Bazos versus trump power lunch starts right now heres what else is happening. Southwest airlines pulling back on its service to cuba because the routes were not sustainable. Southwest will continue the service from ft. Lauderdale and tampa to havana. Phil jackson out as New York Knicks president they were 80166 in his full three seasons. And for the first time ever, samsung will build appliances right here in america. It will open a factory in South Carolina creating more than 950 jobs by 2020. Im Tyler Mathisen a rally today. Financials, industrials are leading the way at this hour one stock were watching is fedex. The stock is higher after it said there was no data breach to the tnt express unit but there could be a possible Financial Impact from a disruption in operations lets get the latest on this rock them, sock them rally in this edition of power lunch. Bob pisani is on the floor of the nyse hi, bob. Reporter there doesnt seem to be anything in the way of the market ramp. Lets look at the internals right now. We open 5 to 1 thats a good open it stayed that way throughout the whole open the volume is moderate lifting quietly and volatility keeps dropping we know that story, too. Sector, its this rotation again. Oil service names, bank names and retail names, whatsectors are trading for the upside oil service names, bank names and retail they are leading as well here and how about the banks starting to see the move forward. Weve been telling you about the results this afternoon who will be able to buy back more stock citigroup on many peoples list for increasing the dividend as well stabilization with the tenyear is helping as well and to look at oxlf, even in europe you see the europe banks strong again from an ecb banking forum. Some may get the green light to buy back capital or buying back a return capital michelle, wouldnt that be something to see something happen with the european banks as well . Again, remember, 2 1 2 days away from the end of the quarter. Michelle thank you, bob. We already talked about the stock market but fed chair janet yellen saying that its looking somewhat rich if you have some traditional metrics and John Williams saying that the stock market is running on fumes are they right nancy, when i looked at the Market Reaction today, its like they look at these people as contrarian i contrarian indicators. What do you think . It always makes me nervous when the fed is talking about the stock market and the comment that its running on fumes is ludicrous and the market is responding to that the majority has been driven by earnings growth, somewhere over 60 . And the rest is multiple expansion. Still, were not at nosebleed levels in terms of multiple expansion. Give me a number. What are you looking at in forward earnings, for example . What am i looking when when it comes to valuations and p. E. Levels, they are not at nosebleed levels, where are they and where do you think they could go i havent looked today but were looking at 18 times forward earnings ive been in this business for a long time. Weve been at much higher levels for the nasdaq so im not arguing that stocks are cheap, but theyre not running on fumes that is to be sure. Mark, if nancy is right, and my sense is that its the valuations that are a little higher than the average historically that they have been is this a time where you buy the market or youre far more selective and try to buy individual stocks, though indexes have beaten most of the time. I think its a time to be more selective i think you can look at the market today and we talked about the valuations at roughly 18 times p. E. I would argue that is fairly expensive. Its 20, 25 above longer term historical norms 18 times p. E. , 12 times ebitda, thats a little high the nice thing today is Interest Rates are low, inflation is still low. I think you can argue for that. Where do i find bargains . Where do i find value in a market that you describe is a little stretched what we do is we try to focus on companies that have sustainable, competitive advantages so some economic moat around their business and then build around the Balance Sheets. Give me an example. Give me some examples of companies that have those moats. Berkshire hathaway, Southwest Airlines whether its Carnival Cruise line, a number of companies where i think theres moats there and, importantly its called the ocean for carnival, right . Its also a billion dollars to build a shop. How hot is it today in phoenix, nancy its 118. 118 okay enjoy. Oh, yeah. Its not the heat its the humidity. A news alert in the bond market sevenyear notes are up for auction. Rick santelli is tracking it it is a cminus, similar to yesterday at 34 million. The yield of these 28 billion, sevenyear notes lasted 88 in coupon supply. It was 2. 056 it was just a whisker above the big side of 2. 05 so not perfect in pricing 2. 46 bid to cover. It was the lightest since january. Not that long ago. Longterm average is 2. 53. 65. 4 is a little light 9. 4 on directs was also a little bit light. Everything was a little below average, hence the c minus sometimes you get a rally. Not seeing it today. With supply out of the way, i guess all we have to look forward to is more information from Balance Sheet controllers around the globe like mario draghi yesterday you were talking about this, but the big pop in european yields yesterday helped lift american yields a little bit right, rick . Yes tell me more about that. The intersection there is quite simple, that the globe and Light Capital moves, rates are going to follow each other if mario draghi is hinting about an exit with regard to the Balance Sheet, no matter the timeline, market takes it a bit serious. We followed european rates up. Theyve come off a little bit today but not much you can clearly see whether its tens or higher yields before draghis statement and thats very important terrific. Rick, thanks training tomorrow and a worrying sign ahead of it. What does this mean for blue apron as it prepares to go public is this a bad sign for the ipo in general lets bring in the Senior DeputySan Francisco bureau chief and cnbc contributor scott, ill start off with you do you think if they did the pricing last friday before the amazon whole foods deal happened, that this could be a different story altogether it could be i mean, the certainly the valuation is weighing on investors. They slashed the price below what investors Like Fidelity paid two years ago and i think certainly amazon whole foods, when you look at what amazon could do, with suddenly having over 400 distribution points in highend neighborhoods serving premium food, to borrow the shark tank fame, amazon could crush blue apron like the cockroach that it is its growing very quickly. Its revenue is doing well. Its got a brand theres not a lot of barrier there is for other companies to come in. Im sure its weighing on the divor investors minds but their marketing costs are growing as well about 25 of revenue compared to 15 a year ago and thats because they have to keep replenishing their customers and that costs a lot of money. And its up 181 yearonyear herb, i know youre the skeptic. You say they already have so many competitors already before amazon and whole foods tied up. It wasnt just the competitors. It was the 25 discount card i got in the mail. Its not just one i mean, i know i got the offer again and again and again. It would be one thing if they made the food for me but when you look at any of these, you could extend it to uber. When youre talking to the uber driver and they say how they are being subsidized, youre like, what happens when this goes public it doesnt guarantee its going to be what the private investors thought they were. Blue april, the latest example. Should we worry, herb, about the fact that their s1 says they may never, ever make money . Well, thats a lot of Companies Say that. Every single one of them. And by the way many of them never did. Well, those boilerplates are there for a reason they can point back to them. Look, weve been in periods like this so many times before and to try to Say Something like, you know, does this top the ipo market who knows. Its a company trying to make an exit at a time that isnt appropriate for them. Leslie picker is squoinijoins she was on squawk box earlier. Have you heard a positive word about this company yet going public during these discussions today . I have been looking for one, michelle, and im having a hard time finding that. Herb brought up a great point. The timing they decided to go out right after this amazon whole foods deal was announced are they rushing this out before things get worse, before they face a momentous amount of competition . I think thats why were seeing so much skepticism heres the thing. The world is so contrarian on this ipo i mean, its so negative i am so negative weve all cited the very obvious things. The sentiment of snap going into its ipo, its got giant competitors in facebook or which ever competitor that you want that is bigger than snap and was there this shout that snap had to get things out before things turned yeah. Are we looking at everything with such a skeptical eye these days absolutely. I think blue apron really needs the cash they had about a quarter left of burn they raised debt to help them out but they are spending money like crazy right now there are all of these facebook offers in my facebook field, these blue apron coupons. As we look at these Meal Delivery services, we have half a dozen of them over there im familiar with hello fresh. I like what they deliver its a good product. Its not an inexpensive product. How many of these brands, scott, are going to be out there as standalone brands in three years . Not many. Look at ecommerce how many can you really name that have done well . Zulilly was supposed to be ecommerce ipos. Weve had other companies try and amazon is the brand name the consumer side is just very difficult. The company doing well are would you put your money in any of these, herb well, you could have asked me the same question about web van back at the 1990s and i could argue that it was just an idea that was a little too early. Yep. By 20 years and maybe 20 years from now well say, what a great idea this was and who so you just never know i was going to ask the opposite question of tyler herb, would you recommend shorting blue apron when it goes public well, since we havent done one ounce of work on it since will you be looking into it we dont recommend shorting or doing anything like that. We would put up risk it was a highrisk situation based on everything that was disclosed based on everything that we know about it, especially the Customer Acquisition costs and the level of competition so that would be big, red flags for us, you know, assuming we looked at it which we have. All right scott, herb, leslie, thank you coming up in the next hour, well speak with a blue apron competitor called freshly and they actually do cook the food for you. All this week were debating specific issues with health care today were tackling this question should the Drug Companies not be allowed to advertise directly to consumers . Spun cc. M. At porlchnbcomyace is coming, i un. Were back after this. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. You see a drug for gout and you think we should stop that . Its a huge industry. I can tell you why. The consumers who dont understand the sophisticated issues about these drugs take the name of the drug into the doctor and say, will you write me this prescription too many of them just do that drives up the costs for health care that are not effective or not really necessary. That was senator dick durbin speaking with me this morning on morning joe. His point is that we could save billions of health care if Drug Companies were barred from advertising the drugs directly marketed to consumers on tv, magazines and newspapers does he have a point 3 billion to prescription now to 45 billion far outpacing the costs. Doctor, the senators point is, people see this stuff and say, i have an itchy back im going to tell the doctor what i need. How serious of a problem is that do you agree we should ban directtoconsumer advertising well, first of all, its a pleasure to be on. Im a physician and i practice internal medicine and theres a great deal of evidence out there that directtoconsumer advertising stimulates prescriptions to be written for expensive medications, in many cases where those medications are not clinically indicated there may be lower cost options, generic drugs for conditions that arent being advertised but what we see is when patients do bring these specific advertising directed requests into physicians, physicians in many cases write the prescription for the products there are plenty of other data supporting what senator durbin has to say john camp, what are your thoughts ban it or let people make up their own minds . Is this the kind of bread i want, these are the kind of pills i want those who want to ban for directtoconsumer drugs are voting for ignorant among the american people. We believe that the best decisions are made when doctors and patients have good conversations that are based on facts. I disagree with the doctor on the idea that docs are automatically going to prescribe a drug that is asked for theres really Good Research, a doctor out of california has done some Good Research and found that when patients ask for a specific drug, they dont necessarily get it but they do get the standard of care in their area i so i think that we need to be very careful of what we are doing in america. Respond to what john kamp just said but is the problem that you pinpoint in your earlier answer, does it really have to do with the advertising or is the more central problem the relationship between the doctor and patient, that the doctor doesnt step up and say, okay, you bring me this advertisement for an 86,000 a year hep c medication and theres one that will work fine for you at 9,000 a year isnt that really what we ought to be focusing on here well, i do think you have to focus on the advertising itself because, in many cases, the advertisements do not show a full picture of the product that they make. So why dont you . Are doctors wimps . Its the doctors job to say, actually, that doesnt apply to you. Youre telling me as an industry that you cant no, i think doctors can do that but it is there is a limbed amou limited amount of time and a lot of things to go over im not saying this is right or wrong. The data shows that in many cases doctors will how do you handle it . I try to sit down and have a full conversation with them and explain the benefits and risks of the medications they saw on television and if there are other medications that are better or more appropriate for them it takes time and, in many cases, again, im not trying to blame physicians because they have a lot to take care of in a limited period of time and these kinds of requests that are driven by advertising, patients can get the wrong impression about the product because it doesnt fully describe the risks or may misrepresent doctor, time is tight john, you talked about ignorance. Shouldnt we be a little ignorant about this . This is specialized stuff. Thats why this doctor goes to school for stuff like this eight years after college, including residency. Do americans need to understand all that stuff complicated medical stuff . No, they dont need to understand all of the complicated medical stuff. What they need to know is that theres an option available to them that they can have a reasonable discussion with their doctors about those options. Doctors arent stupid. They are incredibly intelligent people my doctors like the conversations that i have with them about the kpgoptions that e available to me because it means that im clearly invested in my medicines and the treatments that are available to them i think we need to have those conversations with doctors and patients so that doctors can make the decisions that are appropriate. John kamp and doctor, thank you for joining us. The question i have, if the u. S. Did ban directtoconsumer advertising, would that actually lower the cost of drugs . Why is there a notion that if Drug Companies dont spend that money, that that will go to the cutting of prices . Im not convinced. I guess the answer to that and im just speculating we did 4. 1 billion prescriptions filled last year lets say that cuts down by 15 . Insurance Companies Pay about 75 of your drug costs you take those costs out of the system a lower total expense one thing that would be true is that lots of Media Outlets and magazines. Would suffer. Would suffer massively. Because these are not just quick ads. They are long ads. Oh, yeah. The side effects. Its 5 pitch and 75 disclaimer. Absolutely. Whether thats in print or on television. Yes. And literally, the disclaimer is the majority of the ad. They have these incredible go to the hospital. Obviously anyway side effects of turning green and dying. All right. Now its your turn do you think its time to ban drug ads you can email us. A lot of email going on lately. Powerlunch cnbc. Com. Your response is at the end of the show will traditional retirement plans, Pension Plans soon be a thing of th