Good wednesday morning and welcome to squawk alley. Im live in rio. Joining me back home in new york, john fort and kayla. And the cofounder of elevation partners. A lot of headlines but first back to kayla and john. Thank you so much carl. Disney is the biggest stock in the market right now. Its largely what is causing the dow to gain. Of course news the company is investing 1 billion for a 33 stake in Sports Streaming Service created by Major League Baseball and as part of the teal disney plans to embrace core cutters launching new Digital Service separate from the cable bundle. That will stream sports and heres what bob iger had to say about it. Theres no disadvantage. If a customer decides to disconnect or to cancel their car service and migrate over in directvs case to the over the top service which is primarily an internet provided service then theres no disadvantage to us. Meaning its press neutral to us. Thats a very good thing. So first two roger with disney shares up about 2 right now. Do you think all of those concerns about whether disney would move quickly enough to not get disrupted over the top, do you think that all of those concerns are alleviated now . I dont, kayla but i think this was a really smart move for disney. The situation is like the one with the iphone. Its often hard to come up with a second act that makes for a smooth transition and i think that the issue here, kayla, theres two things going on. For disney specifically, they had this amazing guilt on espn where 80 Million People are paying for espn whether they juan it or not and as we go to various cord cutting and unbundling situations theyll have to reset the Business Model and in reality over time there will be just as much money in it as there is now but i think the transition is likely to be murky and its going to scare people but the second issue, this is the real irony. Lets think about this. Theyre spending a billion dollars to buy a third of a piece of a Technology Business started by a professional sports team. For the last 50 years the Television Networks have been the ones they turn to to get them to customers and now the situation is completely reversed . I think that is an astonishing thing. And what they created here really is amazing. Youre right but is it any less amazing than amazon which made its selling books coming up essentially with modern Cloud Computing or apple reinventing the smartphone . But heres my question for you, the difference here between the smartphone situation and the video situation it seems to me is con ten wise were far from fully penetrated. Theres plenty of global audience still to reach. People still have this hunger for content. Even traditional on ten just done better than before. Tnch the exciting thing is the capability to reach everybody in the world is now there. When i talk about moving from adoption which is the purchase of new phones to adaptation which is the whole economy adjusting to the fact that everyone with money has a smartphone, this is exactly what were talking about and to me whats great about it is there will be new Product Offerings and a lot of exciting things to be done but i think for the large scale market leaders like disney its got to be scary because theres a lot of other people doing the same thing with less market share. Lets move on to the markets. U. S. Stocks trading in a tight range and not stopping the nasdaq from hitting fresh all time record closing and intraday highs yesterday. Oracle, citrix, Hp Enterprise and nvidia. Whats so interesting about this years rally compared to last years rally all driven by the high growth momentum internet stocks is whats old is new aga again. The s p 500 margins have basically peaked because you have weakness outside of the u. S. And more than half the earnings of the American Companies come from outside of the u. S. At the same time the market factored some of that in. Particularly for the lower Growth Companies so you see situation where value is in the stocks and they have an upside surprise. We see Central Banks sprinting money everywhere. Theres a lot of cash flowing through the system and theres nowhere to go except Financial Instruments and thats driving the market up. I dont know how long thats going to last but im very happy about it right now. A lot of people have given yelp up for dead. Its up 14 this morning. Is that what youre talking about when you refer to limited down side left . Markets are about buyers and sellers so the battle between fear and grief had this year at least massive oscillations. We have started the year with tremendous fear and at the moment, those fears have not been realized and so youre seeing some stocks and apple was earlier an example and youre seeing it in yelp and many others and at some fundamental level thats a better market than the one where theres six or seven stocks driving everything. Well see how long it lasts but i was a venture investor there so im just really happy for them and i hope they keep going. Very quickly, a lot of people are buying shares of cisco and hp and ibm for the dividend, less for the underlying company. Is that safe now . When youre in an environment where in some countries around the world you have to pay, theres negative interest rates, seeing the yields we see on the established mature Tech Companies really is way above average and, as you know i have been advocating apple on that basis for awhile and theres half a Dozen Companies that fit into the same scenario. I think it wont be enough to protect if the market gets creamed but it will certainly give you relative performance. Lets move on to china because shares of the chinese ecommerce giant popping after the Company Posted a surprise Second Quarter profit despite revenue falling short of estimates. Revenue was up 42 . Its the primary regional competition for alibaba that reports earnings tomorrow shares are down more than 25 this year. Its been a full year since market volatility. The resetting shook global markets. These companies are having a tough time and the Third Quarter could be worse. Well, you know im troubled as an investor that looks at china and tries to understand what is going on. Theres some kind of struggle going on between the Central Government and many of the leading Market Participants and this is more true of alibaba than jd where the conflict versus come into the open and i have no idea what to make of it and as a consequence im placing a greater discount, im less interested in chinese stocks until i see clarification. Theres those that have an edge and to them maybe all of this seems normal. Sitting where i sit whats going on in china feels like were in a reset and its not done and there will be some piece of news, something that bottoms the stocks out. That will give us a better chance to buy them right now. What do you make of this continuing move toward partnerships . U. S. Companies partnering with Chinese Companies as a way to penetrate the market. You saw uber china do that and jd is partnering with walmart in china when it comes to ecommerce. Does that make you feel better about investing and companies partnering on those lines . Better about the u. S. Side or chinese side . This is the 64 question. I look at that deal and it doesnt look like a partnership. It looks like uber throwing in the towel. Walmart is in a much better position so well see what happens there. Clearly theyre having an influence under the terms in which American Companies can come into china and theyre less attractive than the ones two or three years ago when American Companies could behave as they would around the world and im going to be more cautious. Those paying more attention to china may be more confident about it than i am. A lot of players trying to figure out what the rules are. We appreciate you joining us. Stay well. I cant wait to see carl do a samba when he gets back. Well hold him to that. Well hold him too that. Be sure to tune into squawk on the street tomorrow morning at 9 00 a. M. Eastern. Alibaba before the bell and alibaba executive vice chairman. Now lets get back to carl thats still live in rio. A big night for team usa. An wins that goal in the 200 meter butterfly. Just instagramed a couple of moments ago and said thats one, always remember i wanted that one so bad. Last night also anchored the 4 by 200 mens freestyle relay with a two second victory. Womens gymnastics. The final five win gold back to back in Team Competition for the First Time Ever. Why are they called the final five . Because the team size goes from five to four beginning in future olympics. Amazing vault by simne biles and all alley raysman incredible. The Hotel Infrastructure here cannot handle them all so they called in a favorite to help out. On the list of olympic sponsorships airbnb has a new title and a big deal in a city that had not enough hotels and with the recession not much appetite to build new ones. Instead of building a place thats more concrete that you know you have a legacy in the city and sometimes after the games. Instead you mobilize the community and then after the games, things will set up normally. Four years ago rio was just a slither of the global market. Most of it occurred in the past 24 months. The very first was hosting it and i think the community really got engaged early on and to open up also their houses for the work up and they realize that was a very nice experience. I think that was natural for two years later. They continue to go. Thats a lot of fresh spending for the city and the country in the middle of the recession. With consumers still under financial pressure the company added new payment options. For instance, brazilians love to pay for things in installments. We put together local Payment Methods to really have the flow of brazil that were having as a place to stay. 66,000 guests during the olympics. Thats 25 million in income for airbnb hosts in this city and a lot more in residual spending. You dont have to build a lot of hotels anymore. You have platforms like this. Bet you wish you may have had that in sochi. More from you in a bit. Apple is gearing up for the next Product Launch but not just iphones taking the spotlight. Book is defending its move to block the ad blockers but the debate does not end there and one of the biggest advertisers announcing a major change in strategy on that platform. Plus one year of alphabet released since we heard it was going to happen. Is it better off today . Well dig in more when squawk alley comes back. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Its been one year since google announced the creation of its Parent Company alphabet on a plan to separate its highly profitable search and its like cars and virtual reality. And shares of alphabet coming off fresh 52 week highs. So lets take a look at how they have done. From a core google perspective, absolutely they have done fantastically well. Investors have gotten a clearer look into the profitability of that business. But beyond that, what do you think . Well, the conversation we were having a year ago was this sets them up perfectly to split out youtube and spin it off eventually. Everyone was focused on what happens way down the road for alphabet. None of those things have come to roost but the one thing that has is the discipline that they have continued to talk about. It was never mentioned. It was never a buzz word on googles earnings call. And 4th quarter three times. Recently only a couple of times but she announced a buy back and just did a bond deal last week to help the company mature its capital structure and unless you think expenses have gone down dramatically they havent. Theyre spending it differently. And it hasnt really slowed down that much either. If you take a look at the deals they have done in the last 12 months as alphabet they spent about 1. 8 billion between the two entities in about 20 deals. Their m a deal making is pretty choppy but you would think if they were going to be tightening the Purse Strings they would pretty much put a hold on that and management style is out there. The cloud direction is unclear. And talk about amazon as the leader. Google hinted at the fact that theyre making progress but you have diane Green Running that. Still a bit of an odd structure. On the alphabet board but also reporting an operational role there through the cloud. Its interesting these giants who are trying to get bigger taking various different roles. Facebook, the semiautonomous acquisitions like whats app. Apple, trying to build out eco systems. Amazon just growing into risky markets. Microsoft, vertical integration and google you have this Holding Company structure. A lot of those Companies Held by insiders google despite the founders still having a massive, massive say in the company. 73 of the shares are held by institutions. This has been a winner for a lot of investors. Phones, laptops and keyboards. Apple gearing up for the next Product Launch event. Which despite is coming up next. Probably less than a month away expected to feature the new iphone 7 but you cant buy excitement so walt has something you can buy today he is excited about a new keyboard for the ipad pro. The executive editor of the verge joins us now. Good to see you, john. About this keyboard, they make keyboards for awhile. You really like this one but for me the question is if you had to pick a single device to just get along with forever, pretty much, just exclusively. Would it be the ipad pro with this keyboard or the laptop . A lot of people cant afford to have just a utility belt full of devices and they can pull out which ever one they want at the moment. Well i think its a tough call and it comes down to the software. There is as you know, there are are about a million apps in the Apple App Store that are tailored for the ipad. And a lot of them more and more and more of them actually are productivity apps and you can get along just fine. If youre doing serious Video Editing you can do it on ipad but its easier on a laptop. Theres more storage and more opportunity to attach external storage so you probably are going to go with a laptop. But i think theres its an 8020 rule. I think for 80 of the people, even if you count what they do for work, it can be done pleasantly and without hassle on the software and with the hardware and now with this keyboard on an ipad. I tell you what got me, it was the educations. Like trying to move audio files around and maybe every two weeks and to be stuck with technology it didnt work and made me put the ipad away and rely on them more often. Tow think apple is going to address that stuff or are they satisfied with the state of ios as it is . Not entirely competing with the mac . You know, there are rumors they may even move ios to the mac and i stress those are rumors. I have no confirmation on th thatful its a good example as they existed for years putting up a simple system in icloud. Theres no reason why they couldnt be doing more of that in ios. Its not that there isnt a file system. Its that in is encapsulated in that domain. Pages and microsoft word has its own file system but its not and if i want to put it into a photo or ipad and the file in any app i want thats still not easy on ios. No, its not. So you should stick with a laptop or at least use your laptop part of the time. I mean, i have been using i said in the column, i am using my laptop less and less and less. I have been doing work things that were talking about. And thanks for joining us as always. Still to come, bob igers billion dollar bet on sports streaming and what it means for disney investors. Squawk alley will be right back. This is my new alert system for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. Years about a cat allergic in to other cats. Ow openingslashclosing night it hit me hats for cats. Everyone said i was crazy. When i went online. I got my domain, catswithhats. Com from godaddy. Now these things are feelyin outta here. Got a crazy idea you think you can turn into a success . We know you can and weve got a domain for you. Go you. Godaddy. Good morning. Im sue herrera. Heres your cnbc news update at this hour the battle against zika continues in south florida. The Mosquito Control director says the population is dropping in the winwood district thats linked to 21 zika infections. His department is finding just one mosquito a day down from about two dozen mosquitos and traps sets two weeks ago. The Defense Department releasing video of u. S. Air strikes on isis positions in syria last month. The u. S. Is flying air missions in support of u. S. Backed Ground Forces trying to push isis militants out of the city. And German Police carrying out raids against suspected islamic extremists in several towns in western germany. They targeted preacher who is are suspected of trying to recruit young men to fight in syria and iraq. The mine