erevybody else is. but the studios are a gem, and it has ""spider-man 3."" i think that's a good one to own. >> a good one to trade >> i gave you this last week, albamarle. >> emb is an etf it's come under a lot of pressure i think it offers value here >> thanks for being here "power lunch" starts now >> welcome, everybody, to "power lunch. i'm tyler mathisen here's what is on the menu amazon at it again shares of best buy heading south on reports that amazon plans to roll out a rival to best buy's geek squad service the man behind this report will join us live he watches the geeks and bill miller back on top of his game, but some bears on the market, in the market, are growling is the market getting copied and if you can't beat the rise of the machines, how about joining them we'll introduce you to one fund

that is surging thanks to all things robotic "power lunch" starts right now ♪ >> welcome to "power lunch." you can see stocks are higher right now. the dow is trying to avoid its third loss in four sessions. the s&p 500 will be up for a third time if it can finish the green. right now, it's higher by five points not just best buy that's taking a beating, other retail names also getting hit dick's sporting goods, kohl's, nordstrom, all off between 3% and 6% >> here's what else is happening at this hour tesla firing back at reports that sales in hong kong came to a halt this after a tax break for electric cars was slashed.

tesla says its business does not rely on government policies and the hong kong government will continue to be strong. but for all you traditional car drivers, the average gallon of gas down to $2.31. all you people in south carolina can smile. you had the lowest average cost in america at $1.93. more people are hitting the skies, as well southwest airlines says passenger traffic grows more than 3.5% last year. shares of love down 1.5% tileer we begin with one of the big stock movers, best buy the retailer getting slammed down about 6% today. rico reports that amazon plans a rival to best buy's geek squad service. joining us is the reporter who broke the story for rico, jason delray welcome. food to have you with us >> thanks for having me.

>> so what do they plan to do and how tricky is it going to be to do it >> there are two pieces of this. they're hiring in-house tech experts to provide in-home consultations for free, specifically focused on how best to use the alexa voice assistant. a lot of people are buying these echo devices but don't know what to do with them. the other piece is they're charging people to set up smart home devices like thermostats and lighting systems that integrate with alexa so it's a push around the smart home because the alexa is perhaps the future hub of the smart home so that's sort of the two main pieces of it >> have they been finding, i guess, that people just don't know how to use alexa? i use it sometimes, but i use it to find out how tall is richard

jefferson? how much does lebron weigh >> because you're such a basketball fan >> me and my son >> yeah. you know, they're not commenting at all about this right now. which is a little unusual, because it's already -- these services are already alive in seven west coast cities. but i think largely the industry is finding there's a big educational gap between where the smart home and voice assistance technology is, and how people are actually using it >> jason, when i read your headline, i thought oh, this is to get over the hump of the whole idea -- ithought it was about installing big tvs you walk into best buy, the thing is enormous. they set you up with an installation one of the down sides to amazon ordering is lack of installation so maybe it would go to a geek squad. are they doing that, as well >> yeah, so i think over the last year or so, they've been

letting third parties offer different types of home services on the amazon platform, including tv installation, my brother-in-law actually just hired someone off of amazon. >> and that's third party, right? that's not amazon itself now it's amazon itself >> correct they're billing this as they're hiring amazon employees. the job listings say preferred qualification is experience either as an apple genius bar worker or a geek squad agent as they're called so it says a lot -- >> those aren't installers, are they if >> they're going to do -- >> hang your tv? >> they're specifically focused on installation of smart home devices. thermostats, sprinkler systems >> jason, do you think they're going to be able to find the workers for this, especially in

the markets they're in they've got to pay these people. >> that's the thing. you would think if they're going to hire them away from apple and best buy, they might have to pay better like i said, there are job listings showing they're looking to hire ten more cities that i found, including dallas, miami, las vegas, i believe houston, hoboken, new jersey was another one where i saw job listings so that's a big question if the service doesn't live up to sort of the hype, it may be a step back. i will say the reviews, there are 500 reviews for the free consultation right now on amazon and i think the average rating is 4.9 out of 5 stars. so they're doing something right in the initial markets but can they scale it is a big question >> good story there, jason thank you very much. we'll see you soon >> thanks for having me.

congress back to work for three weeks before taking off again for the summer recess. the question is, will this be enough time to pass what president trump called a beautiful new health care bill let's get to kayla on capitol hill >> reporter: the president said he wants it fully approved, meaning not just a senate vote but a compromise that would win house approval that's a tall order with divisions deepening during the last week of recess. here's where things stand right now. there are still about ten no's from the senate. there were nine before the recess, including ted cruz, who appears willing to make a deal there were two additional senators who have since said they're not on board with the current draft. a new version of the bill is expected earlier this week, as early as tomorrow that would require a cbo score. if there is a vote, if leadership decides the bill could pass, that would take place over the next two weeks. some lawmakers, including a

handful of republicans, are looking for a bipartisan alternative. among them, mitch mcconnell said if the bill doesn't pass, the priority will be to shore up the affordable care act exchanges. some skeptics say that's just posturing on his behalf. senator chuck grassley said that the consequences would be more dire, tweeting over the weekend, republicans won't be ashamed, we will go from majority to minority there are three weeks between now and the august recess. it is clear the white house wants a win out of capitol hill. but it's unclear how the white house plans to shore up the bill if it does gnlt involved at this point. back to you. >> thanks so much. we wait to see what happens with health care reform. that means tax reform gets delayed. what happens from here joining us, sarah taggefaigen

sarah, are republicans going to blow here? >> it looks like that today? we'll see what this new health care bill looks like but i don't think failure for republicans is an option i don't think that they can present themselves on a ballot in 2018 if they have not solved the health care situation. and there is a lot to solve. obamacare is failing in some places my home state of iowa, for example, has one insurer in most of the state so they do need to do something. >> in an effort to do check a win column, larry kudlow has argued do corporate tax reform first. we heard at one point, mitch mcconnell was thinking, you know, we're going vote on health care one way or the other. the thing dies, at least we can move on. that seems to have disappeared and they're still mired in this. should they drop it and move on to something easier?

>> i think they should definitely get tax reform done they should have focused on tax reform first, because there's more consensus around it, and wins produce wins on capitol hill failure on health care will make it more difficult, i think, for tax reform to get done, or anything meaningful. but i think that's one of two options republicans have right now. you figure out something on health care, and you get it done one way or the other, and you claim victory. or you go out to the american public and say, this has been very difficult it's a complicated issue we've been spending decades on this issue and haven't come up with a viable solution, including obamacare. and we're going to put eight senators on it, eight house members, some number, and we're going to spend a year studying it then they have to come back before the election and pass it. >> the republicans have had years. they've been complaining about health care for years, so you

think they would have something in the hopper. but what's the rush? politically, is it important to get something done before x date versus get something done that solves some of the problems, however long that may take >> you said it, i didn't they have -- they've been really very strong in we have torepea obamacare and replace it that's been a battle cry of the republicans and obamacare was unpopular. now we've seen a turn around in that situation i think sarah offered a lot of wise counsel there in her comments it is now crunch time for the republicans, and for white house. sequencing in any administration, particularly in the first year, is crucial in our case, it was the economic deficit reduction plan, and we barely passed that in the house and the senate we had to get that done to lift off with the rest of the agenda. that's what the republicans are facing but health care is such a complicated, difficult, but yet

personal issue i think at the very least they will have to shore up the exchanges if they're not able to come together with a comprehensive bill should they have been ready with a come pprehensive bill? the answer is yes. >> what role should the president and the white house be playing here >> he has to be active he's got a lot at steak here he must look to mitch mcconnell and paul ryan. but the white house has got to be active. i think sarah would agree with that the president has to show some leadership he campaigned on it as well during his campaign, so he should be ready from a policy standpoint also. >> he should be driving it frankly. >> is he that kind of policy wonky guy? it doesn't seem like -- he's much more of a big picture thematic person. >> he's not the only person that hasn't been a policy wonk, but he has a lot of smart people

around him and i do think the white house is going to produce a tax reform package that they're going to drive. that will be a bright moment for the trump administration, and possibly something, if they do put that out later this summer, helps them turn a corner >> one quick question, is doing tax reform putting the horse ahead of the cart in the sense that unless you know what your health care sort of budget cost is going to be, it's very hard to do a tax bill that makes any sense. >> that's the theory that you had to get the health care bill passed, because it was pressing, and it also set up the tax reform bill. that's exactly right but i think now the republicans are where they are you have to move forward and resolve health care one way or the other. again, a very personal individual issue with every american >> is there a fix? what if there is not a fix >> i think sarah outlined a

pretty good plan b >> it's going from 5% to 17% of gdp, 4.6 billion prescription drugs doled out last year. obesity is at 30%. what if there is no fix? >> well, i think there may be -- it's possible there's no fix right now in the near term i hope i'm wrong, but i'm not sure that i am i think the very least, at the very least the republicans and hopefully perhaps with the democrats participating, do something to shore up the ex-chanex exchanges. we have not found the right approach of building a bipartisan consensus on health care even with all of the very important points -- >> there are probably fixes, not just bipartisan. thank you both >> michelle, if there are fixes, they will not be popular >> oh, no. >> they are not going to be popular. on kek, betting big on

robotics, and how investing in a robo etf is trouncing the overall market but this is not what you think we'll talk to the man behind it. but first, small investors piling money in the stock market in a big way so-called smart money of hedge funds. that's next. (baby crying) (slow jazz music) ♪ fly me to the moon ♪ and let me play (bell ring)

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welcome back bill miller is back on top again. his flagship fund is outperforming the competition by nearly six percentage points has this come down to one or two stocks >> it's a handful of them, but they are deeper value plays in some people's minds. bill miller's year-to-date performance for his fund, his opportunity trust, is 20%. that's just year-to-date beats the s&p 500's 8% here. the one year, the last 12 months, is up 48%, a considerable margin there in terms of the s&p 500's 14% gain. we took a look at some of the heavier weighted stocks. some of them have done really well over the past 12 months way fair, a 3% weighting in his funds, up 111% year-to-date. restoration hardware, one of the

stocks picked eed up on the ch up 104%. amazon, we know that stock is up 31%. and american airlines, delta as well, those are some of the older holdings they've had for a number of years. that stock is up 14% year-to-date so a sampling, if you will some of these beaten down retail names have recovered a lot, doing really well for bill miller and his funds >> thank you very much bill miller may be crushing the markets. so can we keep heading higher and where are the opportunitying here or elsewhere? so brian, you began last year with a fairly optimistic forecast for stock prices, and a lot of it has either been met or exceeded now halfway through the

year what do you see for the next six months have we nipped at the peak >> we may have, because at the end of the day, we need to have fundamentals grow into the market stocks, prices led our best case target is 2500 until the market exceeds that number, we're not going to adjust or if we see a pullback, we can be more advantageous with what's happening. but our longer term bull market remains in tact, tyler the problem that we have with the market right now is there was a lot of optimism coming in at the beginning of the year, now we need to see earnings grow we have seen company managers be more conservative. so the summer doldrums haven't hit quite yet. >> we're eight years into this bull market, right >> yeah, eight years into a

20-year bull market. on the private client side, the people we talk to are not engaged yet. maverick is not engaged with respect to coming into the market this has been a momentum driven market and mom and pop in lincoln, nebraska have not been playing yet. >> steven, you have a view that leans towards emerging market equities right now i assume emerging market debt, as well. explain your thesis. >> even clearer, you're looking at u.s. stocks, which we have fully invested in, hanging on to their highest share of global market capitalization ever valuations are high, but i think you'll see double digit earnings gains for u.s. stocks this year, that and low interest rates and you're looking at a good return environment. when you look at all regions, you're looking at slightly below valuations from a long-term perspective. and you have fixed income and interest costs that are just dra

matt chi hi-- dramatically highr these are the types of readings which make us invest there in europe, we would very clearly favor equities over fixed income >> what about the whole idea -- we just showed bill miller outperforming. val is bill miller, doing what he's doing, is that a sign of the rotation should we follow that idea and switch out of momentum and growth and go into value stocks here in the united states? you are nodding you are head up and down, brian. >> yes what's interesting about the positions you show from bill miller, he's a big financial sector holder. when you look at the value part of the market, the best intrinsic fundamental value are coming from u.s. financials.

so they're increasing dividends. we think that's going to be the place to be for the next three to five years. >> steven, last word to you quickly. >> sure. i think that u.s. financials standout as the best value cyclical stocks. when you look at companies that are changing their industry, that are growing very rapidly multiple years until they're a dominant force, you'll find that post summer rotations, a lock of row men tum and professional investors trading around, these are long-term generators >> brian, steve, appreciate it stocks have been tanking after going public very rocently, but shares of blue apn getting a pop today. that's next here on "power lunch. you too, unnecessary er visits. and hey, unmanaged depression, don't get too comfortable. we're talking to you, cost inefficiencies and data without insights. and fragmented care-

stop getting in the way of patient recovery and pay attention. every single one of you is on our list. for those who won't rest until the world is healthier, neither will we. optum. how well gets done.

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but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn. welcome back a u.s. judge has given approval for a wells fargo settlement for its fake account scandal it will pay $142 million for customers whose credit was hurt. it involves claims involving credit cards and loans between may of 2002 and april of this year wells fargo reached the feel back in april. it just needed to be approved. the bank still faces probes from federal and state regulators, as well as several private lawsuits our next guest says the next wave of technology growth is coming from robotics, a.i.,

that's artificial intelligence and automation robo stocks, you see it there, we'll discuss. and countdown to amazon prime day. how does the company pull off the logistics. in just a few short hours, more than 25,000 packages like these will be loaded onto this boeing 767 cargo plane meet amazon prime air. that's coming up on "power lunch. whoooo.

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seattle, wheregearing up for thy the prime program has seen incredible growth over the last more than decade that it's been launched subscribers have doubled in the last two years alone so how important is the prime ecosystem to amazon? subscribers on average spend nearly double that of

nonmembers amazon doesn't disclose its numbers, but at 85 million, the program is on pace to become more popular than cable tv it's also creeping up on the number of costco card holders. so the goal of prime day isn't just about deals and discounts, but bringing more customers into the prime ecosystem. and increasingly, that ecosystem is beyond more than just shopping on amazon.com, but streaming music on prime music or listening to books or asking alexa to control your home the idea is that the deeper you get into amazon's full, the more likely you are to buy more, the less likely you are to shop elsewhere. this is all part of the plan to make it irresponsible to not be a prime member >> thank you very much i joked on twitter we should call the day after prime day unboxing day then it's wednesday feast for

recycling. dealing with the boxes and the styrofoam and the bubble wrap is something we they have talk about. >> new construction in new york city, they now build much bigger storage room for mail for all the boxes that get delivered >> i do have a question. do doormen get bigger bonuses now because they have to deal with so many packages? >> probably. because you rely on them so much more than you used to. >> what did you get me for prime day? >> it doesn't start until 9:00 we're going to watch the home run derby and go on prime. for prime day economics to prime day logistics, with 100,000 deals rolling out every five minutes, how does amazon pull it off? morgan brennan takes a closer look >> reporter: hello and take a look at this this is a boeing 767 and has been outfitted to fly free, and

one of 24 amazon planes that will move goods as it looks to deliver the prime day deliveries within 48 hours. this is part of the latest step in a strategy to build out an in-house transportation network at amazon. that including thousands of tractor trailers, dozens of automated warehouse and drones, which are likely years away from making commercial deliveries dave clark, amazon's vp of transportation, says that having an air cargo, ship mements can e flown direct and can shave upwards of 12 hours off of a sipment's journey. so no comments on the long-term plans to grow the prime air fleet beyond the 40 planes that will be in operation

but clark does say this will add capacity on top of the long-term contracts in place with ups, fedex, and the u.s. postal service, rather than this being a move to directly compete against those shippers guys, back to you. >> at least for now. we'll see. >> morgan, thank you your next guest is betting big on robotics, something amazon is also doing, but he's betting big on companies betting big on robotics. he built the robo etf, composed to companies closely around automation one of the biggest holdings is a company that makes drones. this has worked out well, the etf up 19 yeear-to-date bill, the idea is interesting. i guess i would say that every company in many ways is a tech company and maybe uses automation to some extent.

how do you filters companies out? what makes the cut >> thanks for having me. so we just by way of -- we are a robotics company at the time, a lot of these companies that existed were weren't very well recognized by wall street. they were small parts of some company's businesses and weren't identified so we created the first sort of a priority classification system so we defined the company as a technology or an application so the technology is what makes the robot work it's the processing, the computing, the sensing capabilities >> bill, i can understand when of your top holdings is intuitive surgical they make robots to help surgeons do precise surgery.

rockwell automation, they make controls for aircraft. >> they're one of the most d discrete automation companies in the world. we have what's called a bellwether, a 2% waiting, which is 40% of the portfolio. the other 60% of the portfolio is non-bellwether. so to become a bellwether -- for rockwell, you have to have 60% to 70% of your revenue that comes directlyrobotics so this is different where amazon -- obviously they use the technology to enable their business, arguably better than most companies, but they're not making money from selling the technologies >> how are the individual securities, maybe you just said it and it went over my head, how are they weighted within the portfolio, and how often do companies drop out and get added

in based on the idea that they may no longer make some waiting cut? >> right so we we balance the portfolio quarterly. a company has to have a minimum income threshold we have a two weight structure we designed this to be simple and transparent, recognizing that the obvious winners and loses are not very apart >> bill, it sounded to me like there's no single stock can ever be 2%, the initial weighting can never be more than 2% and the others are no more than 1% >> that's correct. we're basically buying the stocks as they go down, we sell them as they go up >> why isn't amazon in there >> in our judgment, amazon is a consumer products retailing company. they obviously use robotics and

automati automation, but they're not selling the actual technologies. so we've created this index to capture the companies that are selling the technologies that are sporting robotics and automation >> how do you get a big bang for your buck if you only get 1% or 2% >> the best approach to this is the index approach looking out the next three to four years, it's hard to pick out what we think will be winners and losers amazon, five, ten years ago was a much different company than it is now it's evolved significantly you guys have covered nvidia quite a bit, which has more c d -- morphed from a gaming technology to a pure play a.i. company, if you will so a lot of these technologies i think are hard to identify, and we really are in the early days of this growth opportunity we think the best approach is to be invested across the entire

ecosystem. >> okay. it certainly is a modern idea for sure thanks, bill >> thank you heins craft, are they going to make another attempt at buying uni lefer there's a 75% chance they'll mount a hostile. mount a hostile. that's ahead she can't become a guitar legend just by playing air guitar. the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there.

unile welcome back to "power lunch. we have a couple different mutual fund tied funds reporting some previously undisclosed stakes in the food delivery service. blue apron, capital world investors, they have a passive steak disclosed of 13% and fidelity reporting a 44.88% steak. blue apron trying to find some

footing, but this is not necessarily new steaks being taken, just some investors now saying they own shares in the stock. back over to you >> so 57% of the company is owned by just these two firms? >> a couple of mutual fund type companies. >> thanks, john. mid february, kraft-heinz walked away from a $143 billion to merge with unilever but is another attempt in the cards? a new note out today says there's a strong chance. joiq joining us now is pablo zuanic you got a note out today that you say there's a 75% chance that they mount a hostile for unilever make your case >> that's right, michelle. first of all, kraft-heinz is the rollup story of the cgc space.

yes, they were rebuffed by unilever, but according to the anti-takeover law, kraft-heinz could come back with a hostile offer by the 20th of august. there's three reasons this could happen number one, they need to do another deal for the stock to continue to work it's a roll-up story warren buffett owns about $30 million worth of shares with kraft-heinz. >> i'm going to stop you there warren buffett doesn't like hostiles, he likes to go where he's welcome wouldn't he be against a hostile in his nature? >> that's right. we have addressed that in the note the issue here is that hostile is when you go directly to the shareholders and ask them to vote on a transaction. we think there would be room here to negotiate. at the end of the day, shareholders would be looking at

50% return year-to-date. unilever has taken some actions in terms of share buybacks >> so bring that to a purge share price. you think there's going to be potentially a hostile that happens. how much will i get per share? >> first of all, you have the euro share, and you have the pound shares so you have to take a 20% premium to wherever the share price is right now but in dollar terms, it's a $200 billion deal >> so $90 per share? >> that's what you would be getting. that's a 20% premium >> would that bring unilever to the table? >> from our point of view it will at the end of the day, we think that unilever, there's a good offer on the table, and there are other risks out there of further reconciliation into

space that unilever would want to talk to kraft-heinz warren buffebuffett's game plan invested in a company and he lets the management run the company. >> they go in, they cut like 95% of the costs, and go on. so pablo, anything in your thesis that makes unilever attractive on its own, or is it just a size and cost cutting story? >> it makes it attractive because it's big there's not that many big assets out there. so it's a global company kraft heinz is 80% america exposed. and three, it allows them -- we think kraft heinz has enough exposure in food and they want to diversify but here the wigg bigger pictur this is a rollup story of cgc.

they have done seven deals over the last 15 years. they might have been rebuffed, but they always went back and got the deals done we think the same thing will happen and they'll find a way to bring unilever to the table. >> thank you, pablo. cnbc kicking off its countdown of america's top states for business. scott cohen joins us from the stop state, which is still a mystery. >> do you hear program it just died >> scott, can you hear us? >> his feed just died. >> scott cohen, you need to leave. >> we got him back >> things about doing stop states over the years has been -- it's like an economic indicator. it's not something that we expected going in when we started this in 2007 but really you follow what we've been doing over time, and you

can really get a sense of where the national economy was going so we started this out in 2007 the inaugural top state was virginia everything was booming the housing bubble was in full inflation, so to speak and then things started to crash in 2008, already by the time we did the study that summer. then it got kind of boring year after year virginia, texas, virginia, texas. the governors would make bets with one another for several years. but then we start moving into the last few years in 2013, south dakota, which surprised even us, but sure enough, south dakota with its low cost and low regulations won out that year. then we started to switch to this battle for skilled workforce. that's where georgia reigned supreme in 2014, with a lot of unemployed workers, but also a high quality workforce minnesota, high cost, but high quality with a great education with a solid workforce last year, utah with its silicon

slopes just outside of salt lake city, the big tech scene there, we've never had a state go back-to-back will this be the year that happens? will it be a previous suspect or somebody new where am i in america's top state for business? up for toda the closing bell, we'll have the first of our diabolic al hint. we want to hear from you from our top states cnbc.com is our website. you can follow us. >> scottback to you. >> good job with that. coming up, before wall street calls, you need to know of your daily dose we know where rick is, give us the bond report. >> reporter: there is not a huge

amount, go to the long end of the 30 years, it is unchanged. we know janet yellen is coming up yield curve on short maturity should be a big trade. but here is one, the dollar yen, it is doing better again today's high of today's 114.30 which would make it highest going back to march. it is improving in the end you can figure out in the rest, "power lchun" returns in two-minutes. you always pay

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the call of the day. first up is costco they point to what happened when the company reported some important sales last week. the stock got hit anyway the firm cutting its price target from 160 to 185 right now it is at 151 >> right now we need to make it official we talked about it jokingly to be amazon, tait is a verb company are getting amazon the analysts say paypal have improved number one, improving in growing

with paypal check in button and changing the cultural of payp pa paypal to an ecosystem about $6 per share upside with today's 2% gain. we are not hereto displace you we are here to help you >> next, we have hp upgraded to huzuho security. right now it is at nearly 18 in par of changing the way mizuho is doing its system and revamping it the firm is seeking for upside of estimates i think there is tail winds in the pc business and some upsides could come from the graphics and packaging business

>> your final stock is juniper networks remember them? they boost from 34 to 31 the analyst, tim long, notes, yes, the stock is under performed but he calls it under appreciated and under valued stocks more credit is given to the switching business of customer strategy it is now 27% of juniper revenues they get upgrades of stock up to 2.5% today, tyler. >> thank you the new discounts of department stores and what those discounts are saying about retail the second hour of "power lunch" starts in two-minutes. moderator: welcome. come on in, have a seat. we invited real homeowners to participate in a blind challenge

comparing two home equity line of credit products: a traditional home equity line of credit, and a reverse mortgage line of credit. we called this the home equity line of credit challenge. our groups learned that while both products let you tap into the equity in your home to help you fund your retirement, there are some important differences. they discovered that there are options for how and when to repay the loans that monthly payments and available funds can change over time and that only one of the products is government-insured. finally, we asked them to choose which product they preferred. product b almost sounds too good to be true. that was a no-brainer. so i'm going to reveal now, what these products are. product a is a traditional home equity line of credit. but the product you overwhelmingly chose... is a reverse mortgage line of credit. never would have guessed it. does that surprise you? it sounds like it does. i wish i'd known about this before i had taken out the home equity line of credit. it's a mortgage, or it's a line of credit,

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department stores are beginning to discount something they never do, what it is and what it says about the worrying state of retail. the summer of hell a new york city area getting set of train delays back of cancellations. authorities are trying to fix the crumbling infrastructure this can be a warning to your town, too. strike out stocks, the name that could bring downyo your investmt

average. "power lunch" starts right now welcome everybody, to the second hour of pow"power lunch." in the green for the most part with the dow industrial is up as you can see there 28 points and s & p of 500 we are seeing some green in fertilizer stocks. maybe there is a lot of growth in them. we begin this hour of breaking news of washington, joining us with the details >> now, this is been a very

controversial topic, the cfpb is saying nearly half of all credit card debt and bank representing 44% of ensuring deposits of used these types of clauses the new rule will stop companies from stepping in the the court and the clauses will allow companies to avoid accountable by blocking group lawsuits if they go forward. now, there is been some questions of whether or not or not the cfpb would issue this rule considering the trump administration have been cleared that they believe that cfpb over stepped its authorities and looking to remove the director and all of these coming as the cfpb issuing these new rules

>> these rules would apply to individuals opening an account with a brokage or not a car company or whatever? >> it is really with anything company. it is something that's focused on the banking sector but cable companies, they are ones that have arbitration causes in the contract now the cfpb is saying if its rules are finalized, consumers will once again from the ability. >> the question we are battling around the desk is financial protection which is basically dealing with as i understood financial services, companies is stepping into areas that are not really financial services. i suppose that you can make a case that any company that's providing a long-term service

like a cable company or a phone company or whatever, could be regarded in some sense of financials >> i believe in some of the documents of the cfpb put out this was requested of looking under the dodd frank >> and playing out for financial institutions, how much more do you have to put aside for reserves if you think you have a lost >> right new numbers showing the despite threats from president trump, more cars are being imported from mexico to the u.s. joining us with the number, phil lebeau >> these are new numbers that came out this morning from the mexico automobile association. it shows that the it is still the number one place autoimports from mexico.

auto imports jumped 15.8% and 1.6 million vehicles that were built from mexico and shipped here to the u.s. this church shows why mexico has become the place in the world for all automakers to locate new plans, that is estimate of 2017 of the number 8, largest auto producing companies in the world. we don't have specific numbers for these guys from mexico we talked about it before, michelle, you have been down there, you cannot turn off these plants there are newer plants that opened up within the last eight to nine months a lot of that is flowing in here and 76% of what's made down there is exported and 76% comes

from the u.s >> mexico have free trade agreement with some country that the u.s. did not you can offer better price on the car on the final market >> correct >> their export to south america and europe and parts of shasia d they're almost up as well. >> is there one car that's primarily responsible for the big jump or is it everybody? >> no, there is not one car. >> it is spread out over a number of them there is some automakers that have rent up production. kia is a good example, it is red hot in the united states and it whatted a pla had a plant opened up here in the united states. there is going to be some vehicles coming in from mexico probably to here and the u.s phil, thank you very much. we know that jobs are strong in america one thing is not, wage growth.

the big question out there is why wages are not growing that much when the economy is growing. >> steve took on that answer >> wages are only rising only around 2.3% and well below the 4% you may expect in a tight labor mark look at who's making the most jobs gained in the market could help the least educated americans have fallen sharply. for most americans with no high school dip employdiplomas at al. education matters a lot for wages. younger workers, they make less in the overall work force and high school degrees of just 60% of those with bachelor degrees

in addition, african-americans and hispanics have growth jobs sharply in the pastsix months. these two groups have lower education level in the white population that could also be keeping a lid on wage growth so mystery solved at least partly what's going on here lower skills and minority workers are the new hires in today's job market that'll tend to drive down wages. >> it is good news >> it is the way job market or the least educated and snort wo minority workers get back to work these areas in the unemployment numbers have been the in tractable one and they have stayed higher and longer this raises a whole debate of how hot the fed run the economy. you have the group like fed up

and others let it run hot and don't react of every width of inflation. if the inflation number comes back down, you react and let it run so you can get the wage game for some of these people the unemployment rate of college educated african-americans is equal to that of white americans at the worse parts of the recessions the notion of the education level is definitely part of it but even if you have minorities making less of the same education level is a problem >> got it. >> steve leisman, thanks >> lets get back to the markets now. s & p 500.

good to have you hooeere. michelle, thanks for having you here >> i do. >> yeah, we think growth is where you want to invest and all the growth is in the emerging markets and developing world, it is tough if you look around the developing world of u.s. and europe and japan, that does not translate to high corporate profits and profits today are the same as they were in 2012 in the united states. so, we like the emerging markets a lot. >> here is the one thing, last week they did not do so well and partly because interest rates started to rise when you look at the ten year yield and 30 years. it is almost actualmatic emerging markets fall because nearly every government in the world has to pay high interest rate because we are the safest fed in the world

when their interest rates go up, their growth, and your under line premise slows down. >> well, that used to be the case the beginning of the year if you look at all the pundants and the u.s. is going to be much stronger that's not the case. emerging markets currencies and bonds would do poorly. what they are missing is that short term rate are -- long-term rates are going down, flattening of the yield curve and not steepening >> we talked about it last week. last week, the yield curve curves -- do you buy the basic premise that if long-term interest rates rise, it is not a good bet >> you don't believe it is going to go up >> now, i think there is a lot

of pressure on interest rates from the killer d's. and demographics are bad in the u.s. and europe and japan and you got too much debt and deflation and not inflation. it is rolling over hard and sub 1% by the end of the year. we are seeing a lot of trends that's going to push interest rates down and going to make growth where you find it that much more attractive you can actually get profits that are rising instead of staggering >> you know, you went to notch da notre dame, is there a stock market here? >> i am on the record that the fall, i wrote this letter called newt newton was right, gravity rules. for every action, there is an

equal opposite reaction. we got far too much stimulus and misalignment of interest and misallocation of the capitol and it builds up this huge bubble of u.s. equities and when it finally cracks and it will happen in the fall and writing about this since january sometimes around september and october, will be trouble >> what is so special about october and september mark >> a couple of things. one is by then we'll have a lot more evidence of a declining growth and growth is slipping. first quarter slip was horrible and second quarter is a little bit better and that's a seasonal thing as we turn back on refiners and only make three things in the u.s. today oil and refined gasoline and auto the second thing is going to happen is people come back from vacation, historically, fall is a weak part of the year and i have this belief that you know we are following the path of

1928 and 1929 when hoover was president and both presidents of no experience coming in with congress and it is all republicans and a lot of big promises and a lot of things don't happen and the fall is when people realized, wait, it has not play out the way we thought. >> mark, yumark yusko, thank yo. >> we'll find out. retails are getting rwrecked today. a summer of hail, is the pain necessary in everyone is swinging for defenses of tonight's home run derby we are trying to not to strike out. we got some stocks you may not want in your portfolio as earning season kicks off that's t that and more on "power lunch. s.

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it's so fluffy! look at that fluffy unicorn! he's so fluffy i'm gonna die! your voice is awesome. the x1 voice remote. xfinity. the future of awesome. check it out, 14 of the 15 biggest money lossiing stock rih now are retailers, macy's are down by 15% and kohl's and gap and best buy speaking of retails, the latest bid for uglyneiness.

last thing they can actually sell, courtney reagan is joining us now for many is a water shed moment for retail industry >> yeah, we have been talking about the you can access of you will ulta and sephora. the beauty is the department stores have not soared along brands successes the department stores have out dated and lower mall and store traffic and will almost everything else in department stores is discounted cosmetics have an off limits, at least until now. >> macy's ceo says kos mcosmetis

under more direct. it is working on expanding its cosmetics area now jc penney ten years partnership with sephora is bigger one and it says it is not going to start discounting cosmetics. sephora and you wiulta don't o s discounts. they have powerful loyalty programs without pushy seawalls associate.

. >> thank you, courtney >> lets bring in our chairman of blooming dales >> michael, let me ask you, do you think this is a smart move or department stores are throwing a hail mary here >> this is not something that's new without throwing any stones, i think probably it is about five years now so i think it is been on the radar screen for a while we are not wrong mr. goldman and having gotten coupons every year and 20% off and blah, blah and tiny little prints said cosme c cosmetics and fragrances are excluded >> a number of years ago, the only time at my 23 years of blooming dale, we did have a promotion of friends and family

and after 27 years, we stopped why the stores are doing it? i think it is a bigger question. questions like manufacturies are doing it and it is done in many product that's why it is in all those years. so i know we are talking about department stores and talking about lack of traffic and still a lot of traffic i really think that the bigger issue right now is why the manufactures are doing it. >> can i answer that question. only because it is what my wife did for a global cosmetics company and dealt with macy's and everybody, we become a market share just push volume and push volume and forget about margins it is not just true with cosmetics it is every manufacturing.

>> this is virtually the last category that those stores are relied upon are full regular price sales. >> that's why we are doing it and it is a big soak >> the view that this cat can be walked back is foolish there is no classification of the department store genre that gone promotional and retrenched and becoming regular price the department stores of your earlier point throwing a hail mary pass here whether it is caught or drop is not going to matter it is not going to change the path that they are on and they are facing accelerating decline. as far as legality goes, back in the day if somebody steps out of line, they would stop getting goods. >> i wear makeup everyday. i did not know anything. i had no idea it was the last

facet of the discounted things >> michael, talk me through to the cosmetics counter of bloomingdale and how profitable is it and what percentage of profit come from it? >> an average of department store, beauty businesses, maybe some where between 10% or 11%. >> on the promotional that was mentioned, there is no lost by the manufactures yes, it can be market shares but the manufactures are not taking any less margins for what the department stores are doing. they're hurting their brand long-term. that's more serious on my mind and taking a shot on wall street from the point of view, it is

interesting that luxury shoe business to luxury handbags, chanel, those are not on sale. there is no question that we cross the river here beauty being on sale. i think it is very hard to put the jeanngenie back in. i did it at bloomingdale's we stopped doing it. we took a hit to the sales line and we made it backup again. it is all about what your long-term strategy is and about the brand and how you want to position yourself. that's the challenges from all the manufactures today from the best to the very small >> who does it hurt more >> manufactures is fine because mike is saying their shipping goods are their margin and they're acquiring more customers because of the price point

>> that does not include potential rebate >> that could badly damage their brand equity >> where is amazon and all this? >> amazon is waiting on the sideline amazon eventually and others like amazon may very well be where distribution goes as the department stores continue to close. >> what we heard of nike experimenting going through them of distribution. if you have a fully developed brand and your department stores or other retail customers have failed you have to be able to access your customers, either you do it yourself through your own website or store >> it is difficult and it is risky because you are going to blow up the relationship with your seller, with the macy's and

the bloomingdale's of the world. to answer your question, these manufactures are so addicted to volume and from what i heard you say is correct and i look at this as 20 years which is every quarter, you better make that number and forget about margins and throw in what you sell fo, r just push, and push. the margin of the manufacturing does not change. the bigger question isra reallys what's happening online. in the department of stores of the united states sells something and kcosmetics are buying into that place, the world won't come to an end once it is online, customers budapest and paris or everybody knows it is on sale and i can

wait some ladiy talking about buying smash box on sale, she was surprised it was on sale at macy's that's a bigger problem. if i say one thing here, i am lessed conce concerned of amazon i think the real challenge today is, all the store wants to save the online business is hurting them some what it is across of what they have not done themselves making the store interesting. making the store experience and the customer east's service spectacular. >> i was having lunch today of what happens in customer service. you guys got to start selling

liquor thanks for joining us. michael, thank you >> moving onto a different product. is apple losing dominant market losing position in one key area. >> it maybe evidence, we'll tell you the area why >> andrew cuomo is calling a summer of hell for commuters along long island. what does it mean for your town even though if you don't live in new york this can be the canary for your coal mind, stick around.

hi everybody, i am sue herera the kremlins say vladimir putin was not aware of the meeting between donald trump jr. the lawyer told donald trump jr. that she had information about hillary clinton. leader kim jong-un being cheered by thousands of people at a concert celebrating the successful lunch successf successful launch of the

ballistic missiles protests in caracas, pros. flloyd mayweather asks the irs to grand him a temporary files. he earned $720 million in his boxing career. >> that's the news at this hour. brian, back to you apple itunes, stores are losing market shares in movies >> brian, apple's itunes market shares and selling movies have dropped between 20% to 30% this is according to the wall street journal and apple's spokesperson did not disagree

with that. movie rental services did increased the past months. what explained the drop in the market share cfra research talked to me of a couple of broad reasons. one, increasing competitions from service providers like comcast and parecompanies of th network. he notes that broader consumer shift many are interested in streaming contents like amazon and netflix and hulu it is still dpoigoing to get pe a way to buy and rent movies on itun itunes investing more of its own original programming of the app. that means it was the second largest services behind app stores of more than $7 billion

in sales >> trying to make the whole ecosystem halo effect there. thanks josh. check out the southeastern in paris last night. 20 substations had to be shut down because of flooding look at your screen. water pouring down the steps of the tracks some of the stations roof leaked, wave puddles. there was a movie about that, was it >> "midnight in paris. >> all that water may not compare to what train riders in alw york of what rider havs hav de with. is it no pain and no gain? we'll be right back. liberty mutual stood with me

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about it this morning. >> your governor branded that and it seems to start just the fact that we have some essential renewal work that needs to be done at station as and needs tob done on an expedited basis >> it is like when your leg is broken in half and you are going to the doctor and he says i am not going to fix you, but i am going to renew you >> i appreciate your effort to brand this but let be clear of what this is this is a desperate attempt to fix problems if go unfixed could cause your complete and utter shut down of the new york area, i am not over stating that, am i? >> no, we had several der derailments of the last few months >> it is been ignored of the

last 99, right >> it is a problem >> yes, it is a problem. >> so now we are at the point where not only the rails throughout new york but throughout the metro area where power grid is everything >> what does it have to do with infrastructure and your idea to fix? >> people have to take responsibilities to make things happen you can actually throw what's towards the system what's happening of infrastructure, for example, no one have the authority to prov r it there is no certainty of when you will get a permit. the result is we have no public funding of infrastructure because we have one party that refuses to raise taxes to pay for anything and even the gas taxes and sort of 35 years out

of date. we don't have a permit and we don't have the money and we wonder why the infrastructure is rewarded >> we proud ourselves in the united states on the use of private capitol over government money. you are telling me europe has more private capitol in the infrastructure as we do, why do they have their bureaucracy better >> by a factor of 100. >> absolutely. >> in germany, i did a report on this a couple of years ago, big infrastructure never takes longer and going through the environmental process. this country, you are lucky if it takes a decade. >> how do they make their money back on those european trusts? >> sometimes it is usually charges and tolls like the airports and sometimes it is with the state. not all projects in europe are private like in this country,

there is something that's not. >> it is just plain public they actually allocate the money to rebuild it. the problem is, here is the thing, they maybe thinking why do i care, new york, this is what you get for all the money you spent on everything but this but is this not a cautionary for every city out there that's building stuff which is effectively if you don't invest, you are going to become new york and give the money away to give boats and all the stuff that we care about and salary and pensions and things that get you voted in but they don't stop the break down later, do they? >> right >> the problem is, it is not just new york. we should point out that all the growth in the country of the last 25 years have been in the urban areas and no infrastructure renewal of those urban areas. >> what can happen to change the mechanism for a lack of a better

praise >> there is a villain here, congress has to change this thousands of pages and rules that'spiled up over the last 3 years and create a simple structure of authorities to make decisions and congress needs to fund it c they raised the gas tax by 20% which most americans will probably approve it. >> i think raising the gas taxes of a penny, people have a stroke >> it is historical loans. it is not been raised since 1994 >> $40 billion >> there are user fees every time you fly in and out of the airport. new yorkers pay a ton in user fees when it comes to flying but their airports don't get fixed because congress dolls it out to all constituents around the country. we should control that money and not congress >> first, that's true. the port authorities is well run

by now and as we know conveniently and completely redoing laguardia airport, private capitals and jfk, fantastic terminals. >> newark airport got better it is like the ipad, private capitol. >> it is true, in some countries, it takes two years to get a permit but here in the country it takes at at least ten years. it is a huge arbitrage >> the cost in thatis not simply that. in my study, we found a six year delay is more than double. it is dramatically harmful to the environment. it prolongs it

so what happens is the private capit capitol. we got to get you go phillip and i urge everybody to read your book the rule of nobody, it is just -- you got to read it if you think the government is broken and you will notice the government is working. >> thanks for coming on. >> thank you, brian. >> blue apron is trading below its price. we look at other stocks and how they did after that. d horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim.

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time now for trading nation here, let us trade the eem, emerging market etf of its best day in two weeks erin gibbs, i don't like it because it is asia pacific lets call it the emerging etf. >> top nine of the ten stocks are based in china, taiwan or korea. either way, do you like it >> so, i do have concerns about this, ever since we saw a pop in

the dollar around mid may, ever since then this etf have been in a flat trading range, it is bouncing around and as long as we are going to have concerns about raising rates in september and perhaps the dollar rising, this etf could again sort of stay in the stable trading range and under perform for the next three or four months once the rising dollar goes away, that's when we make the opportunity because we do see potential high growth in the asian pacific regions. >> what do you see of the chart of the eem >> well, the charts are mixed here i say we don't hate it and we don't love it either the big negative is that on a relative basis, we think the u.s. offers the much more attractive reward here and the u.s. in secular rise is still

below the 2,000 peak however, i think from a positive viewpoint, yeah, we don't see that significant upturn in the u.s. dollar, it is still up significantly over the last three years and a lot of that global monetary divergence have been priced in efa in particular, that's the relative racial here eef in this range beginning to break higher verses and within this longer turn around. >> okay, does not like it and does not hate it it is kind of like a chicken sandwich >> erin and ari, thank you >> fears over ipos snaps falling and blue apron is below the price. should we someday away from

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shares of blue apron getting a big bump but they are still down 20% since the ipo which was just last week, right? what does -- with such a rough ride since going public mean for the company. leslie picard taking a closer look. >> investors are left wondering whether the meal kit delivery company has suddenly become a buying opportunity as of friday, shares had declined almost 23% since its ipo june 29th. today they are up substantially, but if history is guide, ipos that plummet one week out of the gate don't tend to succeed in the long run blue apron ranks 12th for the worst one-week performance with a decline of 11.6% through july

5th. everyone will, of course, point to the success stories, facebook, for example, is ranked eighth, but since its ipo has sored over 300%. but of the other top ten performers two are higher than the price. the rest are trading quite a bit lower. sunrun, fmsa and vivint solar are less than half of their ipo price. king, maker of candy crush, was acquired by act vision for less than its ipo price the point being it's going to take a lot more than a one-day jump to change many investors' minds about blue apron meantime, you may want to stay out of the kitchen >> got it. thank you, leslie. >> check, please is next so don't move your insurance company

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check, please. >> before we get to check, please, let's talk about the overall market because i think it plays into what we all want to talk about in check, please, which is i don't know if i've ever seen this happen in the stock market, guys, and correct me if you have the ten worst stocks in the s&p 500 right now are not only all in one sector, they are all retailers, macy's, gap, best buy, bed bath & beyond, kohl's,

12 of them are the worst performers today i can't remember a time when one group, one small group was this bad all together with nothing else being in there. >> yeah, the carnage is really, really bad i wanted to talk about -- >> no specific catalyst today, right? other than -- >> amazon prime day tonight. >> and amazon coming in with geeks to take on the geek strong. >> which is hurting best buy specifically, but you have to wonder if people are thinking oh, my gosh, prime day is going to start tomorrow we're going to see all these numbers. it's going to highlight ever more how big amazon is getting, and is it just bad for retail? i would say there's new etfs where you can short retail you can go double short and triple short they are not on market yet, but they have been proposed. so, just brown brought this up he wasn't brave enough to say this could signal a short-term bottom, but when you see something like this. >> when they come in like that. >> exactly. >> long haul retail is in

trouble. >> but, yes, when it comes to sentiment, being able to double and triple short retail right now, i think it's, you know, sentiment indicator that things are so bad maybe there's a trading bottom. >> bottoms me a little bit with etfs because not all companies are created the same but you're sort of lumping them all in. my check, please, guys, i wonder in the amazonization of the world, are we going to reach a point where people are just tired of dealing with the boxes ant the sigh foam pellets and bubble wrap? i drive down my street on recycling day there's mountains of boxes. >> you've got to cut them. >> isn't it so much better than driving to the store, way better >> yeah. >> i don't know. >> i like the social element of going shopping i like department stores. >> what? >> the boxes -- >> i'm just saying the boxes are getting annoying. >> you're a buy.

>> i like going to the store. >> oh, my gosh. >> i like it but one of our guests said all the legacy retail remembers either dead or dying. >> yup thanks -- on that cheery note thanks for watching "power lunch." >> a very sad "closing bell" starts right now why are we sad >> no that we weren't listening or anything. >> i'm feeling pretty good happy monday, everybody? what did you say earlier >> tgim. >> i like that. >> happy monday. >> welcome to "closing bell. i'm kelly evans at the new york stock exchange. >> which would make me bill griffeth oil is helping lift stocks today, a little bit. citi saying oil could hit $60 before the end of the year of course it could. >> yeah. >> we have a debate on how to play the energy space. >> we're seeing some life in the commodities. the dollar up a little tin