Transcripts For CNBC Squawk On The Street 20160801

Solarcity official. Look inside the deal, plus, what elon musk has to said. And china urging with didi. Under the deal, theyll invest a billion. What it means for ride sharing competition. First up into the first trading session of august, s p looking to host its sixth monthly gain with a dow aiming for a sevenmonth win streak. Crude in yul, wti turn nd the worst month of the year, then goldman downgrading. The firm says ek pensive valuations and poor growth are to blame. We know they have not trusted this rally. No. Flat. And yet at the same time, its been a rotational strength. Technology was really strong last month. Now, i dont know if people realize how unusual that is. Technology is historically weak during the summer. You simply do not get the kinds of gains we got. European is supposed to go away. Look at what happened last week. Takeovers, unbelievable numbers from a bunch of the real big cap stocks. Semiconductor consolidation continues. Yes, its possible stocks do new york city but underneath, we had a move in utilities, Real Estate Investment trusts that was incredible. Eit move, but its almost as if the whole group is saying we are going to go a big slowdown, but then the Technology Stocks are saying were going to a comeback. So, its kind of like everybody won. So goldman may be negative and the its possible we do nothing, but underneath, wow, theres a lot of activity. Nasdaq up almost 7 in july. Does that not, does august not portend some reversal, some give back . There should be, but if were done earnings, people can protect. People can extrapolate happiness and i think we are at the beginning of this major consolidation. There was a piece in the over the weekend, journal, about how people like the Technology Stocks from dividend. I think they should like them because theyre merging. I counted 80 stocks in technology that are just kind of out there. Waiting for the marvel technology, right where something could happen. To you know, amd. Micron. These are very cheap. Even after their moves, so im not going to rule out that were not going to see a lot more deals. They just dont need all these companies. Does corvo need to be separate from sky works . Lets get together. They have been typically had high ralluations, so it has been supportive. So theyre being take unders. Look at broad com. Most loved deal there is. Yeah. Those deals go higher. Almost all the companies by the way in the last six months make a deal, stocks been good, overlooking tesla because i dont know. I throw my hands up. Its a great life. Really quick though, dudley saying fed hikes still alive for the year. Markets complacent. Even off of the 12 gdp number. I didnt like that number, but i think dudleys saying the party line, but people want to make something of it. The idea of shotgunning some news into the fed, lets get away from that. I think the fed is saying look, if things get stronger, were going to do something. If things dont get stronger, were not going to do anything and the number friday was off it. Economys back to where a lot of people can complain its not creating jobs. See the jobs number on friday before we nail that one down. Estimate there, 180 after the big 238 number we got prior. Last number was so incredible and you cant believe both parties talk about how weak the economy. Right . Thats true. Both parties. Some of the parties are talking about other thing, but in terms of business, you dont hear a lot of people say you know what . We really created lot of jobs and were going to stick with that game plan. Business investment have been one of the key weaknesses. Theyve been buying back stock. If youre trying to get a job. Dividends. Did you, i mean, the chevron call, its a huge company, by a way, a very good call and the stock was up. Even though oil was down. What does that tell you . Listen, lets put our perspective, our priorities out there. Dividend. We were all doing the math on exxon emotional on friday and discussing the fact that it doesnt work. What, the the math does not work given the numbers from exxon for example. They will have to lever up their Balance Sheet more to support. But they dont have to drip. Cut that cap exto the bone because theres not that Many Properties that really work. Both these companies, lets just give them credit. They always fell, particularly exxon. Too conservative. Here they are. Its kind of like business as usual for them. Impressive company. My hat is off to exxon. Ive been critical of exxon. I thought they werent spending enough. Rainy day spending, paying off. One point, talking about this deal. Its like, the its nothing. Thats an example of what everybody else would say is a gut punch, but not then. Theyve got so much money. Smart guys. Jim mentioned tesla. They are buying solar zls city in the deal ralled around 2. 6 billion. Elon musk, the chairman and biggest hair holder of both companies. Phil has highlights. Still going on in fact right now, somebody is saying to elon musk or asking, how do you rationalize this. You didnt have swren motors buying exxon emotionmobil in th. Hes saying youre looking at this in the wrong way. Well talk about in a little bit. 2. 6 billion all stock deal. Solarcity shareholders will be getting shares of tesla if this deal is aprufed, 0. 1 shares of tesla. That works out to about 25. 37 per share for solarcity. That is a little bit below what people were expecting. Thats why you see the stock for solarcity coming down lower this morning chlts just a few minutes ago, elon musk was talking about this three to fiveyear window that tesla has been targeting as the sweet spot of adoption of electric vehicles and expansion of Energy Storage. Heres musk talking about why this deal makes sense right now. In order for the right scenario to trans pyre in three year, we need to take the action now. Cant take it in three years and have it simply be the right move. It takes time to get there. He did this deal is teslas factory. We were there last week for the official opening of the gigafactory. When we were taking the tour there, we saw the Energy Storage units they are selling to residents around the country. Theyre shipping some of those power walls. They expect to increase those deliveries over the next several years and become a large part of the business. But make no mistake. The model 3 and expectation of selling several hundred of those and the production, thats another part of what he believes this deal makes sense. As you look at shares of tesla and solar city. This deal still needs to be approved by the disinterested shareholders of tesla and solarcity. So musk will not be voting on this deal. He says hell abide with whatever the shareholders want, but also remember a lot of the large institutional firms if you believe the reports, have already indicated those who own tesla shares will go along with this deal and it will likely be approved. Well see what happens by the fourth quarter. Guys, back to you. Thank you for that. Our phil lebeau in chicago. What to you make of this one stop shop clean energy thing . In talking with musk, he has this vision that there will be a huge network of solar power around the country. At some point, were going to be able to generate all the solar power we want from a part of colorado. Hes thinking very big about we will get our lek tris thety. The lack of friction and how were all looking at it as being theres these power plants and maybe they cant be nationwide. Theyre regional. Hes thinking about rooftop solar. 50 million roofs. Hes thinking about the, thats how many there are. Hes thinking about the idea that there wont be that kind of friction. Hes thinking about ten years from now. Now, were not used to that. And im not say iing that like this is a great deal. Im just saying hes thinking ten years out. Zpl wants to empower. This was from master plan. Empower the individual as their own utility. This is the sequel. David cranes nrg. Hes gone. Yes. Come on, please. Its one. Go if there again. Cant help himself. Every time you go there, ill do go there. You know the papers before the papers know things. I try to. Had the same vision and it was too expensive. It was. It wasnt right yet. It was too visionary. Its true. But elon musk is perhaps in a better position because he controls this company and controls solarcity, although again, hes disinterested here. He will not vote in favor. In fact, theyll have a go shop at solarcity for 45 days in which theyll try to find somebody else. If in fact they were to, he actually would actually be obligated to vote the proportion of his shares in favor that other shareholders do, if you follow me. Theyve tried to put in any number of protections to make this appear fire. Lazard gave them a fairness opinion. A bit below the additional range when he filed that 13telling us he wanted to buy the rest. It could be ge, eaten. The guy that makes the box. Isnt this all about lowering their borrowing cost . They have a ver ration appetite for capital. They should. Only getting paid back via the lease. They sure do and the companies i just mentioned, thats just kind of like who would kick the tires. If there were tires. Youve got to have tires to kick, dont you . Youd light up a whole city just you. Musk saying that we are thinking that were looking at electricity very satsically. We believe you have to have these power plants and hes saying thats a pipe dream. What its going to look like ten years from now is very different because were not going to be stuck with a grid. This goes back to that famous Morgan Stanley upgrade two years ago, arguing this was going to be a grid company. Its a grid company. I think people should recognize sometimes, were as jay leno would say, were smalling thinkers than musk and we say, youre kidding me. But the fact that stock deal is up 20 bucks when he did it, hes doing another deal. Secondary that tesla did in may. There are people who made a lot of money with this guy. There are. Hes a visionary. Wehere the vision goes will be very interesting. I think visionaries are jay leno. We need more of them. Why not. Fewer what. Thinkers who really have nothing or just looking at their feet. Right. Did you mention wilfred frost at 1 00 . I did not. When we come back, a closer look at ubers deal and Warren Buffett set to introduce Hillary Clinton at a Campaign Event today. As jim says, today on power lunch, an exclusive with jamie dimon. Thats at 1 00 p. M. Eastern time. Take another look at the premarket dow up six months in a e row, but the first few days of august have historically not been kind. Back in a minute. Im just a guy who wants uber agreeing to sell its chinese operations to didi. Worth about 35 billion. Uber will hold a one fifth stake in the company. Also calls for didi to invest a billion dollars in uber. Now to 35. In four months. Yeah, i dont know. Study thg deal, i came back and said these valuations are kind of among friends. Its kind of well, who i trust valuation. Agree to your, so you agree to mine. Thats right. Just seemed to me, hey, you know what . David, youre worth 50 million if you say im worth 50 million. Just put out these leases. It seems uber says this is very hard country to do business in. We are going to lose a fortune here in some way, i think thats the big take away herement i continue to hear from others who are trying to compete in china perhaps them choosing not to any longer. It is very difficult to do business there. Clearly, there are some multinationals who must do business there and some who have succeeded greatly, but its not getting any easier. And we know ubers been losing money in china. Subsidies and so forth trying to take market share, but youre fighting an uphill battle in china when youre not a chinese company. I remember when white way, they came on mad money and talked about how, we can make plant based meal and it will be so much cheaper in china than the cow milk. Not enough cows in china. Milk cost a a fortune. It made so much sense. Then i went over there. Its like, hey, pay the piper. Its the way the Chinese Government wants things to go. They may ultimately suffer the consequences of not introducing enough competition in their home market, but right now, the move when you speak to people more expert in this, but i listen to them, thats the way its going. We know that. We see it and it just becomes more and more difficult to try to compete there as a foreign operator. People like to partner because theyre told so. Its like, heres my offer. Senator. Right. You dont think it signals a greater unwillingness to go up against some of these entrenched government interests, competitive interests and other countrieses too. It shows maybe shes interested, this is making money. Making some money and that would be something that eventually, some of these people who invested would like to see. Right . Dont you think thats part of the imperative is to become a company that makes money . I think when youre getting in there on these late rounds, the latest valuation, 60, you must be starting to think, okay, going to just keep losing money for how long, especially in china. Amgen, amazon, they lost money for a long time, then people loved them. And they loved them more than ever. Now, its kind of a question of how much he wants to show. Is it . Could they be profitable if they wanted to be . On friday. I think amazon no, im saying uber. I dont know because u. S. Is so hard. I think people forget, san franciscos hard. I dont know, how about if they made the contractors independent contractors, where there were different tax inserts. Ubers gotten away with a positive regime here, yet still dont seem to be making a lot of money. I believe people feel like its a necessity. Like amazon, we come up with ways to believe. We believe. I love uber. I think that people, venture capitalists, they take it, they love it. We inhale oxygen, we love oxygen. Just a kind of not really business, but we take it in. And i think uber has to become more like a business and i thought thats what this was. I thought this was very smart of them. Its like, were going to be a business. Not going to lose billions every single year, we lose, thats not our plan. I thought it was very smart. I thought travis did a good thing. If thats true. Its going to mark a big turn in their evolution. Yes, it sure would. When we come back, look at cramers mad dash. Count down to the opening bell. Take another look at the premarket as we kick off a busy week with a jobs number on friday. Mar squawk on the street from the nyse in a minute. Can an stablished bank move like a startup . Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. What powers the Digital World . Witcommunication. D, like centurylinks Broadband Network that gives 35,000 fans a cutting edge game experience. Or the network that keeps a leading hotel chains guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. Businesses count on communication, and communication counts on centurylink. Itslexus performance iny to streetlegal form. Taking for a limited time get great offers on our complete line of f sport performance vehicles. At the lexus golden opportunity sales event. Trolling for a gig with cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. All right, about seven minutes before we get going here at the new york stock exchange. Start the week off with our first opening bell. What do we got on mad dash . Theres a calm called iotis. This is a company thats been around if for a while. And whats important here that people dont understand is this is biogen believing in their spinal Muscular Atrophy drug, which a lot of people have questioneded. When you look at this move, it was basically because people felt this drug didnt work. Well, theres a loft potential milestone payments. Theres 12 short position. Biogen comes in, it goes up, too. People are quickly saying this could be a great, terrific, new look at that chart. Terrific new iron in the fire for biogen. Now, i think thats a little bit aggressive, but i do point out that once again, when you get anything involving one biotech and another, people get very excited. A milestone. As you talk about with i feel with the bigger. Gilead, jeffrey says maybe they have to spin off their hepc. Cell gene tells you theyre undervalued. In addition to santa fe all the companies are taking a closer look. Its one of the reasons why i dont want to short the nasdaq, so to speak. The biotechs are in play. The semis. By no mean ss this somebody saying you know what, we need lets just combine, no, its a need. Theres a strategic need to have new drugs in the pipe. The other stocks just arent going to move. A lot of deals could happen here. A lot of companies down and out. Not on their pipeline, but on their block. Nice move as you said. Biogen as well. Were going to keep an eye on that sector and a bunch of others. Weve got the opening bell here in about four and a half minutes. Stay with us. I sleep extremely hot. I wake up and i just feel like sticky. Have the windows open, the ac on id close it in the middle of the night. Hed open it in the middle of the night. It was a nightmare. My new tempurbreeze stays cool to the touch. Not cold but cool. It naturally adapts to your body and somehow creates the perfect temperature for you. I feel like this was made just for me like they had me in mind. I dont know how they do that. vo sleep cooler, wake more refreshed. Discover the new tempurbreeze. Announcer theyll test you. Try to break your will. But however loud the loudness gets. However many cheese puffs may fly. Youre the driver. The one in control. Stand firm. Just wait. [click] and move only when you hear the click that says theyre buckled in for the drive. Never give up till they buckle up. Youre watching cnbc squawk on the street live from the Financial Capital of world, the opening bell in 90 seconds on a week where were going to get a jobs number, a lot of earnings. Bank of england. Olympics start on friday. And then a lot of research today, jim, i dont know if you want to tackle some of these calls on etsy, tjx. Etsys important. Why . Its an arts and crafts amazon. Citi upgrades in dubai. This is a very, 14 price target. The reason im excited about it is because this is a company that initially was a Company People felt was just over hyped. Overvalued. Management got very serious. And they have a real business model. Anyone who sold on etsy knows that this thing is for real. Its a great mark. They fixed up their website and i think its a great little company. Terrible ipo. Thats my, yes. Terrible ipo. Really soured a lot of people. I want to say two months. My daughter sold stuff. Worked at a company and was i couldnt believe how exciting the story is. Keep track of that etsy. Is ceo is very good. Get to the opening bell and the s p at the bottom of your screen. Celebrating the centennial of the migrating bird treaty. Manufacturer of impact resistant windows and doors. In addition to the etsy call, bmo up to outperform. You know, barclays and wells downgrades. I like the bmo because its about american ingenuity, versus compajapanese company. I think theres a lot of people just pulling for harley because its a Great Company im looking at that controversy between the ups and downs. Harley has a finance arm. Someone who works for me, theres a lot of ways to skin the cat. Cinnamons been lousy around them. Gl right. Heres another one i thought was interesting. Theres a bunch of Oil Companies that are upgraded. Pioneer, jpmorgan pushes it. Continental resources, has anyone like looked at the fact oils great here . People dont seem to care. Its like, i like them even more. Just keep in mind that the analyst rs getting positive while these actual crude is going down. Weve been through periods where oil was the market an on top of the equity market and then no longer. Did some firm get blown out . Some guy was putting in a lot of money. Maybe they took that guys money away. He probably sat in a room. What was he going . Playing grand sheft auto, then boom, sell the s p. Its almost like that guys like a multitask. Whoever was doing that. Remember on every time oil went up, we thought the equity markets were up. Mark szucker burg, hes talking about the need to be, to do many things at once. I always have these image of these traders saying let me yus order dinner while i bank the market down. See where oils are. Youre talking about ph. D. S and other areas, writing these complex programs who dont know anything about the tok market, but thats what they do. And then it just works. Just keeps going and going. It was selfgoing for a while, but the dollar and oil did not comply with the july thesis. Gl no. And those people, ive always wanted to know, when you go to present, do you say my model is x and someone says, hey, that model didnt work. It worked before. How do you keep the money under management when thats what you are . Or to you just present yourself with a magic quantity. Your quantitative funds have done far better than stock picking funds. So, they get their allocationings then. Look at renaissance, one of the greatest hedge funds of all time. You started. Now, james simon, here not too long ago hes a bright guy. Yeah. Lot of money to charity. I know these guys never point it out, so i point it out for them. Lot of money. To your point, almost all the top loser rs rig, marathon, devin, you name it. Are in the red. We are going to get rig and marathon earnings this week. Rig did a deal with the partnership, trying to consolidate that. By the way, thank you to security but, today, theres a giant ethane shipment coming out of texas where the texas, where they there was a battle where the texas was going to be number one texas was like its own country, well, this was like the battle town, but just want to point out that ethane exports are going to be a big part of our sizable instruction build down in texas, where there are huge plants being built to either fracture to get it out of natural gas and ship it and theres tremendous demand for our ethane in europe and all around the world, so keep in mind the amount is hook in philadelphia and out of texas, this is a major export and a major creator of jobs that is is not talked about enough. We are very good at monotizing all those natural gas liquids that have been found the last few years. Pay attention to that. Not just oil. Its a Technology Advance as well. Thats right. Yeah. Not a lot to report heerk not a merger monday. Talked about solarcity, but we did get the proxy from deknown and white wave. White wave was trading above the bid price for a while with the idea that while somebody else come in, this is potentially a valuable asset. Whats interesting is that the board appears to have approved the deal despite not shopping the company. Quote here. It was not likely that another party would be willing to pursue a transaction at a value in excess of the value offered by deknown. And we believe the board of directors bhooef negotiating only with den ork n was not likely to result in the best for white wave stockholder, so they went with denon. They bumped to 55, then 56 and finally, 56. 25. Really . Thats all in the proxy. Always fun to read a background. This is not very interesting because its not like, oh, we talked to general mills. Thats what i was thinking. General mills and nestle would be involved. 56. 25 is a big price. Very big price. And they did very well for people the whole way. This is the dean foods spin off. They waited until all the things you talked about with the two years youve been going into for many years. Youre the only guy, you read the proxy. I was busy watching god maufath ii for the 40th time. Always worth watch i. You went to college to get stupid. Want to talk about what verizon is up to . The last couple of weeks. Kick it back. Ive got to. Ill go there because i did some work. Its a company is it a hair Salon Company . Ulta was recommended again today. 730,000 subs. A cloud based company. Say you have a bakery and a couple of trucks. Well, theyll send those out or say you have a Heating Company and they want to send oil. You never see those heating trucks, they always block the road. Thats fleet management. Fleet management is a very Good Business for us verizons got a big fleet. Verizons looking more an more like you know, a fleet internet company. Service. Data. And if its true that the price wars are over among t mobile. Wow. A lot of cash flow. What do you think about that . Well see. Isnt someone always going to come in and try to take customers as long as you have four players . What do you think jonlg ledger is going to say the price wars over . With the introduction of the 7 from apple where you get a new round. Gl thats a good point. Hear anything about the 7 . Cirrus logic said some stuff about the 7. Theyre not allowed to mention apple, which made me feel good about the 7. A lot of orders, the sound portion, microphone portion. I know people are still, the cognizant is still down on apple. Even though they put a billion dollars. The cirrus logic calls should be raeld and the guys were the first guys to really introduce the concept of not ever mentioning apple, so its just right in there and cirrus logic was up huge. There may be manager going on with the 7 that people dont recognize, which is that apple and i think verizon, the same sper view that i had where he said theyre probably going to buy yahoo , was saying the 7, listen, its a game changer. Who thinks that . The bar is certainly low. No ones expecting magic out of this cycle. Whats with the kanye west thing in the tweet . Still reading that. Not up on kanye. My son is a fan of his though. North west. Yes. Is he worth buying . They said if the kid ever has a clothing line, theyve got to call it north. He was a very powerful guy, a guy thats very much cutting edge. Pay attention. Okay. I will. Im too old. Gl dont say that. If youre too old for that, then im going a quest guy. Ckanye, what can i tell you. On the floor. Dow is down 27 to start the week. Good morning. Jeff gunlock says sell everything. Goldman sachs says lighten up on stocks for the next three months. Were opening flat. The problem began is oil. Oils got a 40 handle on it. Not where it was supposed to be. It was supposed to be closer to 50. You can see all of the big oil names here. Even diamond offshore, they beat by three cents, 16 cents. Doing a lot of cost cutting. Continuing to do cost cutting. Doesnt matter. Still down. You want to see how tough the oil business has been, particularly the mlp business, master of limbed partnership business. Look what happened with transocean. Two years ago, it created transocean partners. An mlp. Consists of off rigs. Went public at 22. Transocean is now buying back the rest of the company. Theyre now buying back the rest of it. Its a share for unit merger. Valued at roughly 12. 56 a share. It went public. Two years ago. 22. So essentially, half the company, half the value of the company at this point. Had a great yield of about 13 , so that illustrates how difficult this business is right now. Europe, europes down a little bit. Whats important is we had a European Bank stretsz test over the weekend. They were in line with expectations. There werent many disappointments, but the banks are still mostly for sail. Deutsche bank, royal bank. Ubs is on the upsite. Uni credit is the biggest bank in italy. They had a a core capital, above the minimum, but short of the average. Its down rather dra amatically. No real relief here despite the stress test coming in. Fairly good news overall. U. S. Banks here on the upside this morning. The regional banks have held up fairly well in the last two weeks. The markets been mostly sideways on low volume and the banks have held up well, particularly, the regional banks happened again today. We see some of the kwacasinos d. Sands down here. Thats no surprise. They had gaming revenue figuring out of mccow. The business spell for the 26th consecutive month in july. Win in las vegas sands, both get roughly 60 of their revenue us. So thats impacting them again today. Finally heard julia talking about the lackluster mf business. Heard that from Amc Entertainment this morning. They missed by two cents and said trends were starting to reverse towards end of july. The numbers were better. Amc is exclusively an american company. Theyve 100 of revenue frs the United States here. They mentioned theyre spending a lot of money on renovating the theatres and made a big deal about the reclining chairs they have and ive seen them. They are quite comfortable and you have to reserve in some of the theatres now so theyre make ing a lot, about that particular part of it, but u again, lackluster sales is the main problem. Rig now, the dow down 34 points. Thanks a lot. To the bond pits as well. Check in with Rick Santelli in chicago. Good morning, carl. Every email ive received this week and this morning, pretty much, nobody believes the flaud stress tests of europe. However, as an asterisk, pretty much everybody emailed me that in some way or another, traded on the notion of the upcoming results towards the end of last week. Its kind of a common theme in markets, actually. Markets move. Whether the informations viable, believeded or not, they still move and when markets move, trader rs forced the respond. Many cases, theyre the proactive force or the rhythms behind certain trading. If you look at a two day of tens, yields up a bit. When i walked in, twos three 30s. It was up three, four, five, six. Now, everything moved in a parallel shift and we see we moved a little lower in yields now up two, three, four, five, so when you see parallel shifts, that means get ready for a big number. Efbs kind of trading off the same type of inputs and i think the employment week are important, whether adps or fridays bureau of o labor statistics. It clearly shows you the dynamic. If we open up the chart to july of 2016, i want you to see the historic bottom going back to the ike administration. Open it up to 2012 in july, julys a big month. You could see the first low at 139, then 135. Could this be a Double Bottom . N many think it could be, but many thought 138, 139 would never be seen again. The dow index looking at a one way chart and then look at a chart opening up towards the beginning of may and the reason i find this fascinating is sure, it went up u and now, its giving it back. Everybodys talking about energy and commodities, i get it, but when you pick the same may 2nd for the crb, its got a whole molot more horsepower. Thab ma gives you a clue about what many believe is demand for commodities may say about the Global Economy. Carl, back to you. See you in a bit. Rick santelli in chicago. When we come back, Business Leaders and the race for the white house. Warren buffett looking to give Hillary Clinton a boost at a Campaign Event later on today. Dows down 27. Oils down, up 76 cents. Back in a minute. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. Consider an aarp Medicare Supplement Insurance Plan insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement Insurance Plans, it could really save you in outofpocket medical costs. So, call now and request this free decision guide. Discover how an aarp Medicare Supplement plan could go long™ for you. Do you want to choose your doctors . Avoid networks . What about referrals . All plans like these let you visit any doctor or hospital that accepts medicare patients, with no networks and virtually no referrals needed. So, call now, request your free guide, and explore the range of aarp Medicare Supplement plans. Sixtyfive may get all the attention, but now is a good time to start thinking about how you want things to be. Go long™. So i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices. The markets hot. Sync your platform on any device with thinkorswim. Only at td ameritrade. Hillary clinton getting a boost from prominent Business Leaders. Warren buffett will introduce her today in omaha, which will highlight a tud di showing the benefits of clintons economic proposals. Tim cook is is planning a fundraiser on august 24th, as a private citizen, not as a representative of apple all after mark cuban end dorised clinton over the weekend. Hillary clintons america, the American Dream is alive and well. And theres no place that knows that better than pittsburgh because we are an American Dream city. Now, trump has haerld ham and will burr ross, but youre beginning to see these Business Leaders pick a side. Zpl a lot of people know him from the great show, shark tank. I know him for i dont know, about 25 years and he does nothing idly. He is a who has thought about the election process, developed an app to make it easier for people to get registered and has i think been in favor of democracy. In other words, not necessarily, this is not a surprise, but hes been in favor. Originally, also was listening to trump and not conceivably going to, willing to support him if he heard the right things and he didnt. I happen to be very fond of him because having been around him for many years. I always find him for straightforward. Not a great deal of hypocrisy. One of my favorites. I wish he were the own r of the 76ers. Theyre going get it together. Its a fiveyear plan, dude. Exactly. This is a second fiveyear plan. Can you get him on in. Maybe. That would be something. 1 00 say. Thats taken. That is taken. As wilfred frost will talk to jamie dimon. Shes been taken. The next 95 days here, jim, are going to be volatile. In fact, theres been work done today about how markets behave in an Election Year through august. September, october. Gl theres the uncertainties have been incredible give p what this market has done. Remember brexit, wasnt that supposed to destroy the month . Turned out to be a great month. I think this year is a complete anomaly. A lot of things have not happened that would be on plan. I thought the market would do nothing, but individual stock, i didnt think there would be any deals. Big numbers much better than ek pechted from the likes of facebook, amazon, alpha bid. That was not in the cards. Gauntlet. Jim, you said it was going to be a tough week, maybe down. I didnt think all four of these, including apple. Its interesting, facebook, despite the strong number, doesnt do anything. The stock. Zwl no. The guy i talked to was correctly pointing out, if this is all that the stock does on the best number ever, its not a bad idea to bet against it. Thats that mean . I think it means that people arent looking at the out years. Theyre just not. Look a t the next quarter an saying this is about as good as it gets. Made a move off the focus list. Off the merrill one focus list. I feel thats off of root one. Did not have legs is my interpretation of it. But theres a lot of facebook has historically after the quarter, done well. I thought mr. Tl might be some nder selling. We dont know. Every kid wants to get, can i just say if your kid is in comp signing, theyre trying to get a job at facebook. That is the most sought after job. Theyre building these apartments for people so they can kind of have a compound. Smart people. Can you imagine getting there . You are so much no beer, right . No more pizza and beer. Just think. What are you thinking about . Talent is the key. Scary how smart they are. Scary. Dows down 30. Youre here time for stop trading. Strangest thing. July 28th, celgene reported, this stock is now up 11, 1 points and igniting a big rally. Biogen, amgen was decent. Watch for genron. Suddenly, this group has legs and ive got to tell you, this is highly unusual to pass the torch from you know, software to chips and now to biotech. This is what im talking about about why its so hard to be negative. This group has one of the great shorts of 2016 and now, its treacherous. Gl whats on mad tonight . We have kimco. Theyre not being put out of business by amazon. How is that possible . People like yield. But ive got to delve into this because again, like biotech, like this is an unlikely move to seed Simon Properties so strong. Really so strong. Every year, the reads are among the best performing group of assets. Honestly, these stocks, if simon fell a couple of points, then who cares about the yield. He would say enough. 40, 50 . This group is so hot. Property 72. 5 billion market caps. Isnt that unbelievable in. People really real estate for money you dont need for ten years. Equities. Everybody wants, the money coming out of stocks. They want real estate and i dont blame them. You can make money on a lot of real estate. Get in that home business. See you tonight. Mad money, 6 00 p. M. When we come back, a lot of controversy survey rouyning the president ial race. Today on power lunch, wilfred frost with jamie dimon. Back in a minute. Rs insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Welcome back to squawk on the street. Kick off a new month today and a new week. We have a lot of earnings, lot of macro. Got a bank of england decision later in the week and now, Economic Data crossing the tape. Lets get to rick for that. Wow, some interesting data. Lets take the june lead of construction spending. We were expegting half up 1 . Down. 6. Last month, down. 8. Its revised up about what we missed today to minus 110. But heres what the last three months look like now. Minus for construction spending, three necks in a row. Minus two from april, minus 110 revised last month, april, may, june. The last time we had three negative month to month changes was november, december, january of 2013. Its rare. So, we want to watch that. 52. 6 is our july read for ism. Now, 52. 6 is a little light as to what we were expecting, following sequentially a bit lower, 53. 2. Lets look at the employment index. It broke the boundary for expansion and contraction. Moved down to 49. 4. Thats something to Pay Attention to. Response in the marketplace . Not a lot. Yields are mostly higher. Sahr a thank you very much. As carl mentioned, august starts against a backdrop of weaker economic growth, lower oil prices. What does it mean . Joining us with their market outlook, Katie Stockton and jim paulson. Chief investment strategist at Wells Capital management. Construction spending at a oneyear low. Manufacturing, youre still expanding. But coming in a bit light. Anything to worry about off that weaker Second Quarter gdp number . Well, its generated a lot of concerns. I think its created ed a raise possess miss m a bit in the shadow of brexit and bad gdp numbers and other bad numbers. Myself, i dont the economy is growing in that 2. 5 range its been growing at and i think theres data suggest thag maybe the Global Economy is picking up a little bit rather than heading south. One of f the things i monitor, if you look at west packs positive surprise global index, its made its biggest and fastest move upward of the recovery since march and now resides at one of its highest levels of this recovery. I think weve got everyone across the globe for the first time this recovery pushing up from europe to japan from china to canada to u. S. And i think we might be in route to a global balance at a time when a lot of people are concerned about growth weakening. Its an interesting call, considering when we talk about the Global Economy, investors say it looks sluggish. This morning, jeffrey gunlock, sell everything. Yeah, i kind of think were going to have another leg up yet more so in the International Markets than here. I think what the u. S. Is going to struggle before the year is out i think with the need to raise Interest Rates in that discussion again, but i do think that were going to see better growth reports coming out of global economies, maybe at the same time. And i think that could generate some optimism and another leg up in this bowl. Zpl so, katie, the question is looking specifically at the u. S. , how much has already priced in . If it is about better global or u. S. Economic data, per stock, were coming off a month, 3 gain, more than 6 for the nasdaq, what next . We saw the s p 500 break out from its longterm trading range. Dont think we hear Katie Stockton. Try and work on her audio and get back to her in just a moment. She is standing there. Well work on that, jim, but as far as youre concerned, what sort of levels are you talking about when it comes to the s p . Are you saying were going to march in place and the action is going to happen abroad . I think theres going to be a bigger move abroad is my guess. I think the s p breaks 2200, maybe up towards 2250, but that to me is probably where it might peak out this year over all. I think the better anchor will be abroad. I would say yourng look at whats already happened from the message of the markets here. Developed markets across the globe are up 15 to 20 off lows. Emerging markets are up 25, 30 off lows. Industrial Commodity Prices are up 15 to 20 off their lows. Theres a hoft lot of market message saying theres a global revial happening here and i think i would prepare for that by going offshore and overweighting those markets and having more cyclicality in my expo shoour rather than the Dividend Aristocrats or the conservative staples or utilities. Id go more towards technology, industrials. Materials. Those types of sector, which i think might lead in the second half of the year. Now katie, i think we have you. So, tell us your view now that weve seen the bullish momentum in july. What about august . I like jims point about the markets message. I think its telling us something now. We saw the s p 500 break out from a wide trading range. You look at that range, the width projects to about 2400 over the long teterm, so i thia bullish buy is really dictated by the breakouts weve seen. So far, earnings have been well absorbed by the market. Were seeing a lot of gaps on the chart, so thats a Bullish Development and does suggest that august should be more roll volatile and jet captures shortterm lows and i think with that in mind, we should be looking for opportunities. So, what about katie, this idea that we could see a sector rotation . Do you agree with jim that you want to look toward more cyclical stock, industrial, technology versus the high divide dividend payers . I do. Were seeing it emerge in the sector rotation work in the last three or four weeks since weve seen that breakout. Weve seen rotation into the likes of technology into industrials. Out of staple, out of ewe tiutu. All right, thank you for joining us. Both on a monday morning to discuss these markets. Katie and jim with the dow 15. Politics of course this among. Donald trump set to hold his First Campaign top in ohio today since the dnc. His somewhat is on damage control. Russia and of course the family of the muslim u. S. Soldier killed in iraq. Then theres mark cuban getting into the fray despite calling trump good for american politics in business now taking a different tactic. Take a listen to this. You know what we call a person like that, the screamer, yellers, the people who try to intimidate you . A jag off. Is there any bigger jag off in the world than donald trump . Joining us this, former Clinton White house aide, keith boykin and alex conan. Guy, good morning. So, clinton appears to have cuban. Going to make an appearance with buffett today. Tim cook going to hold a fundraiser. Do these endorsements hold value . I dont know why shemt it is the support of billionaires when its the middle class who will be deciding this election. The economy is starting in august weaker. Thats what donald trump should be talking about and what she should be talking about rather than highlighting the support from millionaires and billionaires. She needs to be talking about the plan to make jobs. Makes sense. Keith. Try to contain your laughter. Its funny to hear republicans criticizing people associating with billionaires. I thought they wanted everybody to become rich. Its a reflection of yus how decided the Republican Party is. The koch brother, refusing to support the Republican Party nominee. I have never in my political lifetime seen the Republican Party this divided. I think donald trump is a uniquely singularly devisive candidate. Not sure you disagree. I am a republican and i do not yet support donald trump because i disagree with a lot of his positions. Hes a different kind of candidate. Hes a different kind of republican. And he won the republican primary. If hes going to be competitive and beat Hillary Clinton, he needs to be talking about the economy. Not this other stuff. On crimea, the khan family, the debate schedule, whats important here . The news cycle moves so fast now that it seems unlikely that anything now people are going to be remembering after the limbo c olympi olympics. Youve seen some of mccains tweets today. I agree with what alex said, too. The idea that this will last into november is unlikely largely because trump, every week, will Say Something to generate controversy. Republicans like jmds today, will have to reputeuate something else. I think thats going to be a continuing problem, so, yeah, it will be another story and another story. Its very bad for the Republican Party. Keith, pennsylvania is in focus right now. Hillary clinton was there. Shes talking about the economy. She was on the floor of a manufacturing facility, talking about being Better Together and america is not in decline. I wonder if that message works for a state with higher unemployment than the National Average and less job growth and a state that is also been hit hard by the decline in manufacturing in the last decade. Youre right. Pennsylvania has been hit hard by manufacturing job losses and thats a message shell try to focus on, but i think shes offering more Real Solutions than her opponent is offering in terms of how to deal with that. All donald trump is saying is i start a ade war. Lets build a wall. Hes not really offering any solutions on how hes going to increase wages, create new jobs. I think that the Republican Party platform and the Republican Party philosophy are contradicted by what donald trump is saying. I think the Republican Party is so at odds. Go ahead. Pennsylvania, ohio, where these candidates are campaigning, that is ground zero. If Hillary Clinton can win one of those two tate states, donald trump does not have a path to the white house. Its actually polls well in pennsylvania and ohio. Thats why hes overperforming there say how mitt romney or john mccain did when barack obama won. Protectionism. He says fair trade. Any hope well have a substantive debate on any of the key issues at all . I wouldnt hold my breath. There are policy disagreements between these two, but so far, weve been distracted by questions of temperament, honesty. The cop stitch wensy we tend to deal with, corporate america, investors focus on Corporate Tax reform. Hillary clinton has a plan that would involve overall tax reform, touching on corporations as we. Trump touched on it, also. Is there a hope we get sense from the two plans and candidates as to how theyre going to approach that issue . I dont think were going to have a debate about it because donald trump doesnt have a consistent position on taxes. I dont believe what he believes and i think thats the core problem with his candidacy. Yes, its working to reach iout to disaffect aed voters who want to message the strong man, but people in the business community, people who want steady leadership and consistency, donald trump is not offering that and i dont think were going to get it by november. But paul ryan and other Republican Leaders have offered very specific plans. Whether or not we want to move in the direction of paul ryan or go but hes not running for president. Offered a concrete agenda that the donald trump is elected president , republicans believe he will advance. You can see yourself going through the cycle endorsing no one. Im not going to vote for Hillary Clinton, but donald trump has not earned by support yet. Im the first to admit, im in a tough spot as are a lot of republicans. I did not want trump to be our nominee. I worked for another candidate. He didnt win. Now im like many undecided voters out there. Im not going to vote for Hillary Clinton, but trump hasnt earned by short. Is florida possible for trump . Sure. Right now, polls there close. Marco rubios running for reelection. Doing very well there. I expect hell easily win and win the general election against weak democratic opponents. I think donald trump is spending a lot of time in florida. I lived in florida for seven years until last year. I dont think donald trump will win florida. Because of the hispanic population. I think hes going to understood perform and were going to see a florida victory. Reporter fkz. Ohio and pennsylvania are different. But florida, i dont think he has a chance. Guys, hope to see you soon. Thanks. Coming up on the show, tesla announcing it is buying Solar Energy City solarcity. An all stock deal. What it means for the companies and elon musks master plan. Stay with us. Youre watching squawk on the street. [tires screech] [car horn beeps] [texting keystrokes] tesla is buying solarcity. Phil lebeau joins us with more detail. A lot of questions around this one, phil. One involves the pricing of the offer that has been finalized here. Coming in low e, about 300 million lower than what was originally proposed. In one run. June 22nd, june 23rd. Here is the deal that has been final ied between tesla and solarcity, but remember, it needs to be approved by the disinterested members or shareholders of both companies. All stock deal coming in at 25. 83 a share. The original price range, it have. 50 to 28. 50 a share. It is expected to close in the fourth quarter. The rationale behind this is the make a one stop shot for those who want clean energy. You go into a gallery or dealership, by buy jour model s, x, maybe a three over the next couple of years. Then in process, you could also say yeah, you know what, i want to get solar insulation from solarcity. They believe that theres Strong Demand in next three to five year, especially in certain market, hawaii is a good example br they hawhere they have high costs. Elon musk is the largest shareholder in both company, but he wont be voting in this. He is recusing himself in terms of what happens with this deal. On the call this morning, he addressed this question that has come up sempl times and the conflict of interest between tesla and sew already city. Heres what he had to say. Other reporting around this merger is that the other reporting, oh, theres conflict of interest in merger. No, theyre if we dont merge. The whole point, the point of the merger is to get rid of the conflict of interest. He believes this is the time to bring Energy Generation from solarcity into the tesla portfolio, especially with the gig factory ramping up protection of the power wall units. They expect this the close in the fourth quarter, but have yet to set a date for when shareholders will vote on the deal. They dont like convinced by todays action. Thank you very much. Another deal we are looking at, uber merging its china unit with didi. Valuing the combined chinese Ride Hailing Service around 36 billion. After the merger, uber and its investors will take a 20 take in didi, making its largest shareholder. Didi will also invest a billion dollars in uber as part of the deal and weve seen lots of reports about how uber china has been losing money. I wonder if this sets up uber for an ip ork. Certainly, those investing at higher and higher valuation, theyve raised debt and have significant Capital Needs of course given the money theyre losing, have wondered when are you going to be on a road that includes profits or the prospect of them. And closing down china and making this investment is encouraging. And apple, best performer in the doe right now. When we come back this morning, zika hits the u. S. Multiple cases in florida. What the cdc is planning on doing about preventing the spread. As we go to break, take a look at where stocks is trading, dow is trying to avoid its first sixday losing streak since august of last year. Be right back. Cases of the zika virus now confirmed in south florida, but how big a threat does the voi russ pose for the broader u. S. In the impact it could have on the upcoming olympics. Sojoining us now, research and policy at the university in minnesota. Good morning. You wrote about this specific chapter back in january. How does it fit in the overall picture. We predicted it would happen. We knew we would see sporadic cases in the United States. Is the locust of the Activity Still in south america . Most of the activity is going to be in the american outside the con nen tall United States. It made it into mosquitos in close contact with humans. These are the ones that breed in garbage, small little cups of water, plastic, discarded rubber devices. Thats how they, where they survive. Not in the swamps, not in the big marshes, so where ever there is that kind of garbage, were goeng to see the problem and in the southern United States. Do you see it as a threat or as a potential to disrupt the games themselves . I dont think it will in the sense that right now, rio is actually in what they consider their winter season. Which of course is not a winter by our standards in north america, but thats when the moss cueto active is at its lowest. This mosquito will not fly more than 300, 400 yards from where its hatched, so if you clean up the garbage, theres little chance it could be a problem. So you could have a major problem in the slum areas of rio and not in the venue area. I dont think its going to be a big issue. This is the same as true for the United States. Continental United States. Were going to see very limited transmission. Just going to ask you, what could be done to prevent the disease from spedding in miami and in the u. S. . Well, if you look at a disease like west nile virus, which is surely a serious problem even here in minnesota, thats transmitted by a mosquito that may fly 30 or 40 miles on a given night. This mosquito doesnt cross the city road. Wont go across an open field. Three fo 400 yards. So if citizens just clean up a little small body of water, one little bottle cap discarded in a ditch can a beautiful i think baiting place for the mosquito that transmits zika. Thats what Health Officials are doing, going door to door in the area where the transmission has occurred and just trying to clean it up. That is highly effective. When youre in a place like puerto rico, where up to 5 of the population is becoming infected, that type of clean up, puing screens on windows, just hasnt been done and thats where we continue to see high levels of transmission in places like that. How do you compare the pace of the transmission and its geographic movement with the race for a vaccine . Are we keeping pace with this or not . Well, first of all, i think the rack serene is one that we have to be cautious about. When i say cautious, we can make a vaccine, but we have to show not only that it works, but that its safe. Its been shown it may precipitate disease against denge. I think we have years before we can make a vaccine that works and is safe. So take it off the table as being an immediate help. The real key issue is going in and cleaning up these breeding site areas. Talking about just one water can. One spout plugged with leaves full of water. Those are where these are breeding and thats the good news because you can go lot by lot, block by block and clean this up and get rid of this area, so thats whats happening now in miami and what will continue to happen in more tase kaseys show up in the United States. Theyll concentrate heavily on the area where transmission likely occur and you can virtually eliminate it from that area. At what point do pregnant women or women who are hoping or looking to get pregnant in the near term need to consider their travel plans . Well, first of all, this is not a simple yes or no answer. If youre talk iing about goingo the americas, the caribbean, certain areas of south america right now if you are considering get iting pregnant or are pregnant, i would be reticent ant going. I think the risk still low, but its a risk you dont want to take. I think once youre in the United States, last year in minnesota, we had 80 cases of west nile virus infection of which about eight or nine were very severe with real longterm impact on their health. Nobody said dont come to minnesota because of west nile virus infek. I think its premature to say dont go to florida. But when these cases emerge and transmitted because mosquitos infectioned in florida, we done want it to turn into whats happened in the americas and thats what we can do. I would say there shouldnt be a travel ban or recommendation against travel for women in the continental United States, but id be concerned about going to one of the countries of the americas where we see widespread transmission. Cant take our eye off this issue. Thank you for your insight. Talking about zika. And coming up at 1 00 p. M. Eastern, my colleague will sit down for an exclusive interview with the chairman and ceo of jpmorgan. S p just flipped posz positive. More squawk on the street when we get back. Im just a guy who wan here is your cnbc news update this hour. The pilot of the hot air balloon that crashed in texas and killed all 16 people on board was arrested in missouri in 2000 for driving while intoxicated. In addition, the Better Business bureau warned consumers about doing business with the balloon touring company he used to operate in that state. The bah lon hit high tension powerlines before crashing. Clean up continues after 6 inches of rain in a baltimore suburb on sat night. It caused the nearby river to overflow, sending Rushing Water on the main street of the downtown. Two people were killed when they were swept away by the hoot waters. The Italian Coast Guard says migrants were rescued in six operations. They also recovered five dead. Theyll be brought to italy tomorrow. Zblmpblt and jimmy walker is is. L million richer this morning. After winning the pga championship. He beat defending champion, jason day, by one stroke to claim his first major. He finished 14 under par. Thats the news update this hour. Back to you. Thank you, sue herera at headquarters. Oil prices falling hard this morning. Wti is below 41 a barrel. Lets bring in tamar and Energy Analyst at raymond james. Good to see you. You know k i have to give you credit because back when oil was running up into 50 a few weeks ago, you said it would not last and supply concerns would come back to the floor. Is that whats happening . I think that the market rallied a little bit too far too fast and now, were sort of pausinging to take direction. I dont think that in the last couple of months that the fundamentals have change d that drastically. The market is taking cues from external forces, particularly the u. S. Dollar. I think thats the primary factor in recent days. But that sunt necessarily whats happening today. The dollars firmed up this morning and oil is still down. You do still have a lot of talk about the supply, do you not . Thats yekt. But i think that you could almost just as easily make a bearish case for oil as a bullish case, so i think even though the dollar is taking some strength off the table in recent day, what weve seen post brexit is that the number of long positions being built in the u. S. Dollar has gone up continuously at the same time, people are shorting the pound and the ur o. So i think in recent say, oil has been a victim to broader rotations of capital. Meantime, your companies are reported another tough quarter. Exxon, chevron, what sort of insights did you glean from the Conference Calls . One of the reasons were our team is very bullish on oil, were looking for oil in the 60s by the end of the year, is because everybody is trying to cut spending, cut drilling active as much possible and weve seen that with rare exceptions. Almost across the board, this reporting cycle, with oil up 50 from its low, theyre still laying down rig, cutting backs. Many companies are saying xap ek next year will be lower than it is this year, which is at ateri is essentially impossible for the Global Oil Market to grow simply. Eventually, supply will have to grow as long as demand keeps growing and oil simply cannot grow with oil below probably 55, 60 bucks a barrel. Weve certainly seen that. Do you have a sell on exxon because the markets moved against you and it was one of the few bright spots in terms of positive cash flow from the quarter. Exxon is is the last energy stock that people should own if they are bullish on the commodity. Exxon is a great stock when oil prices are going down. Because of its chemical and refining overweight. It is a terrible stock traditionally when oil is in a bull market. The other name i would mention that is even more over bought and overvalued than exxon is petro from brazil. Too much bullishness on brazil, classic junk rally. A rational difference. Thats another stock due for a pullback, but in general, we are bullish on pure oil focus, enp and service companies. That are directly levered to the commodity rebound. This is a bit removed from the topic, but people looked at that gdp number from last week and some made the argument that it was a spillover from the oil affecting q1. Did that make sense to you . The Energy Sector in the United States and globally is in the dull dromms. As i said, companies are cutting spending. Layoffs. A lot of prokts. Absolutely, that is a head wind for gdp. As oil gradually recovers, as i said, we think its going to be in the 60s by year end. That head wind is going to turn into a tail wind for every economy that has a Significant Energy industry. U. S. , canada. Scotland. You know, et cetera. Zwl sfwl so, is 40 a floor herd do you agree with the bullish forecast on price. I think the market will find support at 40 and intraday basis, anything is possible so we can easily trade to 39 or below. But i dont think well stay there for any sustained period. I think that one of the things is that theres, we have a high level of short positions right now. Almost as high as we had back in february. At the same time, the net longs have not been cut by nearly as much. That suggests that the market is a lot more balanced today than it was back in february, so i think we could have some upside as those shorts get covered and just that the market is a little bit more balanced. Last bearish sentiment than back then. On that note, our own markets commentator made a good point. He said with this new decline in oil, even though it was extreme, down double digits in july, you dont see the kind of credit market the turmoil you saw early in year and thats perhaps why we havent seen it impact the oil market as much. Is that true . Yeah, most of those credit line redeterminations already happened. Kind of in the march, april time frame. The next one is going to be october, november. So, weve got a good ways to go until then. In the meantime, look, the equities are pricing in. A Higher Oil Price already. Stocks are not discounting 40 forever. Theyre discounting 55, 60 on a permanent basis, so, the equity market is actually the leading independeicator in this case. The its telling us the commodity is is dwoipg to rebound over time. Even though the commodity futures curve is actually not nearly as bullish. All right, well leave it there. With oil at 40. 67. Thank you. When we come back, take a look at the leading gainer on the s p. Upbeat tud di results for its spinal Muscular Atrophy drug. Nasdaq about 45 points away from an all time high. Back in a minute. Zblncht. Dow is down about ten points. Apple in the lead. Smaller company, etsy shares are gaining 14 in early trading. Analysts niche rated coverage, with a buy rating saying earnings estimates are too conservative and it sees good prospects for expansion. Shares up about 40 year to date. Theyve been down over the past couple of years. Year and a half or so and now, were seeing a nice little pop in to todays trade. Z 14 . Thank you. Zblmplt oaf to Rick Santelli in chicago now for the santelli change ahead of a lot of data this week. Lots of data. Thanks, id like to welcome our first guest of the week, charles, thanks for taking the time, charles. Aloha to you, too. We see a lot of important data. Gdp last week wasnt very good, but its been a wonderful month none the less for anything that has a coupon thats related to the government. Whether its our treasuries, all the sovereign, even the ones handicapped in europe. Tell me whats going on money wise . Follow on the money. Well, we see a huge inflow into bond fonds, about 30 billion went into bond etfs and mutuals in july. 135 billion year to date. So, you could see, 30 in one month and also, there could be an october surprise with the change in money market regulations. We could see money leaving money market funds going into bonds which could create further upward pressure on bond prices and lower bond yields regardless of anything else going on in the economy. Let me stop you there, charles. For some who may not be on this, mid october, we get the reforms that have been worked on for many years an even though you told me and correct me if im wrong, you havent seen a lot of flows out of money markets. I think speculators and investors around the globe are pretty savvy. They seem to be early with regard to things central bankers do, so why should they be early anticipating how this reform will hit . Is that a solid way to look at the activity in part . Well, i think all the new money is not going into money markets. The new money is going into bond funds, which is the new money market because the yields pretty much the same. But the, there could be outflows for people in the average consumer who has no idea whats going to happen in october season. We could see outflows for money market funds and people will be in distress not knowing what to do. All right, now on the week of jobs, jobs, jobs, you know, i think now, its weak, weak, weak in terms of growth. We have to balance that, just like we have to balance dividends and buybacks. You know, we follow things because they normally correlate. When the correlations break down sometimes, it puts us on the wrong scent, your final comment, sir. Well, we think were seeing a pick up in the economy post brexit. In my opinion, the weakness in the last couple of months was due to u. S. Businesses curtailing new activity because of all the hoopla and fur yor over brexit, but now were seeing breck it is not really a big deal here, weve seen a a pick up in the u. S. Economy, a slight pick up, so were estimates 230,000 new jobs in july, the biggest one month this wreer. Were seeing a pick up in wage and salary, also, but its just a modest pick up and its not the start of a trend. Its just a bounce back from the brexit fears. Again, without the zero Interest Rate world, the u. S. Economy and the Global Economy would be in recession. So, were barely limping along at a 1, 2 rate all because of central bank helicoptering money all over the world. Well, charles, thank you. Were going to have to leave it there. Thats a bold call for friday. Well see you close you get. Back to you. Rick santelli, thank you very much. When we return on the show, jason bourne hitting number one. It is the summer of sequels. When squawk on the street returns. i i gyre narrator the best place to find adventure. Kubo come on, this way. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Later today at 1 00 p. M. Eastern time our colleague will sit down for an exclusive interview with jamie dimon. Theyll talk politics the economy and of course the impact of brexit on americas largest bank. You will not want to miss the interview at 1 00 p. M. Jason bourne opening at the box office this weekend bringing in 60 million. But its a rare win in the summer of slumping sequels taking its toll on the movie business. Julia has that story. Good morning to you. Jason bourne had the biggest global debut in the franchise. 110 Million Worldwide but its 60 million u. S. Debut was still less than the 2007 bourne and does not include inflation. This summer so far had two more wide release sequels than all of last summer and this years performance is far worse. U. S. Summer box office is 26 lower than last years was at this point. Last quarter sequels were particularly rough. Fbr analyst writing the quarter will be remembered as a tile when sequels, especially those not featuring super heros came up short. Hes nevering to Ninja Turtles out of the shadows. Viacom warning that its results would be impacted by that films underperformance which prompted analyst downgrades. This morning they reported arn 11 decline claiming it that sent shares plummeting. Other disappointments have Disneys Alice through the Looking Glass and foxs ice age collision course had the worst opening weekend. And top two performing films were disney finding dory and captain america civil war. The bar is higher than ever and from netflix one movie that might have the draw this weekend isnt a sequel. Warner brothers suicide squad. Back to you. Julia, thank you very much. I want to show you whats going on with the markets right now. We are looking at the dow pretty much flat. Its being weighed town by exxon and chevron and energy is the wrs performing group right now. The best performing is health care along with consumer d discretoinary and the s p 500 fatti flattish to higher. Well have more when we come right back. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement Insurance Plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement Insurance Plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement Insurance Plans, it helps pick up some of what medicare doesnt pay. And could save you in outofpocket medical costs. To me, relationships matter. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] with these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. So dont wait. Call now and request this free decision guide to help you better understand medicare. And which aarp Medicare Supplement plan might be best for you. Theres a wide range to choose from. We love to travel and theres so much more to see. So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement Insurance Plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement Insurance Plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Attention turns to a heavy week of data for the Federal Reserve to digest including a jobs report on friday. Steve is back at hq with what investors are watching and what the fed is watching. What were getting right now is the first data for the start of the Third Quarter and that has added reports because we have that lackluster Second Quarter growth number. Its a split decision. The overall number on the low side. But production and new orders on the high side. Good economy and yet employment down below the 50 level. Heres more of the data you have to digest. Thats significant along with june consumer spending. Ism service and factory orders on thursday and then the big payroll report on friday. Will the 177,000 jobs and 4. 8 unploilt rate be enough to calm fears on the economy after that disappointing growth number . 12 is what we got on friday. So forget fed rate hikes. Some are worrying is recession ahead and the big story in that Capital Spending down three quarters in a row. Part of it the decline in spending but others say brexit the decline in earnings and the overall regulatory environment. New york fed president bill dudley saying Business Investment will likely remain soft as profits have stagnated and Election Year uncertainty. Heres the Immediate Impact for business spending. A half a point off of growth. Longer term it means workers wont have the machinery, the equipment and the technology to increase their productive. How do you read those comments that he made in indonesia that a rate hike is still potentially on the table for this year but theyre still worried about what is happening globally. He said potential rate hike on the table this year if the economy proved significantly its the notion and it was a step away and it was dovish in my opinion and the economy comes roaring back and maybe not. Maybe once this year, maybe not at all. Well see if we can get another good jobs report on friday. Steve, thank you very much. And its up a point. And the energy is a loser health care and Consumer Discretionary is the big winner in todays session and with that well send it to you for squawk alley. Its 8 00 a. M. At tesla headquaters out west and 11 00 a. M. On wall street and squawk alley is live. Welcome to squawk alley for a monday morning. Kayla and myself at post 9. John fort out today. Joining us this morning, the new york tiles columnist. A lot to get to with a lot of tech news today. Our top story will be tesla buying solarcity in this deal worth 2. 6 billion. The deal involves two companies founded by elon musk. Shares of solarcity this morning. Interesting headlines. Some say muscle scoring position grabbing the throne of clean energy in this country and around the world. Is it that simple . I guess you could look at it that way. The more