>> if you take a picture of yourself and you're on the front lawn and the seller decides the sell to you and someone else comes in and says it was a gender issue or racish then those other bidders could see the seller >> holy molly. it's getting wild. >> very tricky >> that does it for the exchange thanks for joining me. l first, join us for "power lunch" which starts now. how will fears about slowing growth play in this as marks sit at record highs, ladies and gentlemen. and president trump is not a fan and mark cuban says the it's a big mistake. facebook's libra the currency facing a lot of backla backlash we'll hear from one who says they have it all wrong plus, nd the black market of cannabis where illegal dispensaries openly break the

law. our investigation weed killer is ahead. "power lunch" starts right now all three of the major markets are up the dow up triple digits the this hour. new high there at 27,240 and change all three of the major averages on track now to post their second straight week of gains and their fifth positive week in the last six kelly. >> thanks. let's forget the fed and trade wars for now investors are focusing on just one thing and earnings citi kicks off on monday morning. jpmorgan, wells fargo, ibm, bank of america, netflix, america express are among the names that will report next week and it looks like this earnings season

will be a cloudy one bob? >> yes, kelly. jay powell kicked us into new record highs in all three indices. now it's up to earnings. this is going to be a tricky earnings season. not really about second quarter earnings it's about the guidance in the second half. we've got the central banlgs behind us and there will be a trade deal and that will help lift earnings. here's the problem the market's expensive earnings are flattish this year. we don't know where it's going

to be. they need a little more than that so the traders seem b to be betting that parts of the global economy aren't going to be doing that if you look at dmomestic and particularly dmesically defensive sectors like health care and utilities and real estate and consumer staples, they're outperforming, so kelly, you can see here the market's n anticipating a little by fur kags everything now depends on whether or not we have more news op tlad and of course more news on whether the global economy keeps sliding or not back to you. >> thank you very much the bulls do keep charges. at least for now the dow and s&p pushing to all time highs today the big question for investors is will earnings season be a catalyst for this rally. let's bring in cliff hodge,

director of investments with corner stone and if it's friday, it must be insana time welcome to both. cliff, let me begin with yoi is the market on firm ground or not? >> thank you, great to be with you. we've had an ip crede bable rally. up over 20%, if you look below the surface, there are some signals we're not on the firmest of footings. bank stocks. transports small caps roughly 10% off their 52-week highs. bond market is is screaming the cycle is starting to draw to a close. there's a couple of things we're watching we like to see strength in order to take another leg. >> would you be lightening up your positions in equities >> we are implementing a bar well strategy so we have some risk on trades in the frm of overweight technology, but we're also overweight defensive. we've been buying bond proxies

as rates have backed up. >> even if we stipulate that there is weakness in tran ports, we talked about it yesterday,ad fight the fed. i wouldn't disagree with cliff you look at the global bond market some junk issues in europe were sporting -- the fed's telling us they're going to cut if they're going to cut this month and later in the year, hard to walk away from an environment where the fed is your friend. it is much, confounding to me. it defies everything i've lerped over 35 years. it's where we are. >> there's risk assets, but then fixeded income

towards the end of last year, it was opposite hey, ten year is at three and a quarter and stocks were at all time highs does it matter what the level is for some reasons, no when you look at pension funds, what happens as markets go up, they have to buy treasuries as balanced it's called derisking. it's a process they have to go through. they have to do those things >> they look at equities as they move high e and that means right now, treasuries because it's a much safer bet than anything else some other things that don't kind of measure up from a risk

standpoint >> get us ready earnings season which starts next week >> we are going to be watching earnings closely expectations are slight sli down one stat that i haven't heard mentioned is that going into the second quarter, 88 companies have prereleased negative announcements, which is the highest we've seen since the first quarter of 2016. which was the last time we had an earnings recession. >> ron >> you stay with quality it's something we talk about all year the way to play this in such a way you don't get killed or miss the boat if you're in the mode, you stay with high quality names that have been produced results that are big, brand name

companies in a wide variety of industries whether it's tech, food, you know, some of these names have done quite well >> and we can guess entertainment. microsoft. >> i mean mcdonald's we talk ed about for r a couple of years it's much a technology company now as it is a food delivery company. so there are things happening there. i don't own any of them, but when you look at what the market's doing, eququality's st winning so you don't have to take ha much excessive ris b k in equity names in order to par pate and keep pace with market >> thank you very much cliff, ron, see you next friday. >> i'll be here. >> i think >> shares of j&j are sinking the worst performing stock in the dow and second worst in the s&p 500. the company is reportedly under investigation by the justice department meg is here with more. >> the justice department has

opened a criminal investigation as to whether johnson & johnson lied to the public about the risk of cancer citing people with knowledge of the matter j&j has lost more than $15 billion in market value today on this report and the stock's biggest drop since december when a reuters investigation said internal documents revealed they kept information about safety risks that regulators and the public going back to the 1970s they told us in a statement today quote, the implication there has been a new development is wrong noting the slow subpoena from the department of justice and a february sec filing, they say they're fully cooperating and that quote the powder doesn't contain asbestos or cause cancer the company faces thousands of lawsuits in this arena and that's not all j&j is also the sole defendant in a case in oklahoma right now where the state claims it contributed to the opioid epidemic, so a lot of legal risks coming into play for them. >> this seems like a big headline >> it is, but they said they disclodi disclosed it in february

it wasn't known if it was civil or criminal and with the reporting today. >> does that make a big difference whether it's one or the other? >> potentially in terms of fines or the way this plays out, it could. i suppose. we'll have to see, but it could be a listening term battle for johnson & johnson. >> again, those shares down about 4% let's get to leslie picker with a market flash >> hey, kelly. anheuser-busch announcing it is postponing indefinitely it's not proceeding with its announced public offering of its asia pacific subsidiary that was planning an ipo for a stake. they say they're not proceeding because of several factors, but they say they will continue to closely monitor market conditions as they evaluate what they can do to best especially hans shareholder value if you recall, earlier today in u.s. time, we learned they were delaying the pricing of f the deal to next week. they were looking to raise about

9.8 billi$9.8 billion in this o, so you can see here, shares down 4.1% right now they were down just about 1% on the news of the delay, but declines further accelerating on the news they will not be proceed wg tining with the ipo >> thank you very much >> tropical storm barry picking up steam it will dump 20 inches of rain on new orleans so they say. it will, that's close to the limits of the levies down there. and massive disruption of commercial shipping all around the gulf wendy wolf joins us from new orleans with the latest on preparations at this hour. wendy. >> the winds have been picking up steadily throughout the day we've seen random bits of sunshine and then bands of rain throughout the morning

it's not going to get by quickly. literally crawling its way on to the louisiana coast. it's going to be a huge rainmaker, which the area doesn't need they have been evacuating the coastal communities throughout the last 24 to 48 hours. residents have filled up sandbags and gone on inland. but the residents in the city of new orleans proper were told to shelter in place with water and supplies long enough to last three to five days because the mississippi river is already eight feet above normal because of the rains and spring snow melt and that triple threat of the 20 inches that you mentioned that were predicted with the storm, the flash flooding and the dangerous storm surge that will come with barry all could drive this rooifr to its highest levels since 1950. the lifelong residents we've spoken to have said they have never seen a river at the levels

that it is this area is normally a grassy area where people like to camp and do fitness classes clearly, no one is doing that at this hour. probably a good three or four feet deep even now going to get worse before it gets better here in new orleans. as it stands right now, forecasters though tyler, are still predicting that barry will make landfall in some capacity, whether it's a tropical storm or a cat 1 hurricane. sometime early tomorrow morning. that's the latest here live from new orleans. i'm wendy woolfolk, back to you. >> thank you very much coming up, bitcoin taking hits from all side sz today. the president and mark cuban both critical of it, but it hasn't stopped the run of crypto currencies bitcoin has tripled. we'll dive into that can prime day propel amazon back over the trillion dollar mark? there's the market capital 990 billion counting amazon up

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regular la regulations and mark cuban says he's not a big fan either. >> i think it's a big mistake. not so much because of what will happen here in the united states, but globally there's going to be some desk bot in some african country that gets really upset that their currency they can't control their currency anymore and that's where real problems start to hp so i'm not a big fan of what they're doing they're way ahead of their skis on that, but it's only in the talking stage so we'll see what happens. >> let's bring in paul meeks paul, again, facebook has attracted a lot of unwanted attention for this venture are people making too much of f this or not? first, the president's comment i thought was a bit bizarre. i don't know if he really can define it. but when mark cuban follows up who i think is a technology genius, i think we have to listen to what he has to stay as an institutional shareholder of

facebook here's a company that is dominated by an advertising m model. it is coming after regulatory and privacy assault and so they have to pivot. it's necessary they pivot and i actually think this is a pretty reasonable pivot and the nice thing about libra is it's backed by established fiat currencies and also it's control birthday i a consortium of which facebook is only one of the members and so ipg it is actually a program that is fairly well conceived. so i like it >> it's a program if i'm hearing you right, you say that facebook kind of needs to do because it's core business model may come under threat other investors would probably rather your say if it's too much of a hassle, just abandon the effort >> yeah, no, i think it's interesting because going forward, mark zuckerberg and company know that they have to do something different it's inevitable and i think this is is a pretty good way to go to

a transaction based model inved of an advertising based model. i think it's a must do so is that how facebook would make money from money? charging a percent or a tenth of a percent of everything? >> that's right. it's yet to be pinned down, but that would be how it works in the meantime, you have the other majors on board in this consortium so it's backed by large credible players two of the threat, one is the regular will torre threat. the president seems not averse to intense regulation of some social media companies and the democrats seem not averse to that and the other issue it

seems with facebook, not facebook's other products, the kids don't use it. and its market is ageing >> i believe that to a certain extent starting with the last bit fist we still have over 2 billion monthly active users and i would quifl with the fact kids can avoid it what happens with network effects, you may like it, you may not not, but i don't think you can avoid it so over time, part of it is the law of large numbers their active users will slow, but they'll slow and i don't think that we're versed. on the other side, i am very worried about the privacy issues and facebook themselves has said we need government intervention. now i don't think i would like to see facebook or any of these other companies broke ben up but i do think the government has to come in and for once and for all, define what is okay what is the relationship that

facebook has are they a publisher or just a distribution type? >> fair enough and if you will, let us turn to amazon because look, they were over a trillion dollars in market cap again this week thaf got prime day coming up it's expected to be bigger than ever how much is priced into this stock, paul? make the case if you would make the case for owning amazon here? >> so i own amazon and i actually own amazon not for e commerce, not for prime day, of course this year prime days. but because of amazon web services here's a company that has an overall operating margin of 7%, the average company in the united states has won many the double digits. here's a situation where if they can continue to grow their revenues, 15 to 20% per year, their earnings growth because of expansion will probably grow at

double that clip and so no, it's not inexpensive. never going to be a value stock, but then on the other hand, i think it shaould be a stake on anybody's portfolio. >> all right, fine, we get a share of each. that's kind of the seem i see with all of these. what happens if they go with facebook and you spin out the what's app and instagram spin out youtube for shareholders like me, it might be more valuable thanks, appreciate it. >> cool to be here zpl good to get your point of view >> all right this chart is a pretty picture for snap investors the share's up nearly 200% so will it continue to make investors smile? trading nation is is next and the nba season may be over, but the focus now turns to the big three. three. the man

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welcome back to "power lunch. snap is rising today after goldman upgraded it to a buy

that stock has nearly tripled in value this year. that wipes out year's losses as new features including its gender swap filter had enticed users back to the platform let's bring in the trading nation team. for what's next in shares, guys, gina, will you snap it up? >> well, remember that it's coming up after going down tremendously one of the problems with snap chat wuasn't the fact it could create user growth, it was whether it could monotize it into revenue growth. i don't think that's super supportive and the more they try means they're going to be adding ads on to the platform and the user base they have has zero tolerance fors and so i'm not sure this is going to last. >> okay. bill are you any more positive here >> not really. ultimately, that's psychological resistance you have the high post ipo then

the low. ooip looking at the 50% retracement. that comes in 17.13. that's a will the of resistance there. i think the market could stall there and also a quarter in 18, that was where it did stall and start to fail. you don't want to chase the market boo that. the edx is is trending higher, but there's some belief, some head wind on the edx because it's had lower piques over time if the trend starts to stall out aligning with 17, you don't want to be buying into here if the fundamentals stay upbeat, have a 50-day moving average. that's when you want to look to be a buyer >> sounds like the team taking the other side of the call today. guy, thank you both. bill and gina. for more trading nation, head to the website or follow along on twitter. inside the black market of cannabis where illegal dispensaries break the law all part of a $70 billion

nationwide market that is crippling the legal industry weed killers is coming up.

welcome back i'm sue herera president trump defending house speaker pelosi saying representative representative alexandria ocasio-cortez should treat her with respect this before he departed if white house for wisconsin. >> cortez should treat nancy pelosi with respect. she should not be doing what she's doing. and i'll tell you something about nancy pelosi that you know better than i do she is not a racist.

>> the british destroyer hms duncan selling through the boston strait of it way to the persian gulf the relations became strained last week. and sneaker enthusiasts can now get their hands on some of the rarest shoes every made. the crown jewel, the 1972 nike waffle racing flat moon shoe it's one of only 12 made for the 1972 olympic trials. and they estimate that sneaker will fetch between 110 and $160,000 you're up to date. that's the news update this hour back to you. >> is you read the book shoe dog? >> i have not. it's zbl the story of nike and i'm sure he mentioned, i know he mentioneds the waffle trainers >> i will pick it up about 90 minutes of trade ing left until we close out a

record breaking week on wall street we are around session highs right now. how about that 182. the dow is higher by that's two-thirds of 1%. the nasdaq is up by about a half percent at 82.34 and the s&p 500 up by .3% at 3,008 >> thanks. the oil market is also closing for the day. that's been one to watch with the tropical storm this week leslie >> and surprisingly, muted today. a muted session. crude looking to be little changed at about 60.21 brent up about .4% at 66.78. now gas up a bit stronger, 1.5%. mixed session comes after snapping a seven-day streak in the green yesterday. still, wti is trading near six week highs as barry heads towards the gulf coast the storm has shut a million barrels per day of gulf oil production more than half of the region's daily crude. that's according to the u.s.

bureau of safety and environmental enforcement. back to you. >> thanks very much. leslie picker. >> not a day goes by where the nba and basketball dount dominate the sports and business head lain lines last night, another blockbuster deal that literally lifted my 13-year-old son out of u his seat westbrook goes to the houston rockets and the big three, a 3-year-old three on three league of former pros hoping to capitalize on this year's hoops frenzy here to talk big three, the future of sports and streaming wars is jeff the big three cofounder, long time hollywood executive and business partner for the league's other founder, ice cube, who was to have joined us, but couldn't at the last minute. good to have you with us how does the big three benefit from all the buzz that attends basketball right now, you've got to summer leagues, women's league. and free agency. >> i think you know people want

to participate in basketball year round so we have competitive, professional basketball. i think the more you know, people are hearing things, they're jonesing for it. >> playing this weekend in brooklyn >> providence then brooklyn on sunday >> tell me about some of the new players you've attracted this year wade, he's amazing >> is white mamba still playing? >> still playing had a tough week last week got pushed around a lot by greg oden he has the broken feet >> greg oden, he's redeeming himself. >> wow >> i'm telling you he's looking tough >> you guys need, seems to be casual observer, if you had that

big break where someone goes from the big three and stoudemire has been in the news lately robeeportedly lately goes back the nba especially now with summer league doing wells it is and almost kind of vying for attention. that would be a big deal for you guys, wouldn't it? yeah, our ratings are higher in summer league. you know, but it's obviously very different the youngest players, we have guys coming back in around, we've had guys get back on to nba roster, but no one who blew up >> t a format and you've experimented with four point shots and format everybody blows up playing three on three basketball one way or the other. it's fun let's switch and talk about the broader realm of content that you and your business partners are involved in. it is almost as if i cannot remember a time where the same content is king was more true

than it is today being in the business for 30 years. distribution changes of course but yeah, so many people are ush rushing in to the streaming world so there's such a bigger need for content zpl is streaming going to own the future and is broadcast not just over the air, but broft cast television going to be outplaced? i heard barry diller say yesterday that it was on your europe it was a quote stuck in my head. the only people who are willing to watch television with commercials are the people who kai not afford to buy what the commercials are selling. >> that's barry. broadcast tv is broad. there will always be things that you know, try to reach a broader audience the thing that's screaming loud, to be b able to find a niche

audience but i don't think broadcast is going anywhere i mean you won't be watching it on the square television we're used to. >> in the time where it's first broadcast. if you're going to watch the bash l bachelor, may not watch it at 8:00 on monday night >> at 8:20 on a phone, the computer whole world coming back to "star trek". computer, play this. >> in terms of proliferation of leagues, i saw the u.s. pro volley foot league where people are kicking volleyballs over the net there's a lot on air these days. what about the reachable >> i hope we do better than the volley kick ball league ch i don't know, i haven't seen it. >> you were looking at buying reachablesports networks you still are. why. why do you see value where nobody else does or few other >> i think the market reaction

to sin claire announcement, the stock within seven days. b i think there was a lot of talk you have to talk down the price. when i look at it, i see an ice cube and i, we see the biggest collection of hits in the entertainment business it's like buying a record company that only has platinum you know, platinum because the local teams win their markets. what hasn't happened is a plan to put them together as a network. >> these are the former fox regional networks that had to be sold off as part of the deal with disney. >> we were going to take 21 of them we were going to fill in with the rest of the country with

affiliates, which is not a new model. >> so you're still interesteded in getting that. what is your path to doing that? how do you unseat sinclair >> i don't think we have to unseat sinclair. i think that the government will do that. >> on what grounds >> the same grounds they didn't allow disney to have it. the truth is, the government's doj thought that disney would, it would be too, have too much power because of consolidation because of espn. now you've got sinclair -- >> the largest owner of broadcast stations in the country. correct? >> yes and they own all four, stations on all four networks, so think of this.

sinclair not only now has 90% of the local gains. but if the deal goes through, but they have every year the super bowl the masters. you know, the final four so across the platform, they have every event when they're negotiating with come ks cast or directv, so the amount of consolidation of sports power is way more than if disney b had been allowed to keep it. my bet is that the doj got to reconsider it, go back in time, they wish they would have let them keep it because this is much worse >> wow, interesting. >> this is much worse. they have every event. they have every event. you can't between their stations, how can you negotiate against them because then you know in their footprint, every major distributor has you know, and one of each of those networks.

so they can keep -- >> so in denver, they would have say they have an abc affiliate they don't have. >> golf is cbs >> fox, the b football contracts. but so if i have a fox station, if i have fox sports which might have the rockies and avalanche and the b babble team the nuggets, aif got the -- >> denver at&t tgs not a box form picked a bad example they will have stations in the

footprint. you not only lose the local station, but super bowl, the masters, the final four. you lose everything. look at the concentration of power. good luck with the big three see you soon ft ll osollk out volleyba >>oovoeyr mething like that a cnbc investigation into california's black market for marijuana is coming up right after this quick break stay with us for your heart...

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welcome back rick santelli live on the floor of the cme group this chart of ten year starts in november of last year. do you realize in eight months we've gone from the slight sli less than three and a quarter high to july's low in the mid 190s 130 basis points it's turning around a bit. tens minus two is the spread currently trading around 27. we want to watch that closely.

what price will it them? ultimately and finally, ten years is narrowing as rates firm up that isn't a bad thing as a matter of fact, that spread's around 232. 228 is is the lowest level since april of 2018. "power lunch" will return after a few messages sfx: [phone ringing] you still have service? call the insurance company it's them, calling us. it's going to be a week before they can get through on t shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

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the booming business of cannabis is what many call the new gold rush, but there is a black market posing a major threat to the legal industry, what is really going on inside illegal dispensaries here is made slelissa lee with investigation, weed killers. ♪ >> reporter: it is a weekday afternoon in los angeles the epicenter of cannabis in the united states. this busy dispensary is open for business but if everything looks normal, it isn't this is in fact an unlicensed

illegal dispensary part of the booming black market in california and around the country. it is what the cannabis industry says could be the biggest threat to sky high expected revenues. >> the legal cannabis market in a very short period of time will grow from zero to somewhere in the neighborhood of $75 billion. >> reporter: and that faces this reality, an estimated $70 billion in illegal marijuana sales nationally seven times the legal market case in point, california. early projections of more than $1 billion in annual cannabis tax receipts in 2018 are far from the $345 million collected. that is in large part because the i would legal market can easily undercut the costs of running licensed dispensaries. it is not hard to see how. >> are you ready all right. go >> reporter: a team of cnbc producers equipped with hidden

cameras visited 10 illegal dispensaries throughout l.a. most aren't hard to find and they are open day and night. they all have one thing in common they are brazenly breaking the law. operating with no license, selling potentially untested products, and allowing customers to openly consume. in this illegal dispensary down the street from the university of southern california, customers are dabbing, smoking a highly potent cannabis concentrate. and if you want free weed, this store and others were happy to give it away as the signs say, all you need to do is write a positive review on weed maps, online site that lists both legal and illegal dispensaries around the country. despite a daily limit on the amount of cannabis stores can sell to a customer, you can bae

as much as you want at many of the illegal dispensaries we did not buy anything from the dispensaries >> the black market is a huge problem. in some some states it is 70% of sales and it is a big threat so price and convenience >> reporter: and nowhere are legal operators feelings impact more than in california, the country's largest legal cannabis market where voters passed proposition 64 in 2016, businesses had to be in compliance with a license by january. that clearly didn't happen we showed a compilation of our video to los angeles city turn mike fuer. any surprises? >> no. i know that they are unlawful dispensaries operating in the city it might be that some of the locations you just showed me are under investigation right now. >> how big of a problem is this?

>> it is a very significant problem. and from a public health and safety standpoint, it is especially crucial that buyers of cannabis only go to the licensed shops >> reporter: an illegal store can rake in $10,000 to $20,000 a day authorities say. so far 151 illegal dispensaries have been shut down with more criminal process could you secu. none of the illegal dis3e7pensie we visited responded to request for comments the danger is potentially unregulated products sold to unsuspecting customers legal dispensaries are required to sell regulated products which are tested this is why legal store owners like cameron is outraged at how bold the black market has become >> we're facing especially in california and l.a. specifically an illicit market that is

extremely strong we're outnumbered 3:1. so we have outrageous price compression that we have to see at our stores. >> how much easier do you think it is to operate as an illegal dispensary compared to what you go through >> it is a lot easier. they have no compliance standards, no permitting process, no documentation, no legal process that they had to go through >> so they are breaking the law, potentially threatening the health of consumers and threatening your business. >> correct >> and in plain sight. >> in plain sight. >> and as we found at all the dispensaries with illegal activity, it appears the boom c going away anytime soon. >> there are 186 licensed and more than 250 illegal ones according to the police. but as of right now, no one knows the exact number as far as weed maps, the company says that it provides a valuable is service to the cannabis industry and consumers

>> so they pay $1,000 fine, that is it if they are even caught. >> that is the maximum fine that can be imposed, $1,000 so if you can sell weed for 40% less than the legal dispensary, $1,000 fine is nothing it is hard lay ly a deterrent and the police do weekly raids and shut them down, but a week later they pop back up one detective said it is a lack whac-a-mole problem. and for many states, the promise is that weed will bring in tax revenues so this could be a problem. >> will we see you next week back here? >> yes ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie.

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let's talk more about weed if we might. have the legitimate dispensaries in california and elsewhere gotten around the banking problems >> no. most businesses have not gotten anxio around the banking problems. one company's ceo that does the packaging, and he said oftentimes they would come with bags of cash to pay him. so this is still a major problem. and until at the federal level there is legislation passed, this will still be -- >> do they sell more edible can that business or smoke bl, do

you know >> i don't know the hard numbers, but i got the impression that smokeable cannabis is still very popular method >> i'm surprised the quality issues haven't drawn people into the legal. you are talking about some of the pesticides and other things in the illegal dispensaries. >> pesticides on golf courses were found on weed at an illegal dispensary >> have a good weekend "closing bell" right now welcome to "closing bell." i'm wilfred frost j & j sinking. more on that and the broader markets, dow, nasdaq and s&p all set for record all-time closing highs. >> happy friday, good afternoon. welcome, i'm sara eisen. let's get to what is driving the action transports are the leading group. health care sector is lagging. june ppi