good morning, it is noon in rio de janeiro, and "squawk alley" is live. ♪ ♪

welcome to "squawk alley" for our tuesday morning. i'm in rio, joining me fromport 9 is jon fortt and kayla tausche, but first, this is a good day for the u.s. team. the u.s. won six swimming medals yesterday, five of them from rookies. here are something beginning can katie meili. i i'm so happy and thrilled. there's so many people that that medal goes to, not just me. so many people that helped me get here. they really deserved it. >> i would have loved to have been faster, but i've got 9 experience under me now. i think i can do better. >> i laid it out all there. i'm so happy for kathleen.

i came up short, but i left everything in the pool. >> such a great night. they're all just incredible people appeared athletes the it's really cool. >> the other big craze, guys, as you well know is fell manies' face as he as his rival chad le clos shared that television screen. they're going to face each other tonight, phelps of course looking for redemption after losing to le clos in london. gymnastic, swim, judo, you'll see some beach volley ball and some rugby, but my favorite, i think phelps face was when your wife eats the last piece of pie. i know you've had good ones, too. >> mine this morning was when you don't have time for

chick-fil-a in between the two shows you're doing. meantime in the northern hem fer doug mcmillan joins "squawk box" this morning to talk about the deal they meat for jet.com. does the deal mean that walmart is gunning for amazon? here is mcmillan on that strategy. >> knowing where we're trying to get to is really important. in our case we've got the we have a grewing business in china, mexico, canada. and what we hope is those markets and our leaders will continue making progress, but mark will focus on the united states, help us innovate in some ways we wouldn't have alone and faster. and that's kind of the opportunity that i look at.

>> is it fair to say you're gunning for amazon? >> we're gunning for the customer. s dan, walmart has ahead a few swings. is this one a hit or miss? >> this is not baffling. first of all, mark is amazing, but this will be an interesting situation where it's more of a technology company than a consumer brand. whatever sales they have made it's not because somebody wakes up and says i want to go to jet. so it will be interesting, but the technology of being able to identify the closest location for shipping and the closest available could be an advantage for walmart, because they have all the stores. they can turn the stores into

distribution centers to compete more effective. if they do that -- they said containinging of the guard we're going a different dprex, so that was sort of buried in the league. >> this reminds me of apple buying beats similarly for ar $3 billion, but they wanted the tale talent they wanted him to bring the streaming culture to apple. i wasn't very much a believer in that acquisition. i think the record is mixed as far as how it's gone. maybe it's also similar to microsoft buying linked in. what is happening in terms of the big giants who want to sec celebrate faster in some technology area, trying to buy the smarts to do it. how is the track record and do you think it can work? >> the track record hasn't been great, but you're seeing a big move by the five which uss

internally their growth plans aren't what they were expecting. the track record of bringing in external people who will be in new jersey to manage people in california for a company that's in bentonville, arkansas, that's not one we have seen yet. i don't know how it's going to work, but left to their own devices, they have said that business cannot major money unless it's at huge scale. so they were going to spend half a billion on marketing to get jet to scale. >> walmart has decline to provide any details on laurie's employment agreement. a $3 billion man? how high are the stakes? >> i understand week apple paid for jimmy ivy, because he

produced the biggest record ever made. the relyships are important, but we're not going to know for three to five year whether or not it was a -- beats we don't even hear much. beats sales are growing, but we don't hear about it, because inside of apple, it's just not that important compared to what else they do. students thought it was cool that apple bought beats, because it was going to make apple cool again. >> maybe we'll hear more about it when we get an iphone with no headphone jack. meanwhile, donald trump pulling in less than 6% of what mitt romney had raised from tech donors by this point in the 2012 cycle. while hillary clinton is doing better, she still rates less

than half of what president obama did four years ago and still less than bernie sanders has in this cycle. dan, is silicon valley just sitting this one out? >> yes. they are bored and they don't think there's anything here that's new or different. almost all of the money is for the negative reasons, not for the positive reasons, to prevent one from getting it versus actively endorsing the other. so this is just a -- there's no enthusiasm in silicon valley that i have heard. there are a lot of the main names you know, and they've gone towards hillary. those that typically go republican, trump is not their cup of tae. meg went aggressive towards -- that was a big step, but there's no enthusiasm. >> you think silicon valley republicans are up for grabs in your view? >> i don't know anybody will

step up for grabs. i think -- there was more for obama. that felt more important than younger, more tech savvy obvious loy breaking a lot of barriers that silicon valley believes in. this one it's just that there's not enthusiasm. >> let's talk about the survey you did with college students. >> talk about no enthusiasm. it seems that the sanders supporters are not going towards donald trump, at all. but then when you look at overall support, hillary clinton pulling quite a bit, 69%, i believe of -- that's -- i think it was around 50%. >> just under. >> 59% -- >> are they all college students? or voting age.

>> college students, just the once who are ellie jib to vote effectively the message is trump will get 6% of the vote at most, zero percent of bernie sanders supporters will go to trump. about half of them will go for hillary unenthusiastically. a huge percentage are still undecided the not who they're going to vote, but if they're likely to vote. >> of those who say they're going to vote for at party or another, and the green party and libertarians peck up some votes as well, have they indicated how excited they are this. >> they are clear how unexcited they are. the strange one to me is many of

bernie sanders supporters were women. they're the least enthusiastic switching over to had ilry. so there's cleanly no sense of gender in this issue, and the primary issue they care about, no surprise, is education. guns, immigration, they moved down to the middle. they are really fox convulsed on this income disparity, about jobs, and, you know, the cost of education, because they're living it every day. i have never seen a less enthusiastic set of college students. >> we've got about 90 days to see how this shakes out in november. dan, we appreciate you interrupting your interest break. >> you've got to do what you've got to do. >> the ceo of jet, thank you. steve liesman has a look at the household dead report, which

shows a somewhat more optimistic look? >> this is interesting stuff, kayla. what we have is new foreclosures dropping to an 18-year low. you remember last month there was some data that suggested the consumer indebtedness and delinquencies were right, excess this shows the percent of all current loans is highest since 2006. the delinquency rate must be going down, and it did. now bankruptcies did spike up 8.5%, except for some reason that always seems to happen in the second quarter, so not expire slid clear that's an issue to be worried right now of the mortgage debt falling $7 billion to $8 trillion. household dead increased very slight 0.3% student load debt, which has been rising sharply, was roughly flat. kayla, i think the issue is if

these delinquency rates and foreclosure rates are so far down, how good is the banking system doing? are there issues of reg lease? on. >> yeah, more questions being asked about credit quality. our thanks to you. coming up, the future of netflix from the man who was there at the beginning. mitch lowe jones us. plus an influx of visitors to rio. uber's head in brazil joins us. and we'll look at five dame according to angle investor, all major indices are higher right now. s&p and nasdaq touching intraday highs "squawk alley" will be right back. ppens in the market. but thinkorswim already lets you create custom alerts for all the things that are important to you. i guess we don't need the kid anymore. custom alerts on thinkorswim.

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welcome back. the russell 2000 on pace for another closing high. best day in over a year, that company will get bought by randstad holdings. small caps certainly a big focus for investors. >> go the to keep watching. thanks, dom. it's getting tough tore

compete in streaming, this contrasts sharply with the stock of the 141%, when reed hastings outlined plans for mon of expansion. we're joined exclusively by mitch lowe, ceo of movie pass and cofounder and early executive at netflix. thank you for joining us. >> yeah, thank you. >> whap happening with content? it seems the value of content itself is pretty clear. we see hulu ditching it's free added support service it's not clear how many can make money clearly through advertising. is it the scale game? >> you know, it's completely confusing right now. there are so many options, so many ways to get content, so

many people trying to chase what's really valuable to consumers. i don't think anybody has really figured it out. they're looking for the absolute must-see content, the things that netflix and amazon are creating, they're really seeking that thing you absolutely have to see, and therefore either pay for our subscribe to or watch the ads for. it's really confusing right now. >> if you're thinking about parting it, call it ten bucks a month, you want to know you're getting the absolute best, getting something that you want live without. who has that right now? >> there's also bit of it everywhere. net flex has it with some of the their series "orange is the new black." amazon it has it with "transparent ". everything haus a bit, but not

enough to keep you coming back on a regular basis. plus there's so much free content that people just keep looking and are completely unloyal to anybody who isn't continuing to give them more good content. >> if its understand correctly moviepass is 30 to 40 dollars a month for any movies you want to be. you're just not streaming in the say way that people are at home and internet delivery. how does your model play your broadband connection as home, do you independence up getting folded into something else? >> the way i look at it is movie makers never made their content to be seen on a small screen. they made it for the big screen, for the great sound, and the great picture.

that's where all these downstream deals derive from. how well a movie does in the box office dictates the terms for streaming, for international rights. it's incredibly important for both the creative community as well as the business community that it succeeds in the theater. over the last ten years, while ticket prices have doubled and the theaters over the last few years have started to create a great experience, reclining seats, serving food, i think a lot of people have forgotten what a great kind of social interaction it is. there's no longer do you find the sticky floors and people talking loud. i'm hoping we can reinvigorate this. our subscribers go to the movies twice as obvious when they become a subscriber. >> interestingly the bright sales spot for all the theaters with are was food and beverage.

how do you convince someone to subscribe to a product that requires them to leave the house. >> i think people are realizing there's been enough cocooning. more than half of the time you go to a movie, you go with frien friends. when you laugh or see a comedy or scary movie, it's not that fun watching it by yourself. we have to remind people how great the experience is. >> sbzing to how all these business subscriptions grow. thanks to coming and joining us here. meanwhile, we have some breaking news on valiaue valian. meg, what did the ceo have to say. >> joe papa delivering a second quarter, clearly making investors hasn't.

valeant shares are rising today. he said they're delivering on what they said they were going to do in the first quarter, stabilizing the company. he did say that in every single meeting he's ever taken with investors, the question that comes up is about the company's able to meet the debt obligations. they did say today they're going to seek amendments on those agreements. he hopes that will make investors more comfortable investing in the stock so they can start talking about the pipeline and product and other things more key to the business. asset sales are a big issue for valent right now. valeant right now. he said no, this is not going to be a fire sale. back to you. >> all right. all important points. thank you, meg tirrell. up next uber's big plans for latin america. uber's head of brazil joins us from rio.

wayfair tumbling after it missed estimates. the kreismt will join us live. don't go away.

welcome back to "squawk alley," live from rio. getting around the olympic games has been a major focus. congestion and traffic are obviously a big issue. we have the gm of uweb brazil, and he joins us in olympic park. it's great to have you here. >> great to be here. >> somebody made the point this is the first olympics of the sharing age, right? is it a bit of a test case? >> for sure. this is a very special moment. we've been working really hard to make sure that tourists, locals, athletes, everyone has a safe, reliable and cheap way to move around the street. >> tens of thousands coming to the city, some might think it's all about surge pricing.

>> when you have the right technology, you can actually to the the drivers where the users are going to request it. >> so surge has been -- >> relatively low levels, what we expect from every other day. >> rio is a challenging market for. for a time uber was banned by the city. where does it assistant now? >> i think the point for us is mobile. in brazil there's a demand. there's a ranking of the cities with the highest traffic jams in the world. brazil has 30 cities on the list. so you do have demand. and when you have demand and supply, you have a perfect market fit that's what we're seeing in brazil, double-digit growth every week. >> smartphone penetration in the country. is it high relative to other

latin-american countries? >> it's growing at a very high pace. when you look at brazil, you still have a high -- of android, but more and more you're seeing ios, which is more expansive. we're trying to make the service as simple as possible, so anything with an android, ios, windows phone, they can use it. >> their argument is uber is global, they have fires to put on the in china, u.s. and europe, there's no way they can understand local customs the way we do. what's the response? >> we are a global city, but we try to be as local as possible. in brazil we have more than 100 people working from every single city they operate trying to understand the speaks fillsities of each market. that's what uber is all about to

the greatist cities. >> you've launched a couple different products, uber english allows a person to ensure that basically the driver speaking english and safety net lets them tell contacts where they are at any point in the right. >> exactly. we made sure we got the best of the best. from the moment you arrive there's an uber lounge where you have people helping you, and then maybe you don't speak portuguese, and you can order english, and maybe you want to communicate to five people where you are, and at the touch of a butt evan, you can share your location with five different contacts. so what we want is to sell uber in rio, and it's been great so far. >> will we expect to see those in the u.s.? where you have uber portuguese? >> for sure. this is just the beginning. when you have the right resources, people and motivation, you get big

challenges, such as mobility. think uber -- like in congestion in rio is a huge issue. we're saying why don't you take uber pool. it's a safe, and only adds five more minute toss your trip. so you can guess have ipanema to the olympic pool in like 25 minutes. >> hopefully. >> yeah. >> guy, thank you so much for joining us. he's the gm of uber brazil. kayla, over to you. >> thank you so much. meanwhile, stocks closing in the uk and across europe, rising for a fifth consecutive session, driving by games -- along with some upbeat earnings news, the german dax rallies into bull market territory, up officially more than 20% from its february lows.

tice surging, and still down about 76% in the last year. and the british pound spending most of the day below 130 for the first time in a month, and in a times london op-ed ian miscalfty said easing would likely be required if the uk economy worsens. see the pound at 129 earlier this morning maid jim cramer say maybe now is finally the time to make that trip to london. >> yeah, wouldn't mind it. up next, tech m & a is on fire. what could be the next deal? jason brings us five names. "squawk alley" will be right back.

good morning once again form texas health officials say the recent death of an infant in the houston area has been livened to the zika virus. the mother had been recently traveled to latin america when she was pregnant and the baby acquired the infection in the womb. at least one civilian was killed in a suicide attack. the attacker had explosives strapped to his body. no group has claimed responsibility yet. maine senator susan collins says she will not vote for donald trump. the four-term republican senator

announcing her decision in a opinion column in "the washington post," saying his insulting behavior to others has made it impossible for her to support him. burger king will roll out the whopper-rito august 15th. it's a burrito made with whopper ingredients with queso sauce taking the place of mayo and ketchup. $2.99. i'm not sure about that one the back downtown to -- >> the meal you never knew you wanted. >> i'm not sure about that, but that's okay. that's a perfect jane wells story. >> yell, yes. the interrupt jane wells. >> burritos are not actually a mexican foot. >> cheeseburger pizza, now cheeseburger burrito.

we've seen some high-profile deals. jason cal cap canis is an investor in uber, and he has idea about who could get snapped up next, but first what's so interesting about this deal is jet was in the and walmart was offering both? why not take the deal? >> sure. great companies -- or good companies are frequently sold and great companies are bought. that's what we see in the valley. so jet is a good company. i'm not sure if they're trying to sell or not. founders don't want to -- and that's a front they put up. in jet's case, it's a very nascent business. torts off $3 3wi8 onand really

doesn't have a ton of traction, that's one of the reasons founders will sell. it takes out all the risk, and that's probably what we saw in this case. something like dollar shave club, a billion from unilever, that seems like, you know that was bot unilever -- good a great companies. >> jason, you list a few companies that you think could be on the block before long, jawbone, inns that cart, twitter -- quite a few of those companies have had a bit of trouble lately. what about their situation makes you think they're more likely to get bought? does somebody want them? do you think they're more likely to take less than they might have in the past? >> those are all good companies, perhaps not great right now. timing is a key part of this,

dropbox, a fantastic company, a lot of people invested at high valuations, but apple then figured out the cloud and going the and microsoft figured out the cloud even before apple, so who is left? who needs to buy them? jawbone has been out shopping. that was another high flyer, amazingly innovative products, but you're only as good as your last version, like hardware companies, and that's a good warning sign for companies who make -- if you have a dud, and the apple watch seems like a dud to me, and the wristbad that jawbone made was just not as good as their speaker company, so a lot cook acwe-hired, and i think you'll see a lot of those companies get bought. but a lot of those companies get sold. the companies getting bought is the most interesting list inch

what is the sweet spot for a deal size. we've seen a spate of deals in the few billion ranges, where conglomerates say these a snack size for us, and if it doesn't go well, they have a little cover, but you say if there were a big pack man or a snapchat, they would be up for the taking. what tells you there might be willingness to sell by those companies if. >> yeah, the reason i think we're entering a new era of m & a is you have big chip stacks by groups of companies. they companies have large group of cash. so this dfu strategy that a lot of -- which is the don't frack

it up strategy is actually working. m & a used to be founder, and you probably mess it up. now you look at companies like zap pose, youtube, what's appear, these grew faster after they were purchased. so people are getting more aggressive. now i bring to the poker table a bunch of the traditional companies and now i think you'd have massive activity. >> you have -- we'll see if anyone takes the bait. we'll see you soon. coming up on "squawk alley," wayfair shares down 18%, continuing to tumble. we'll trach to the ceo about the company's earnings, but first back to carl in rio.

olympians dream not just about medals, but endorsement deals. we'll ask them what they would do with a big chunk of cash, when we come back from the oil games.

on "halftime report", the mystery man behind the documentary betting on zero. will join us live and exclusively why he made the film and what they thinks about the company. plus we're trading dis any ahead of tonight's results.

can the company regain its magic? and why someone says the financials are on the verge of a breakouts. you'll see the charts that he thinks make a compelling case. >> olympics can mean serious money, endorsements and sponsorships. we asked some olympians what they would do in today's edition of "ask the athletes." >> travel. i love to travel, and so when i stop this part, i was like, my god, i will not travel any more, so $1 million, i would travel the world. >> definitely invest it, definitely some stable companies. >> probably put it in a bank. >> caller: ini find something to

do. >> if i have enough time, it will all be gone, so i would definitely save some of it, and invest so the money keeps coming in. >> spend it no, i'm going to invest it. oh, like one of the biggest shares in nigeria. >> well, at least some of them are honest about it. kayla, guys, back to you. >> thanks so much, carl. this is a highlight of "ask the athletes" segment. to rick santelli. >> maybe some of those athletes may be invests in corporate securities, because corporate securities are on fire year to date, closing in on $900 billion. let's walk back through time. ben bernanke has hinted when it

comes to any more tools you're relegated to negative rates, as of late negative rates are getting a bad reputation, so that basically leaves qe, but qe doesn't have to be limited as we have learned, to government securities. if you talk to japan, they can purchase a lot of things, if you talk to mr. carney, he's not performing corporates. draghi is currently looking to renovate so the point of this is tell me only at help employment, looking to help growth, looking to raise prices, is going to do so by jumping into the fray and maybe a fray created by speculators and investors alike, shadow boxing the direction of central bankers, so buying corporate securities, i just --

i'm remiss to think that, first of all these entities like mario draghi, like mr. carney, they have to choose which corporate securities to buy. in their choice is already a conflict of interest. just think about brussels. if brussels wanted to make the arrangements that they are supposed to be working on shortly, when brexit triggered with respect with regard to the uk, maybe the corporate securities they buy are the competitors of businesses and multinationals in the uk. maybe if they get a different change of heart, maybe they'll actually look to buy some corporate securities out of the uk, but that's an awful lot of power. the other issue to consider is where does all this extra cash go as these rates go down in most of it goes into buybacks if there was proof there was a transmission in the cappi ex, i would be a different story.

this is just pile-on. listen, just because you don't know exactly what to do doesn't mean anything should be your first choice. j jon fortt, back to you. up next it's a tough day to wayfair. shares down more than 17%. wayfair's ceo will joins in a cnbc exclusive, next. indistinc] announcer: are your children in the right car seat for their age and size? is the seat supposed to be forward-facing or rear-facing? did they move to a booster seat too soon? it may be too late to check when you're on the road. [blaring car horn and skidding] fortunately, you're on the couch.

wayfare shares falling on a wider than expected quarterly loss. joining us on a cnbc exclusive interview, co-founder, ceo niraj shah. thanks for being with us. >> thanks for having me. >> so some investors seem to have been taken by surprise by the cost, particularly the long-term costs. it seems what you're spending on setting up logistics to fuel growth in the future, some might say it's similar to what we saw from amazon several years ago, but i guess the question is how confident can you be that this is actually going to pay off? in the sense that, when you buy furniture, and it's a good experience, does that mean you're going to buy more furniture or is it just more of a, a once in a while-type experience? how confident are you people will buy more from you because it's convenient? >> yeah, thanks, jon. a great question, and thanks for having me. you know, an important thing to

point out, our average customer coming twice a year. we don't just sell furniture. we sell homes. furniture, decor, finished parts of home improvement and kitchen as well. home is a category the customer wants access to selection, they want perfect, unique things. value proposition resonated significantly. the beauty of the logistics and delivery network is the type of items we sell in general are bigger, bulkier, less dollar per cube. not using airplanes to deliver these thing. this is not that type of item. so what happens is that there's a huge opportunity to, by being a home specialist, to provide that whole experience all the way through the logistics. we have the scale to do that now and have seen great results. >> niraj, one of the reasons jet.com's ceo gave for selling out to walmart was it costs a lot of money to build the momentum it takes to become a

really huge business. what's the timetable for you getting to the kind of scale that's going to allow you room for profitability and would you consider a tie-up with a larger company to help you get there? >> well, so, look. scale matters. so the beautiful thing is we've been at this 14 years. so our systems, the technology we have, the 5,000 people we have, we've gotten past those initial growing pains where, you know, the question is, do you keep going, build the hardened systems? scale them up? and we continue to do that and we see more and more opportunity as the years go by. in terms of tying up with another company, you know, there's opportunities, we don't comment on any rumors or answer specific questions on those lines. you can see there obviously, walmart valued what jet had done, in its short time, and was very excited by that. any commerce, you don't find companies at scale doing these types of innovative creative

things requires merchandizing, marketing backed by technology. we're unique when you think of a scale play here stands out. >> you've been able to convince and less interest in your stock than there had been earlier in the year. half of shares are outstanding. i wonder when you look at the short interest in your company, what goes through your head why so many people are betting against you? >> you know, it's not surprising, because, again, if you think about the internet. the internet's a brutally competitive environment. whoever wins in a given segment tends to win very big and third, fourth or fifth there's not a lot of room. the fact that physical goods ecommerce is dominated by amazon, the question, what segments of available for other winners? i don't think very money. i think home is one. for certain folks who look at pattern, a physical goods category and am zone will own

it. sure, they can come to that conclusion. wee believe there's a huge opportunity. i think the customer whose continue to come to us and buy from us, that's fueling our growth. repeat customers are growing faster than new customers. at over $3 billion run rate in sales. you're seeing customers care. the short interest it will be what it is. my view is that you're always going to have folks who don't want to spend the time to really understand the business, and so the pattern recognition will be what it is. >> all right. well, thank you, narij shah for joining us. rough day for stock but still up about 10% over the past 12 months. thanks for joining us. >> thanks for having me, jon. when we come back, more live coverage from the ground in rio. carl quintanilla rejoins us with what's on deck.

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olympic games. jon and kayla, the u.s. especially dominant, a lot happening today. women's teams gymnastics and men's and women's swimming, we are looking for a very good chance for gold. a look at some medal events this afternoon and into tonight. on cnbc, some beach volleyball

and rugby. speaking of rugby, later this afternoon on "power lunch" another chance to get acquainted with team usa men's rugby, captain madison hughes, and that sport make as return to the olympics, first time in 92 years. whether that, whether it's katie ledecky back in the water tonight, guys, or michael phelps and the showdown with his arch nemesis chad le clos, coming up. >> hard to imagine, the butterfly, most decorated olympian of all-time still has a stone left unturned. that's one to take very seriously. you can see he is. >> phelps face is trending for a reason. you're right. their first head to head since london in 2012 and by the way, le clos is the only athlete to beat phelps in that event since 2003. so this has really been sort of

that pin that needle, under the haystack, sort of the mattress for michael phelps. one of the few areas he has not been absolutely dominant. so, guys, a lot to get to over the next few hours. meantime, back to headquarters and check in with wapner for the "half." carl, thanks. welcome into the "halftime report." i'm scott wapner. betting on zero. it's the title of a new film documenting bill ackman's fight against herbalife. since the movie's release, a key question remained a mystery. who finance md the film jp a mystery no more. scoop overed weekend short seller john ficktorn and not ackman was the money behind the movie. he's with us today in a cnbc exclusive interview. also with us on the desk, joe terranova, stephanie link, jim lebenthal and josh brown. welcome. good to see you. >> g