus, jury selection in the martin shkreli case. finding jurors is a problem. we have the latest on that next.

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>> announcer: cnbc news update is sponsored by comcast business built for business hi, everybody. i'm sue herera here's your cnbc update for this hour russian president putin says russia intends to grow its military potential further he spoke at a ceremony for military and police academy graduates. he said the only powerful armies forces can protect russia from possible threats >> a fire burning in california has had a devastating impact on that area in central, california they are fighting hot spots right now. some people are returning to their homes finding that they were destroyed the blaze is 40% contained. more than 68,000 chest of drawers sold online are being

recalled because of serious dangers of tipping over. and wine, anybody? a japanese logisticscompany teaming up with an artificial intelligence developer to create a robot to determine your favorite taste in wine there's been a 48% rise in sales. that's the news update at this hour michelle, back to you. >> thank you, sue. the dow and s&p having the best one-day gain in two months. s&p is higher by 23, a gain of nearly 1%. nasdaq is up more than 1%, actually, 1.25%. cboe, northern trust and delta and sherwin-williams are at the highest.

at one-week lows, marathon, anadarko and newfield. let's head to dominic chu. >> in the entire sector, the stocks are on the highest rise jpmorgan and goldman sachs helping to lift the dow overall. check out the ticker xlf it appears over the last three days those traders have stepped up to buy that dip guys, back over to you. >> dom, thank you. workers at ups break decades of a tradition and freeze pension plans. morgan >> ups will freeze pension plans for nonunion workers and will

contribute to any beyond savings employee matched the move speaks to a big trend incorporate america right now. ballooning pension liabilities and the effort to quell them ups had a nearly $10 billion pension shortfall. so in light of this, we've got more plans that are being frozen with employers shifting to hybrid pensions and defining contribution plans like those 401(k)s. from 1998 to 2015, the percentage of fortune 500 employers still offering the defined benefit plans to new hires fell from 59% down to 20%. and 39% had frozen pension plan altogether some of the names that have frozen plans kimberly-clark, boeing, aig, u.s. steel, just to name a few many companies like gm and

united tech and last month, sears, are now offloading those obligations to insurers. most notably, prudential and metlife, this makes the balance sheets less volatile and creates a source of growth for multiline insurers so we're seeing a shift away from traditional pensions and then we're seeing those frozen pension plans shifted to insurers guys >> morgan, thank you morgan brennan. it's day three in court for martin shkreli who is being charged with price gouging he's so disliked that the court is struggling to find impartial jurors this could be a big problem for the case, meg. >> it could be we were expecting opening arguments could have started at the end of day one or maybe the beginning of day two

we've been sitting at the courthouse they have reached a pool of 60 prospective jurors from which they are going to narrow down to 12 you can see shkreli arriving there this morning from the 60, they will widdle down to 12 and 6 alternates. a lot of people had potential scheduling issues. a lot of people saying i can't get away for six weeks a lot of people expressed opinions that they had about him coming into the courtroom that they said would make them unable to be fair to impartially weigh the facts of the case. one person telling the judge, "in this particular case, the only thing i'd be impartial about is which prison he goes to". >> that will get you disqualified. >> i think a defense would throw a pitch. >> maybe and "just looking at him kind of twists my stomach.

and a third person saying, "he disrespected the wu-tang clan. so now that we've reached the 60, they have gotten through the people who said they couldn't be impartial. >> what did he do with the wu-tang clan >> he purchased it for $2 million. >> it was a one-off album. songs that have never been heard by anybody and he bought it and said he wouldn't play it for anybody. >> now you get it, right >> so the wu-tang members are like, we didn't want this guy to buy the album. >> it shows the frustration that people have with drug prices that's what a lot of people who have issues coming into the courtroom have expressed. >> thank you, meg. still ahead, look, no hands. gm upping the ante in the autonomous vehicle race.

look at that there is all of the technology in the cars the answer to fixing distracted driving or is it making it worse? we'll ask someone who makes his living behind the wheel for nascar we'll be right back. ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

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welcome back to "power lunch. the dow is near session highs on track for the best days since the start of the month all components positive on the day so far leaders include jb hunt and matson and ryder there are reports coming out of tesla that bmw may release an electric vehicle keep an eye on it, guys. michelle, back to you. >> thanks, dom speaking of cars, gm is upping the ante in the super cruise control system in a new cadillac phil lebeau is in california with more. >> reporter: i'm driving hands-free i'm on 280 heading into san

francisco. this is super cruise technology. we have a couple of shots here you can see i'm driving handsfree as we're going down the highway. we're going to raise the speed here you can use this up to 85 miles per hour and its only technology that can be used to drive handsfree on the highways. you can't use it in the neighborhood if you look at this camera right here, this camera right here on the steering column, this allows the car to check your eyes, your head position to ensure that you're always paying attention which then raises the question, what happens if i'm one of those people who insists on texting or if i get drowsy while i'm driving? watch what happens when my eyes leave the road for too long. we're not endorsing texting and driving but look, i'm holding a smartphone and at some point the car is going to take control and say, i need to take control. there you go you hear the alarm red light comes up here. and now i'm back in control. if you continue to ignore these

warnings, let's say you've fallen asleep, driving late at night and you're not hearing these warnings, the car will continue to alert you. then the hazard flashers will come on. the car will slow down and eventually come to a stop and then an on-star operator will reach out to you and say, what's going on did you have a heart attack? are you asleep you've got to take control of the vehicle. once again, i've re-engaged it and we're driving handsfree. guys, general motors and cadillac believe this is a game-changer it can allow people to go long stretches if you don't want to engage the vehicle if you don't want to. you need to engage the wheel to lane change. if you're going from chicago to st. louis, you can do virtually the whole drive like this without having to ride the brake or the accelerator or to hold on to the steering wheel. >> it seems a lot like autopilot, phil.

even down to the point where it alerts you to slow and then eventually stops the vehicle >> reporter: but autopilot does not have the camera and that's what cadillac points out is a key difference here. this camera allows them to say, we know you're not paying attention. again, we're not endorsing this, but if you were to close your eyes, i'm closing my eyes. at some point the car will know you're not paying attention and when you're not paying attention, the car will say, okay, you've got to -- see, it's been in the same lane. and then it will tell you -- >> it didn't beep, though. you had your eyes closed for a long time. >> you can keep your sunglasses on i've had this question all day long the system can't see your eyes, how does it know where you are it's facial recognition and relative to what is going on out on the highway ahead of you. very cool technology, guys. >> the camera may not have noticed that you had your eyes

closed but some of the drivers that passed you did. very alarmed >> i think i've lost you can you hear me? >> yes i hear you >> i'll send it back to you and take it from here. >> so is this push to create more seemingly smart cars going to make us safer on the road or is all of this technology going to lead to maybe more distracted driving? paul is editor of "the revs institute. this cadillac technology sounds to me a little bit like an in-between way to move to autonomous driving in other words, you still have to pay a lot of attention here you cannot completely check out. so why have autonomous drive >> well, you're exactly right, tyler. this is sort of a stop gap or interim step on the way to full

autonomy but the fact that this system is checking to see whether you're still engaged means you have to be engaged >> yeah. >> in the industry, these things are known as drive state sensing. but the other thing that those initials could stand for is driver spy system, right you're being monitored in your own car which some people may find freaky. the question is, honestly, even if this sends an alert to get re-engaged, can you instantly, after a period of sort of relative disengagement, can you get re-engaged instantly in an emergency even with this system? and that's really unclear, to be honest with you. >> paul, i don't see driverless being worth it until i don't have to look anymore at all, until i can sit in the back seat they are teasing us with all of this stuff but when are we going to get there are we ever going to get there >> that's a big debate in the

industry in some companies, for example, google is really emphasizing we ought to skip this interim step and go to full autonomy. >> yep >> there's a government terminology. there's different levels l-1, 2, 3, 4, et cetera. i think it stops at 4 or 5 but full autonomy is an l-4 and google is an l-4 approach while most of the auto industry, not every car company is more on the l-3. we'll get you there partially step by step the government is going to have to decide this at some point, honestly >> the government or insurers are going to have to decide. >> or the consumer. >> or the consumer yes. there's a lot of dynamics. but what's legal and what will consumers accept in the end, i'm absolutely convinced that driverless technology will save a lot of lives, be better for the environment and that sort of thing. the big question is, how do we get there? what are the steps and are some of these interim steps really

that beneficial if you have to remain engaged anyway? >> paul, thank you very much, from naples, florida. get ready, folks, nascar returns to nbc this saturday night at 7:00 p.m. eastern time. clint boyer is going to be in it thank you for joining us. >> thanks for having me on >> before we get into nascar and you're a businessman as well, semiserious question we're talking about distracted driving. >> yeah. >> are you more nervous on the highway? i'm not kidding. or the track. >> you know, probably more frustrated on the highway. you see so many times somebody swirling all over the road and there they are on their phone and you're like, what are you doing, man focus. distracted driving is a worry for everybody. it's a problem it's real and alive and we've

got to get to the bottom of it >> because we have to go both left and right in life. >> exactly. >> let's talk about your business you own the clinton bowyer business how do you see the economy how are your car sales doing how is the business of bowyer? >> i think the business of nascar is alive and well that's my business, right? i race on sunday and hopefully sell on monday and that aspect has rang true with this sport. the networking and partnerships behind all of these races. as you see, a respon a sponsor t car, hopefully you can connect the dots with their business and the next business. it's a ton of fun. you're not just a driving holding a wheel. you've got to be a spokesperson for all of these companies and do your job outside as well. >> you should have been

sponsored by duct tape because the front of your car was totally covered. >> i tore it up, didn't i? >> you finished second that's great we see people switching sponsors after the financial crisis it looks like things have gotten more focus >> it's gotten more focus. the networking behind these partnerships, that's the fun part about it. you can't lose sight of that you get a new opportunity, a new partner coming in, you want to be able to figure their world out. how can i connect the dots and get more sponsors. that's how it works. >> and it's going to work in a big way on saturday night. clinton bowyer, i predict a big win for you. my predictions never come true but this one will. it's 7:00 p.m. on saturday night. he he's been hot.

back to you. "power rundown" is next.

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wos sometimes referred to as the guardian of amazon not paying internet taxes which they should, is fake news it comes after "the washington post" put out a story a fake issue of "time" magazine was hanging in some of the president's golf clubs >> what are internet taxes >> sales tax >> i thought amazon was collecting -- >> yes -- >> you know, i assume amazon do what the president does, and that is to stay pay as little tax as the law requires. >> which is fair it's legal. >> and we can deduce that amazon is in the president's sights i mean, whether or not he can do anything about whole foods -- he's got his eye. >> it's in the sights because he doesn't like "the washington post" and its conch of it. >> he slammed amazon before

bezos bought "the washington post." >> for anti-competitive. >> too big, too powerful. >> he's very good at -- >> i'll say this, his main beef has to do with "the washington post" coverage >> don't you think he's good at surfi surfing the zeitgeist of the moment he thinking there is a swath of the population -- >> it's sort of an odd tweet can we agree on that >> yes add it to the list. >> forget about the content, just the word structure. >> okay. >> i think word structure is not his reals occupation. >> topic two, representative jason chaffetz says they could have been a housing allowance to help ease of pain of the d.c.'s pricey market, $2500 a month. >> he's leaving his position,

right? so i think all of his other colleagues put him up to this, because he doesn't -- >> he doesn't have to run, so he can say this >> i agree with it, though. >> why >> because i'll bet you we find first off the cost of travel -- a lot of these guys go home every weekend, the flights, i don't know if that's reimbursed. so if it keeps them around to work more? >> i think we should -- the united states government should buy a dormitory in the outskirts of -- and make everybody stay in that dormitory as public servants of the united states. >> wow. >> do they get to see visitor as after 10:00 p.m., melissa? [ laughter ] >> probably solve some other -- >> lastly here, we hear every year americans are getting heavier. it appears or pets are as well a new report by banfield pet hospital found one in three pets who visited their facilities was overweight or obese.

>> are we surprised? >> no. that's what happens to children, it happens to pets. >> do you have a dog >> i have two cats. >> are they obese? probably not, because you're not. >> no, one is probably a little heavier than it should be, but -- >> the reason i ask is our viewers probably know this, if you have a dog, my dog is almost 18, so he gets to eat whatever he wants you go to the pet food store and it's turned into gourmet aisle there's $4 cans of stew you would consider eating if you were hungry and there was nothing else so i think maybe there's too many pet food options. some of it looks good. >> tasty little things. >> any port in the storm, tyler. i'm asking for a friend. speaking of health -- >> the pate look good on cracker. >> remember "prince of tides"s abusive father shall she served of dog food -- "now, this is

food." the real segue, the problem with health care, it may be not who is paying, but how much we are paying how do we fix that that's ahead in the second hour of power n it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock. ♪ 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.

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welcome to the second hour of "power lunch. are we focused on the wrong problem? maybe the issue isn't who pays, but how much we are paying for the treatment itself plus warren buffett called the new health care bill the relief for the rich act. is he right? a deeper dive as to what taxes will be cut and who benefits. blue apron gets set to go public, and we'll competent is a competitor freshly could they be next in line for an ipo "power lunch" starts right now strong day, the major averages, financials are leading the way, the fed's record cart, you can see the dow is higher by 160 points s&p financials higher by 1.66%,

and some beaten down names are rebounding trip divorce, transocean down 40%, kroger down 30% this year, but today those names are leading the s&p 500. tripadviser up fearly 6%. >> well come to the second hour of powell powell pending home sales missing estimates and dropping in may. april's reading revised down, as lower inventory continues to push prices higher sticking with housing, mortgage apps dropping more than 6% last week as wealthy buyers step back the averages loan size for home purchasing fell to the lower level since january. after a long search, a jury now apparently has been chosen in the schkreli trial. while congress continues to argue over how to pay for america's $3 trillion mel care bill, why are more people asking why health care costs so much in the first place?

why do we spent so much more we are asking that, and look at some of the staggering growth in per-person health care spending according to a government research paper, per person spending averaged about $9y 200 in 2013. that's up from just $147 per person in 1960 consider this if health care costs rose with the normal race of inflation that $147 would be $1200, instead nearly eight times that why? the biggest cost is the treatment of chronic diseases, which account for 86% of total health spending. some of those chronic diseases are directly related to things like america's obesity crisis, diabetes and arthritis another thing we spent so much is the huge jump in prescription drugs issued to americans. much of that related to what we just talked about. a final stats for you. in 1960, america spend just under $3 billion on

prescriptions, 55 years later that has grown to more than $45 billion, a change of more than 1500%. last year more than 4 billion prescriptions were filled at american pharmacies. on "squawk box" this morning, toby cosgrove ceo of the cleveland clinic talked about the alarming issue of cost. >> i don't think they're dealing with the root cause of the problem. it's not how you divide the money. the problem is the rising cost of health care. >> let's now bring in steven brill, author of "new york times" best-seller "america's bitter pill. bakley we're trying -- congress has an impossible job, because they're trying to figure out a way to pay for a system which is probably something you can't pay for, $3 trillion and continuing to grow. have you been able to identify in your research why we spend so much money on health care, compared to everybody else >> sure. sure

congress doesn't have an impossible job they're just doing the wrong cob as toby cosgrove pointed out they're fog can yous on the cost of health insurance premiums, and premiums cost so much, because the health insurers, just like you and me, have to pay for the high cost of drugs and the high cost of hospital stays. why is that cost so high because in the united states we tried an experiment that no other country in the world tried. we decided that we're going to make health care a free market product. hospitals can charge everything they said and they -- so that the insurance company, if they have to negotiate with the yale new haven hospital in new haven, it's the only hospital in town, so they have to pay whatever the hospital asks them to pay. so the issue isn't what congress is doing about insurance

coverage the issue is why are we the only country in the free world, for example, that doesn't do something to control the cost of drugs. >> because it promotes a tremendous amount of innovation and new drugs, et cetera a lot of people would argue we need a free market in health insurance where none of us here actually buy it out on the open market, right? we get it through our employers. >> excuse me, you interrupted me >> i thought you had stopped talking. >> no, i didn't have a chance to finish my point. the drug companies spend less on r & d than they spend either on stock buybacks or on marketing that is a total myth, and the drug companies are very happy to sell in europe and in asia for half or two thirds the price what they sell for here. so even assuming you were right, what you would be saying is the united states has signed up to pay premium for drugs so that

they can be less expensive all over the world which isn't true -- >> we have long argued that in fact this should be the government getting involved with the world trade organization and saying to places like japan and germany, why do you you, a rich country, deserve cheap price-controlled drugs why are we subsidizing, they don't have cheap -- >> you just mentioned that -- >> no, i said they're less. >> u.s. companies sell for far cheaper overseas, you don't think they're bullied into that? >> i didn't use the word cheap they less at less exorbitant prices the drug companies in the world, in this country have profit margins, gross profit margins after all that great r & d that are higher than google, higher than any industry you can name why is that? because we give then a monopoly when we give them a patent

they can charge anything they want it's not that the cost of drugs is cheap in germany, it's just that it's at slightly higher profit margin, whereas in this countryist double or triple that profit margin. >> are they able to -- are those countries able to sell those drugs or buy those drugs at lower prices, because they have national -- >> of course they do. >> national health insurance programs that negotiate that price? >> of course they do that's exactly right congress doesn't even let medicare, the largest consumer and buyer of drugs in the world, doesn't even let medicare negotiate the price of drugs. >> so, you know, you've mentioned, and i think interestingly, the idea that drug companies are given patents on their discoveries, but shouldn't they -- i mean, shouldn't they have some period where they benefit from the intellectual ownership >> of course they should. >> how would you change that

>> i do it every other country, they apply some control to the prices, so that the ceo of a drug company can't wake up one more and saying, you know, the $200 we're charging for this pill, let's make it $1,000, what the heck that is abuse of a monopoly. every other country does it. this is not rocket science the same thing with nonprofit hospitals, the same thing with medical devices. we are the only country in the world that does this our health care results are no better, and often worse than every other country. our costs are 50 to 80% higher why is this such a mystery >> profits of what bring products to market. >> but they would have -- >> we would have far better products on the market if other countries actually did it our way. >> so you're saying that if one of the drug companies only had a 30% margin instead of a 60% margin, i'm talking net, not

gross, that they would just decide let's go out of business, it's not worth it? >> no. you're making a totally different point than what i'm making, profit is what brings things to market. >> no one is against profit. >> the more you control profit, the fewer products you will get. if you start to squeeze margins, you'll get less of it. it's that simple that's the trade-off that we have accepted in this country, and you're right, i think it's completely wrong that other countries try to control profit margins so much more than we do. it's not fair, they're wrong, not us >> steven, let's change the topic. >> well, she's very sure of herself. >> so are you. >> i'm just matching you you think of sing of-payer system is the way to do. >> did i say anything about a single-payer system.

>> no, but you want a lot more government control that gets closer -- >> did i say anything about single payer is that some interview i wasn't involved >> no, i'm guess you're using different words to drew i what most countries do. >> a lot of countries don't have single payer, but they have some controls on profits of a product where the consumer has no choice but to buy that product. that's not a terribly exotic argument >> steven brill, we are going to leave it there it was a meaty discussion, a heady issue. this issue of cost at least now people are talking about cost instead of just how to pay somebody is finally asking why does it cost that much steven brill, thank you. >> sure enough. relief for the richard, robert frank joins us now. >> the senate health care bill would reduce tax revenue yet 45%

of those gains go to the top 1%. the legislation would repeal the tax hikes imposed by the affordable care act, as well as the 0.9% medicare payroll tax surge overall, they would cut household taxes by a total average of $670 a year, middle-class earners would see a tax cut of about $280, about 0.4% the top 1% gets a tax cud of $45,000, even on a percentage base, much higher, 2%. the richest earnerses those who make $5 million or mo a year, an average tax cut of $250,000, a cut of 2.5%.

since they pay most of the taxes, and of course lots of people say this isn't a tax cut, just reversing the hikes billions nair could see -- much of his friends would be saving $so million or more are talksing things that wealthy mainly take. >> so, yeah, it's just -- only been around a couple years >> i'm not saying people should be for or against it, but this is something the writers are going to have to address rhetorically it's going to be the charge from the democrats. >> i think the sad part is -- i'm not saying it's not important, but i think the sad part goes to everything -- chuck

schumer the other day. ten seconds into his comments responding to mitch mcconnell he talked about tax cuts for billionaires no one is talking about why we're so sick, why health care costs so much. it's clouding the entire serious issue. >> it's an important economic component. there are people, our views who this matters to. exactly. >> thanks, robert. oil still below $45 a barrel at what point does this become a problem to the drillers. is turmoil in d.c. affecting how c oeismts view the economy all that and more coming up on "power lunch." you always pay

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a used car, yogig-speed internet.me? you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids. and these guys. him. ah. oh hello- that lady. these houses! yes, yes and yes. and don't forget about them. uh huh. sure. still yes! you can get it too. welcome to the party. introducing gig-speed internet from xfinity. finally, gig for your neighborhood too. time for street talk analyst recommendations on the stocks you need to know about citi initiating coverage on big

insurers, humana and aetna specifically also added to citi's u.s. focus list the firm believes the stock has a strong position with the market the analyst also setting a buy rating $275 price targets on humana saying it's built a coveted franchise, and that should deliver strong growth. >> one angle health care we haven't talked about is the impact on companies, they must be switching constantly when these new bills come out it's hard -- >> it's hard to handicap it. >> we're giving you a shoutout, analysts, a little love. goldman sachs adding to the conviction buy list. that is about 14% up side. the analyst at goldman says there's an improving story, assumptions seemed conservative with margins he thinking they'll gro up, with asset servicing and think that is buybacking will drive about

15% earnings growth. state street bank up about 2% maybe on the call. >> clearly financials have had a great two-day run here, right? carries about 3% over the past two sessions alone next up, square. with a buy rating calling it the tesla of payments. >> you're the tesla of anchors. >> i don't know what -- i i'll think about what you are, brian. the target is $28, worth noting the firm is also starting coverage on visa with a buy rating, one of the reasons why -- increased credit card usage in japan which could add a billion in incremental revenue >> that's big in japan last but not least, generally your small-cap call. it's blackhawk network california-based provides of

things like gift cards and prepaid telecom on cards bimo up to outperform, recently met with management, analyst is comfortable with amazon's entry. they note that blackhawk works with amazon and whole foods already. stock was already above 40, so i get it, it's a smidge -- about 15% total return today, but i guess the concern again is if people are not going into stores, would they not buy gift cards? this analyst said, don't worry, it works with everything. crude oil still down over 10% over the past month. here as the continental resources ceo hamm had to say earlier on squawk. >> this is not sustainable we know that, in the 40s, you know, needs tore north of 50 for sure, and to be sustainable in the world.

while this period of adjustment is going on, producers don't want to drill themselves into oblivion. >> so can we head back above $50? and what happens if we do not. let's bring in den knit gartman. always good to see you. >> good to be seen. >> we're at this point in oil where it seems like everything that should be right is wrong. we have the dollar down here to date what's your bias now >> it depends on one's perspective. if you're talking 20 years, lower still. i'll go with the deputy crown prince of saudi arabia, muhammad bin salman, who has made it abundantly clear that he thinking crude oil in the next 20 years will be essentially worthless, perhaps we could get a rally in wti back to 48, maybe

$49 at the best, but given the fact you have a positive carry from overnight to two to three years, if you have wti back to $48, two years forward would be about 51, 52, and drillers would be more than happy to supply all that these possibly could, sell that forward, earn the cotango and produce on mr. hamm is one of the fathers of fracking, he is a genius, and the country owes him thanks for doing what we have been able to do, which is turn the united states into a net supplier of crude to the world, but i think he misses the fact that we're not the only people that will be fracking. >> let's remember one of the outcomes of the president trump visit to saudi arabia was all these deals with fracking companies. halliburton and schlumberger bay be exporting some of that technology, good for the companies, bad for oil prices, but i noticed something, roberto

friedlander, an analyst at seaport global, iraq is now sending nearly as much oil to the united states as saudi arabia iraq on the ascension and just blowing through every barrier that anybody trying to set for them. >> take a look at what's gone on in libya. >> libya as well >> a year and a half ago they were producing a quarter of a million barrels of crude oil, now 950,000 barrels of crude oil per day. it probably will get back to what it was producing four years ago, nigeria is coming up very quickly. there's a real problem out there in the crude oil market. you will get a rally and the market is rallying today, it is nothing but a dead cat bounce. i see we have nearby wti at near $45. we might get to 48, but that's diagnose to be hard-pressed to push beyond that much at all. >> it's energy week in

washington and the president is expected to make a speech at the department of energy storm with the focus expected to be on exports of crude ago well as crude products i'm wondering what you think the impact would be on this market >> first of all, isn't it amazing we are now talking about the united states being an exporter of crude oil, being an exporter of in when i was in undergradual -- dennis, i'm sorry to interrupt we're going to break in to show some video of the president welcoming the world champion chicago cubs let's listen to his remarks, also about health care well, i guess that was -- that was a nice little event. we missed the moment where he was asked a question about health care. obviously his answer was quick and short. back to dennis and let him finish his thought what do you want to do, folks?

let's go to the tease. thank you, dennis. we're sorry we had to interrupt. what do ceos want from the president? can president trump deliver? he'll be right back. there he is again. created, e first stocks 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? don't put off checking out your medicare options until 65. now is a good time to get the ball rolling. medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in.

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hi, everybody. here's your cnbc news update president trump thinking the senate is getting close to passing the health care bill he made the comments during an energy roundtable meeting at the white house this morning >> we have a plan that, if we get it approved -- this is very tough. every state is different, every senator is different, but i have to tell you, the republican senators had a really impressive meeting yesterday at the white house. i think we'll get at least very close, and i think we'll get it over the line. >> a national oceanic and add moss spheric satellite capturing the moment of a gigantic solar eruption on june 19th. a noaa spokesman says it shows the ability to track potentially dangerous space weather. the clippers have reportedly agreed to trade chris paul to the houston rockets, paul agreeing to opt into the final

year of his contract to make the trade possible thele receive a 2018 first-round pick michelle, back to you. we are 90 minutes from the closing bell you almost 73 points, the on, jpmorgan raymond james among top. crude prices have been trouble finding footing today. 1 a small billed in crude, and

it like looks the market likes this expectations have been adjusted the draw is a better build also supportive, down 100,000 barrels a day, that's constructive, but the market knows it's still not enough. session high 44.84 i'm being told that volatility is expected this week. kpm going latest survey showing that being pushed back inned stall of tax reform. live at the kpmg limp summit with the company's ceo lynn dowdy. >> we're on the putting green at the putting field we're here for

the women's leadership summit. there have been some stellar athletes and excelling tiffs here, and lynn dowdy, thank for you being with us. >> thank you. >> we're here at the women's leadership conference. i want to get your thoughts on the state of women in business you have previously said it's a great time for women in leadership roles, but given some of the turbulence we have seen particularly where i report from, san francisco, are you surprised about i what you have seen what are your thoughts on the state of big right now >> i think when you look at what's going on in your environment around us, where businesses are but disrupted, technology is changing the fundamental business models, innovation is probably -- well, we actually know it's the top of the list for many executives so when you're faced with how do you be innovative? you need the most diverse teams, you need different perspectives, so i think it's more important

than ever having women in leadership positions being the most collaborative, looking for what does your ecosystem look lie. women are in a great position to take advantage of what's going on in the marketplace. i so at the with executives i talk with, that diversity inclusion is in the forefront and what will make business successful. >> are you surprised by some of the stories that have come out of the tech community as far as the challenges this. >> i think there's challenges in all trying, we're looking at how do you get more women involved in stem? it has to start young. when you look at the pipeline there are certainly some trying that are challenged. both of my kids are engineers, a son and a daughter when you look down on that stage and you see the women going into engineering programs, we have work to do it actually needs to start in high school to get more kids interested i think you were sharing with me earlier some of the -- maria

barra was talking about getting more emphasis around girls who code i think all of us are foulke cussed on that. >> my colleague michelle -- >> you do a survey every year of ceos, just released it, a big surge in optimism last year. why? >> i think a lot of that has to do with optimism in the u.s. around the pro-business agenda, that they're hoping for. we haven't seen it yet, but i think that the ability to have maybe regulation that's going to be favorable to business and other pro-economic measures is spurring some of the that optimism i think we're also see top of the agenda is around new emerging technologies, the importance of innovation, and so companies are looking at it from the sense of, although things may not be perfect yet, they're

seeing the opportunity for there to be advancements, and they're putting a lot of emphasis on innovation as a result. >> lynne, i'm curious, i see the same thing as you see on one item or another item or another item, whether it's tax reform or what have you, but it seems the underlying feeling behind this optimism is that business is in the middle of a less regulatory regime, it has a friend in washington and near the admission or that's the case

where any of them are delayed. that's a long question, but i think you gelt the sense of it i do get it they're looking at airs of technology, how that will change, they're looking at ways how to innovate and have a culture that will allow innovation to take spark and change the way they're thinking about the future of their business though place of business they're not in belief that tax reform will happen in this year they're sticking to the key as deal -- you saw amazon and whole foods,

the blue apron ipo, though at a lower than than initially expected is that going to -- >> when we looked at and asked the ceos and survey about m & a and what that outlook looked at, it was not in the top list of the five priorities for them i'm not sure about what the deal volume will be look in the future obviously it's been stagnant as we looked over the past 18 months or so you might see some big deals, but those big deals are being spurred by what? this disruptive technology and how are you digitizing your business in new ways i think we'll see more deals on par with that agenda of, you know, whats a digitized business look like in the future? >> thank you soech -- >> deer ra, are you going to ask her the question you e-mailed me >> i asked her before -- >> do it

>> what's a hokie? >> lynne is a hokie. >> lynne is a hokie, so is brian sullivan us hokies stick together. >> you'll have to explain it to us, brian. >> lynne, thank you. a big banks about to get their report cards from the fed. those stocks rallies today ahead of the results we'll tell you who will come out on top plus the dollar is at a seven-month low. "power lunch" will be right ba ck online u.s. equity trades...

♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪ at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

this afternoon, the second report will be released. buybacks, increases in dividends. let's bring in jason goldberg. good to have you here. >> good afternoon. >> so people wait for these stress tests, because this is the moment where finally the fed has said, okay, you have enough capital, so now you are allowed to do other things with it, presumably return it to shareholders you cover a big pile of banks,

what percentage of these banks are going to raise their dividends? >> we think almost all of them maybe one or two back in focus, but essentially every bank we cover will likery release their dividend and every single bank we cover will come up with a share buyback, buying back 5% 6% of its stock >> over the last year there have been tremendous runs in a lot of these bankses morgan stanley up 80%. i mean, huge, huge moves how much is already priced in? >> the stocks has certainly outperformed last year, but year to date is barely budged if you look at the relative pes versus where they were prior to the election, they haven't moved, either, so you have seen upward visions in part due a better interest rate environment, and in part just due to hopeful you get some of

the this regulatory rollback, cap return will be quite substantial. we continue to be constructive looking out. >> but the group is moving today, jason >> you know, absolutely, but you know still as of late, you've till seen some improvement in the yield curve this week, which has certainly helped our coverage is $120 billion or so of capital can be returned to shareholders next four quarters, that's up 25% from the last four, and, you know, the group will still have a lot of excess capital that either guess deployed back. are think any banks in your coverage universe that are at risk, perhaps a wells fargo? this is the qualitative part of the stress test. >> certainly there's some concerns around that name, we kind of think about a stress test qualg at a timive per spect continue on capital return it doesn't have that much to do with sales practice issues, you know from a capital standpoint, while certainly not good from

a -- a, it hasn't had that much impact on their capital. b, they were taken a lot of measures it came to light. >> could this be a sell the news event, jason >> you know, if we look at the last several years, the last six, i think the group underperformed at the last four, last year they outperformed, but that was after brexit, so heart to tell. >> it's something we'll warrick over the next couple days, perhaps over the next 12 months, we think the group has the capacity to outperform. >> jason, good to have you, as we watch for those stress test results. the dollar index falling to a seven-month low, what is the message the currency market is sending stocks chas, how much are you looking at the dollar and what is the

dollar telling you about the state of stocks right now? >> what the dollar is telling me is that global growth overall has been very good, in excess of expectations a bit of a slowdown and softening here, but nonetheless on the e.m. side as well as on the developed side, it has been positive that will have positive implications not only on s&p earnings, but also on revenues, so boris, you're the on currency guy. what's behind it >> lower positive, because they source everything this dollars and sell everything in euros but something else is going on in the currency market that perked up my ears. we have sees a maggive nick in volatility i wonder if that's a precursor

to an increase in volatility to the equity market. that is not really good news i think there could be a message there that nobody is anticipating now >> one thing i would just say is that the central bank community indication from the ecb had a substantial reasoning behind all of that volatility, and you can anticipate that in the coming months. >> chad and boris, thank you very much. for more trading nation, we do two a days, go to cnbc.com. blue apron expected to go public tomorrow. the company now faces a lot of competition now in the meal delivery market, ahead of one of those competitors will join us next >> announcer: and now the lading from tradingnation.cnbc.co [vo] when it comes to investing,

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public tomorrow. the service space is competitive. aditi roy looks at the winners an the loser >> that's a nice play on words there, and we'll continue with the puns the market is definitely poised for a food fight blue apron is tapping into a trouted market that could reached 66 billion by 2021 just check out the competition plated, hellofresh is valued at $2 billion euros but had a down round and call off the ipo, then there's freshly, and achieve'd, and unilever backed sunbasket, but also some notable companies have gone belly you have spring once valued -- shut down, so did maple that was backed by david chang

and launched to much fanfare, but if burned through cash quickly. and then there's munchery, once valued to $275 million it's gone through layoffs and recently -- but the company's ceo tells me that munchery was profitable in all of its markets in may, a first for them, he says what are the ingredients for success? industry watchers tell me many use conventional mail rather than kurtiers for delivery, driving down the operating costs, but some experts athe biggest threat mike the combination of whole foods and amazon thank you very much. >> as aditi mentioned freshly is one of those competing, just announcing $77 million funding led by nestle. michael wisetrack, the ceo and cofounder of freshry

>> thanks for having me on. >> we were chatting before this is different from the meal delivery services that we were talking about in the context of blue apron these are cooked meals you are delivering >> yes, almost everyone you had on that list was in the meal kit kit space which is raw ingredients that you're cooking yourself ours are all precooked for you, big, healthy angle all of our stuff is all natural, 85 band ingredients, no artificial flavors or sweeteners >> how much did the cost break down to? >> 8.99 per meal we're actually in line and slightly cheaper than the meal kit guys just takes you three minutes, heating up the meal, and you're ready to go. >> why don't i just order on seamless i want to cook a meal and i don't want to cook it, i probably don't want to heat it up either. >> well, there's a few things. so one if you order on seamless, you're waiting 45 minutes. if you go to your fridge and ready in three minutes, that's more convenient. the bigger thing is cost

8.99 for a meal, where if you order seamless, savage 15 if $20 per person i think the final thing is health, right? so, you know, you know when you order off seamless, you're not getting that healthy meal you want we're taking care of that health component for you. >> your subscription, right, as opposed to -- i use them and i pay for a meal, i can order it and run for six. >> yeah, we're a subscription. >> so i pay per meal >> so with that you're paying for a meal we're a box. so anywhere from 4 to 12 meals per box, it's shipped directly to your door, just like an amazon box you get at your door, and you load up, your food's good for seven days, it's fresh, never frozen you heat it up and ready to go >> how worried are you that amazon and whole foods, whole foods has a lot of prepared foods, they're just going to box them up and reach out and punch something. >> so i'm not worried at all first of all, we're huge fans of

whole foods and what it has done for the industry as far as moving healthy food forward. so, the reality is, amazon and whole foods combine make up 2% of the food market, right? so you look at that, it's a $1.2 trillion market. i think we're excited that consumers are going online and they're now getting better, healthier options to get food offline. that's an interesting move >> what have you learned about consumers? we just did a segment earlier today on health care costs, a large part of that is our obesity crisis, in america so you serve food to people. what have you learned about the american consumption and attitude around food >> well, i think so one, the american consumption has changed. more importantly, the food -- the people making food, their responsibility is changing and i think this is something whole foods started 37 years ago which i love -- the responsibility of saying hey, look, we're going to be the first people, we're going to deliver the right food to you. 30% of americans are going to be obese by 2030, 66% of americans

are overweight the biggest health epidemic is going to be waste. so, it's certainly got to be on us as the consumer, but it's also going to be on food companies. and i think that's freshly, that's whole foods, that's a lot of companies generally we're excited that the food market is moving healthier. consumers are getting more and more healthy options when you look at what is happening with whole foods, walmart, amazon, they're all moving in the organic pot. they're getting more healthy options. >> are you surprised at what appears to be a lackluster desire for blue apron? >> well, i think so the interesting thing will be, with blue -- >> ipo, their product. >> i saw the ipo product down today. i don't know if i'm the right person to comment. i can say that i believe strongly that in a long-term play, blue apron's going to be an amazing purchase. >> how are your revenues doing that's question one, number two, what is your burn rate $77 million with nestle. must be burning through cash

>> those are great investor questions, we don't give out either our unity economics are some of the strongest if not the strongest in the industry. delivering a better product than the consumer and making sure that the consumers love it >> i use one of the meal kit services, i was saying earlier, my main beef, not a use a bad choice of words is that the amount of time they say it takes to prepare, that's not really reflect the amount of time it takes me or my life. if the food thing doesn't work out, go on the bachelor or bachelorette great smile. >> i'm single. >> win >> i appreciate that i think -- >> but can you cook? >> no, i can't i am our ideal customer. >> you cannot cook >> i cannot cook >> he heats them up. >> are you -- here's the sort of semi -- >> producers want to meet you by the way. >> they're female.

>> happy to meet them. >> are you -- it's hard to follow that. i think i'm stumped for the first time speechless >> ever. >> are you going to go -- >> logistics or food >> food at scale is logistics, and i think we'd like to say we're a health company first and foremost whing you look at what is going to deliver a meaningful impact on the health of america over the next 10, 20 years, it's going to be on people like us, food companies that will deliver a better thing. >> when you date michael, he brings dinner. >> i show up with dinner absolutely correct >> hey melissa, we're the test love eat, she'll love that >> melissa, we are the tesla of eating >> all right, michael, thank you. michael. check please is next and your e-mails and tweets about whether to consumer drugs as should be banned. >> michael, thank u. oduc it.go lk.yo

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the first hour we asked you if it was time to ban direct to consumer direct advertising. here's what you had to say as a pharmacist, i see patients leave their doctor until they find one who will prescribe tv

ad sad. everyone says sad now. bill weighed in, no, transfer information, always figure your position, knowledge is power mark writes, drug companies should most certainly not advertise the general public, public has no idea what's in their best interest. james says, how much are the drug companies spending? they could not advertise how much lower could their drugs be? i think it's like 6 billion is the -- much more than that anyway finally a tweet from ron, yes, it should be banned for a variety of reasons it does more harm than good. can you also get rid of the mattress salesman? random >> twitter this is twitter. >> knowledge is power. i think that's the important part >> absolutely. >> do what you want with the information, but have the information. >> this idea that people should have less information, it's bizarre. >> bizarre >> you brought this up won't be good for our industry. >> the advertising went away >> we'd lose -- >> every commercial break during the football game is like beer,

burgers -- >> the two -- >> and magazines they have to buy two pages, not just one. >> right >> sometimes three >> all right i'll see you tonight, jeremy pipen on set thanks for watching power. "closing bell" starts right now. all right. am i ready for this? we have a lot going on >> we have a lot as we like to say on this show, we have a lot of show today. >> welcome to the closing bell >> we're going to get to this exciting information. >> i'm sitting next to a mound of produce we'll get to that later -- >> oh, i thought you meant me. i'm bill griffith, the mound of produce. fedex by the way if you haven't heard revealed this afternoon a key issue that could show up on the next earnings report we're going to tell you what this is. the stock was holding for a while. now it's