Is that he has a lot of interest in one of these companies, like he has a lot of at stake here and this is an unusual way to bring these two companies together and im not sure that it makes sense. I think he would like to have us look at it as becoming the leader of clean energy but its still, theres still a lot of questions about this deal and im not sure that it makes sense for investors for the company at all. Its not a done deal. Theres still a 45 day go shop period where any other suitors can make themselves known and musk is the largest shareholder in these two companies but it will be interesting to see how shareholders feel and how they vote about it and im wondering if you think that either of those hurdles will not be overcome by this deal. Yeah, i think its possible that the deal wont go through. It does seem though that they have kind of, you know, they have barrelled against kind of all opposition so far. So it does seem likely that the deal will go through. What will be the deal is whether this makes sense for tesla as a company. Theres the idea that tesla is better when customers can get solar installation and battery installation in a very seamless way and tied together with their cars. What is unclear is why they cant do that right now and why solarcity cant do that right now and what makes it better is these two companies are together. And hasnt defended this basic premise. We want to bring in the senior writer. Good morning to you. Good morning. Musk, if you believe in hill is thinking, he is playing 3d chess and were playing 2d chess. When he talks about the grid, what are the rest of his critics and skeptics missing . Well, i dont know if musk knows something that we dont know . I agree, i dont see why you cant implemented his master plan currently having them do as two separate companies. Its interesting that musk just came out with his big manefesto for what he sees for the future a couple of weeks ago. The last one was ten years ago so obviously timing was strategic here. But in my opinion, tesla has a lot of other issues and priorities that they should focus on right now. Model 3. I think the auto pilot crash that happened we are just beginning to see what is going to be a much bigger issue and i dont think that they have taken it seriously enough. At least publicly. Tesla is the bigger of the two companies by a pretty wide margin but some people on twitter are saying why not change the ticker to musk. Fold everything into this portfolio. Well, it is really hard not to be sin car length about this deal. Musk owns 22 of solarcity and its run by his cousin and its hard not to be sin car length about this. Your thoughts on that. Not necessarily the enterprise . You are at this point. Theres lots of technical operational questions about tesla. Like can they produce the number of cars that they need to but basically what youre betting on when betting about tesla and now solarcity is youre betting on elon musk. This guy to be fair beat expectations every single time. Its been amazing to see and i think essentially if you believe elon youre in this all the way and hes done crazy things in the past and survived. He is still kicking. Theres no doubt about that. He is a visionary. Ill give him that. And theres really nobody else doing what he is doing. He can make fun of his master plans but it seems like he is actually been able to deliver more or less on a lot of what he says that he was going to do and that was going to happen ten years ago. That said, i just dont know if this is the right move for tesla. I mean, i dont think its going to make or break the company but i also dont think its necessary. Lets move on. Beijing based ride didi will acquire the Business Unit in this teal worth up to 35 billion. It ends the push to dominate the space in Mainland China and shows how hard it is. And people are trying to read into this, that theres some new chapter in uber maturation. Theyre less willing to go toe to toe and go to war in some parts of the country. Do you believe that . No, i think this is just travis sort of looking at the reality here. Like this was a audacious probably Impossible Mission from the start. They did they spent a lot of money there. And the rest of their operations are profitable so they were spending their profits on this market that was always kind of a pie in the sky market and they got they didnt get nothing for it, you know . They still have they will have a stake in this new operation which will be an essential monopoly in china so, you know, they could make a lot here and this is an almost impossible plan. Theres no love lost between the two companies that compete with each other in china. We spoke to code a couple of months ago and heres what she had to say about the competition. Take a listen. Theyre saying were buying market share. We own 87 of private car service and almost 100 market share in taxi. So do you need to buy more market share or not, right . Have you seen other places mark a leader by market share. Its the Smaller Player and need to buy market share. Trying to buy market share, is that what uber was doing . You know, maybe. I mean, i actually im a little disappointed in this case with them pulling out here. Obviously theres a track record in every tech competitor thats gone into china has been completely outdone by the local competitor and you see it time and time again, right . That said if anyone had a fighting chance it was probably uber, whatever way they were going about it. Uber is a very Controversial Company and travis gets a lot of heat but they have super, super aggressive and obviously he had reasons for giving up but it is giving up on the market. Well see how it evolves from here. Kanye west weighing in on reports that apple is in talks to buy tidal. West says the fight between apple and tidal is using some choice language messing up the music game and apple should just give jay his check for tidal now referring to fellow tidal founder jayz. We have seen apple be confronted by large entertainment personalities, will that happen this time . I dont think apple is going to make the deal because kanye tweeted something. This is different from the taylor swift situation but kanye is right actually. Hes always right. Hes right about this. It is bad for consumers and it seems bad for the Music Industry to have so many streaming services with their own exclusives and different deals. It seems like consolidation is maybe good for everyone and tidal is particularly suited to apple because apple prides itself on being the premium exclusive end to the market and thats what tidal has been able to attract. Exclusive acts, early releases. That seems well suited. Steve jobs tackled this differently. What would steve jobs have done . How would apple music have he evolved before steve jobs . I dont know if it would have. If anything he would have had it more closed and more exclusive. We now know what twitters purpose is. Its for kanye west to ask Silicon Valley to do what he wants them to do. So that came out of this. If you remember he asked zuckerberg for a billion dollars not long ago. But he asked on twitter, not on facebook. He made that mistake. He is set up perfectly to run for office in 2020, thats for sure. Oh, yeah. Thank you for joining us today. Thank you. Meanwhile we are watching a slight reversal in the markets on the first trading day of august. The dow is up 23 points. The s p and the nasdaq are positive as well. We did see july Manufacturing Activity up for the 5th month in a row although a touch lighter than wall street was expecting. Construction spending also fell to a one year low in june. Were watching a few stocks this morning. Alphabet and galxosmithkline focussing on bioelectronics. They were moving in opposite directions but both are now higher with the overall market. Shares of etsy moving higher as well. The online crafts marketplace today with a buy rating and that is enough to lift the stock by a cool 17 . When we come back, tech stocks trading at the highest levels in 16 years but our next guest says the best is yet to come. Plus forget ecommerce, amazon soaring on the success of its cloud business. More rivals now want a piece of that action and then tim cook says hes with her. Why the ceo of apple is hosting an event for Hillary Clinton. When squawk alley comes back. The heirloom tomato. Intenselyflavored. Colorfullydiverse. Beautifullymisshapen. Cultivated for generations, its the unexpected hero of any dish. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Still down 2 act awfully close to a 3 handle. Good morning to you carl, thats right. Oil prices are trying to test that 40 level yet again. Now interesting because barclays was out with a note this morning. It said the drain is clogged and thats the problem here when it comes to oil prices you have a glut in crude oil and gasoline and some demand was robust this year but not enough to work through the inventories in a meaningful way. That demand is going to drop off in the next month or so and we head into the winter and Global Demand as well. Europe and china specifically. That creates a picture that could be troublesome. In terms of the macro supply story as well the focus has some off of the saudis but theyll continue to pump to keep that share up against the iranians so were back to a supply demand problem. What ill say is theres one caveat. People care about the fundamentals until they dont and thats the dollar. Fluctuates could cause small blips here and there but the three handle is in focus here and once we hit it thats when the momentum adds on and the crude oil trade. Back to you. People are watching the effect of that on the credit markets as well which well keep an eye on for now. The s p hit a new record high and among one of the best performing sectors is the tech sector seeing a surge in july reaching the highest level in 16 yearsful lets take a look at how last weeks earnings have contributed in the surge for the sector. Channing smith is a managing director for Capital Advisors and channing, what is so interesting about the move in tech is how broad based it is. Every single subgroup has been up for the last five weeks. What exactly are investors chasing and when does that tied come out . Theyre chasing a secular theme. Mobile internet, ecommerce, thats where the Earnings Growth is so you can have a weakening Global Economy but these trends are still in place and are still driving impressive earnings and Revenue Growth throughout the world. Well, the growth that you mentioned we have seen at Companies Like facebook, amazon and google but thats where theyre chasing the Revenue Growth. Theres a front page story today, dividends boost, tech stock allure and it talks about cisco and ibm are back in vogue because theyre almost functions like bonds. How long will that last . Theres reversion partly because they became so inexpensive. Early this year it was trading at 4. 5 times Free Cash Flow. If it starts hitting numbers and the rate of decline gets slightly more positive they can move quickly it would be the one we still prefer and this morning talk about how in a break up scenario it might be worth 40. Do you have to buy the old names or buy the old line dividend payers . No, look at apple. This is a stock that struggled that is off of its high by 20 but this stock is trading 11. 6 times forward earnings. We saw it and we too expect our terms in the stock market are probably 3 to 6 . We think over the next two years thats a total return with dividend and if you want growth its a little more aggressive as you get a downturn the stocks should be punished but they continue to grow and beat expectations. Over the weekend, barons pointed out that if you actually value apple on a Free Cash Flow basis its at the very bottom of the barrel. Its less than 8 times its own Free Cash Flow. Its cheaper than hpq. At a certain point does a stock become so undervalued that gains are inevitable or are you still waiting to see how the iphone 7 plays out and how the eco system fairs in theecond half of the year. Our view on apple has been over longterm at current levels because its highly inexpensive. Specifically the way we would look at it is even if the iphone 7 is a level of innovation we think the business is going to recover anyhow. Their number of users because over the last few years have grown by at least 80 and there is an annuity type characteristic and its undervalued so iphone opportunities occur to 215 over the next few years and the second longterm story as well will drive good Free Cash Flow is that Services Business will double in contribution as well because they do have these highly affluent digitally transacting consumers and taking all of this together the stock has been inexpensive and continues to be. Part of the positive reaction to last weeks results wasnt because of Significant Growth in the business and that can drive it up. Well see what september brings. We appreciate your time this morning. Thank you. Still to come, jeff besos may be the king of the cloud for now but rivals like google are threatening that kingdom. Then were counting down to the european close. Squawk alley will be back in a minute. And chasing it. Thats right, carl, generating a record amount of q2 and also boasting all time at 30 and analysts are now going to produce 12 billion in revenue this year and just to put that in perspective, all the revenue is going to generate but the competition is not there and google reported its other revenue segment that includes its Cloud Services jumps up to 30 and posted real advantages of its own. The structure is already in place running google search. Running youtube. And a way of making it available. And they could catch jeff besos with a couple of years but that would be a very tough challenge. Google does run a network of sophisticated data centers and its 80 billion but the Company Controls 5 of this market according to Synergy Research group. The tech giant that controls the second highest share of this market isnt google. Its microsoft which boasts big sales force and long standing client relationships. Its on track to hit that goal of 20 billion in annual revenue from its Cloud Computing businesses by the end of fiscal 2018 which would include azure as well as office 365. Back to you. Thank you so must have. Lets get one more check on the s p hitting a new intraday record. Up just about 4 points but well keep an eye on that. Were also keeping an eye on the minutes to come before the close in the u. K. And across europe. Stocks beginning the week to the down side but the Banking Sector is in focus. Among todays losers in the t wake of the european banking stress test that hit late friday evening despite giving most of the 51 banks that participated a clean bill of health. Italian banks as has been the banks all year, theyre among the hardest hit today. That bank performed worst on the test but moving higher after a privately funded plan to raise capital. The idea being that now that the bad loans have had a price put on them, other banks will have to share similar values with their investors. A programming note for you, be sure to watch julias exclusive interview with the italian Prime Minister matteo renzi tomorrow. When we come back, Silicon Valley meets capitol hill. Why tim cook is backing Hillary Clinton for president and even hosting a fundraising event for the former secretary of state. Record highs for the s p. Dow is up 34 in a hurry. More in a minute. The family of the Service Member that died fighting for the u. S. Demand apologies from donald trump. They were on the today show this morning. This candidate amazes me. His ignorance. He can get up and the entire nation, the communities, the minorities, the judges. Afghan Authorities Say an overnight attack on a house for foreign contractors killed one and wounded four others. A huge crater as you can see there at the scene of the explosion and a highly damaged compound wall inspected earlier this morning. Syria reporting heavy fighting at a Palestinian Refugee camp on a key road into aleppo. Government forces repelled an attack by opposition fighters and luke akins jumped into the history books yesterdayment i couldnt watch it. He is now the only person to survive a sky dive without a parachute. He bolted from the plane 25,000 feet and flipped on to his back at the last second and landed in a 100 by 100 foot net. I couldnt let my kids watch it. Thats the cnbc news update this hour. Lets get back downtown. Do not try this at home. Why do you even do that. Hes done 18,000 jumps since he was 12. Incredible. Sue, thank you. Despite high profile jutrump supporters, one of the valleys most influential ceos is throwing his weight behind Hillary Clinton. Its Foundation Capital general partner paul holland. Paul, when brian was going to throw a trump event, the shade was enough to cause him to scrap it all together. Is there a different standard being held for clinton and for apple . Or is it now just open season . Well, i think one, it is open season. I mean, were 97 days away from the election or whatever so were going to be into that last sprint but i do think that its notable. I had a conversation with another Senior Executive here in the Silicon Valley over the weekend and we were postulating that donald trump will probably have the lowest fundraising totals of any republican candidate in recent memory. Its difficult to go out to your community here and raise money for trump. Hes a very devicive candidate and someone that doesnt really represen