With all of this Global Selling starting after weaker than expected ism numbers. It was a big drop. It dropped from 56 to just over 51. Massive unexpected decline and that really started things off. At the end of the day, the dow was down sliding 326 points to close below its 200day moving average. Also, the s p 500 losing more than 4 had . And the nasdaq dropped 106 points, to close below the 4,006 level. Where does that leave thus morning . At least at this point, the futures have been bouncing back, but just mildly. Now youre seeing some of the hesitation. At some point, the dow futures up by only 15 points above fair value. S p futures up by just over 2. 25 points and the s p up by 3. 6. Over to scott webb has todays top stories. Many of those stories this morning involve Quarterly Earnings reports. We are watching shares of yum brands, the parent of taco bell, pizza hut and kfc restaurant changes. It reported Fourth Quarter profits 86 above estimates. Sales fell shy, but the company said its making progress in reversing a sales decline in china. Swamping estimates of 1. 37. The video gamemaker was helped by the continued popularity of the latest installment of its grand theft auto title. The chairman and ceo will join us to talk more about that. And britains arm holdings reported profits below the companys forecast. Thank you, scott. Good to have you aboard this morning. Lets get over to japan because thats where the markets are moving right now. Kaori enjoji, good morning. Good morning. The markets dropped more than 4 , which means the market is down 14 . We seem to be swinging from one extreme to the other. Tokyo was the best market globally last year. Now tokyo is the worst performing market globally. I really think you need a bit of perspective here. Im hearing today that it was phrenetic out there. A lot of people are explaining this to me this way. You had 150 million coming into the tokyo Capital Market in 2013. A lot of rate commerce were able to in december. They are getting spooked and that liquidation is continuing. Most people i talk to say that round, we may see more of that. I also think the linchpin is going to be the yen. When you hear a company like toyota, the biggest latcher here in japan say theyre going to post a record profit this year, its not on him only toyota, its hitachi as well. Toyota is expecting 2. 4 trillion yen in profits this year. This is a record. Even better than where they were before the lehman crisis. But that bump up that theyre giving us, 200 billion yen worth, 100 billion of that is coming from the exchange rate. Where we are right now, just around 101, doesnt change that scenario at all. But you have to factor in the part about the u. S. Recovery. And the executive at the press conference, i spoke to him. He says for now theyre expecting a continued mild recovery in u. S. Demand, despite those manufacturing numbers. He sees 16 million cars in the u. S. Also for china, which has been very, very critical, sales figures were just below 1 million last year, but theyre expecting this year the number to top up to 1. 1. So he is concerned about the declines were seeing in the emerging markets. But for now, toyota stays their scenario is unchanged. I think over the medium to longer term, weve talked about this a lot, the structural changes that people have been hoping for. That has been starting to wane over the last couple of weeks in the abenomics agenda. But that doesnt schan texplain extreme movements were seeing in the equity markets. Right now, some of the Institutional Investors i speak to, maybe this is a correction the market needed to go through after 2013. Guys, clearly, some may not be panicking. But the retail audience, when you walk around town, what is the feeling like . The feeling is one of maybe we got in too soon because the local story here is that they want to ship off the shavinavine japanese. Homes are famous for out of the banks and into places like equities, for example. Part of that push is to pure the reflation that the government and the bank of japan has been trying to institute over the last year, year and a half. Part of that process, they have this new tax scheme where you can invest a certain pool of money into the equity market and the tax rate on any kind of Capital Gains you get from that is limited. So they were just rolling out the scheme so you have a lot of mom and pop investors comes into the market. Obviously, this is a New Territory for them. Compared to the United States, the Retail Investor is very, very negligible. So weve had similar false starts in the past. I think thats why japanese retailers in general, relatively speaking, are more loath to the investment markets than they are care horry, just going back to toyota and what happens there, how much were the sales impacted by twaen china and japan, is there a sense that tension will ease this year or is that still a concern . I think theres an undercurrent of concern. But when the company said they sold roughly 900,000 cars in the china market last year and theyre going to expect that to increase to 1. 1 million, this doesnt suggest to me that theyre expecting any longterm backlash for the undercurrents of political tensions between the two nations. So this is a factor, of course. But its a huge market. They have lots of vested interest. They have technological alliances. Its not like toyota goes in there single handedly and sold cars in china. Theyre required by law to have these alliances with the local automakers. So, you know, its a bit of a twoway game going on. Kaori, thank you very much. We appreciate it. Right now, its time for us to check out the Market Action in europe this morning. Ross westgate is standing by in london. Ross, it looked like things looked better about an hour ago. Whats happened since . Yeah. We hit the session high about an hour ago. Weve come back since then, falling back down to about the Halfway Point for the session so far. Decliners currently outpacing advancers by a ratio of around about 7 2 at the moment. The ftse yesterday was off around 0. 7 . Bigger falls for the cac and dax. Right now, were down around 0. 3 for the ftse. The xetra dax down about 1 . The cac is down 0. 2 . We had some good news for the uk economy. Construction pmi is coming in at 64. 6, so expect it at 62. 1 in december, the strongest since august 2007. A bit of construction in the housing boom still in the uk. Just three sectors that are up this morning, insurance, utilities and banks, autos, chemicals. Banks are being driven higher by this stock. Ubs today jumping on the open, up 5. 6 as you can see after a swiss bank posted a bigger than expected Fourth Quarter profit of around 917 million swiss francs. Most analysts pleased by a better performance at the investment bank, as well. And the ceo speaking, as well, this morning saying they are nulling, also using staff allowances to meet eu rules. Remember, eu rules suggest some bankers can only be paid or suggest they say you can only be paid twice your salary in terms of a bonus. A lot of the banks are trying to figure out ways to get around it. Bp today down 1. 5 . They came out with figures, as well. Not great, as expected following the likes of shell and exxon, as well. So a lot of refining pressures for these oil majors. Thats where we stand in europe right now. Back to you. Thanks so much, ross westgate. There is always high interest in what apple is doing. Now the company is tackling internet infrastructure. The wall street journal says apple is putting together a Network Capable of putting together large amounts of data to customers. Al. sonline needs have grown with the expansion of its icloud services, but this could lead to broader ambitions for television, either expanding apple tv or building its own tv set. 502 and change for apple. Do you understand this story . Im a little confused by it, too. Are they talking about back end infrastructure that theyre building out and theyre going to use other peoples i was confused by that, too. Its a little early, but let me get tim cook on the phone. This story is fascinating, but makes no sense at the same time. One of the story i heard reporting about it this morning, they were brick bringing it up saying he was told he cracked the code for television. But i cant put the whole thing in context because i didnt get it, either. Whatever comes on the tv thing, its like a little overdue at this point, right . Last year, everybody was talking about how the next product was something related to tv, whether it was their own Television Set or some sort of refurbished apple tv. If you cant control the pipes like comcast, Time Warner Cable into the home and its nog something you can do overnight. Unless you think youre building fios into everybodys house or if you crack the wireless code, that would be huge. If you could correct the next at at t verizon sprint in the air, its not enough. Lets do more research on it. In washington, the Senate Judiciary committee is taking on the issue of Cyber Security and Data Protection on capitol hill this morning. Targets chief Financial Officer will be testifying before the panel. But ahead of that, he wrote an opinion piece for the hill where he said the retail giant is spending up a 100 Million Program to intermountain the use of chip enabled smart cards. The goal is to have it in place by 2016 been six months ahead of schedule. The cyber attack that hit target affected 40 million credit cal card and debit reports and other records with information and these chip cards are long overdue if you talk to security experts. Its what they have in europe. Its what we dont have here. As a result, i think we are paying the price. Are we paying the price . I think so. The question is whether theres going to be enough losses that will outstrip whatever it would have cost for them to invest in this technology a decade ago. Its not just the losses, whats stolen, its what you lost in consumer trust. If you are not somebody who is behind this at this point, i think you will get pushed back. Permanently as a consumer, i want them to do it. Lets say target xwlemts the Chip Technology and lets say kmart doesnt. Im making this up. Would you say, oh, im not going to kmart because they have a great sale but the question will be with the big banks. Jamie dimon will push for it. If im a consumer and looking around at which bank i want to use. Are the banks responsible . I am going to go if you said a sale or something you want at xyz store this really raised my concerns about the level of protections on everything. I spoke about the irs taking their tax returns on all of these things. I think privacy is going to be one of the huge issues and protecting your privacy. He was saying theyll go ahead and rip off computers from a hospital. Even though you may have protected your information, the hospital, if they dont protect their information, it gets stolen from there. This is a huge issue that every business has to think about, making sure theyve collected their information on you. The banks are going to force the retailer to spend an inordinate amount of money for this technology which they may never get the payback on but the banks will. Youre going to have to do it and the voices at the National Retail federation which meets in january, everyone there who was interviewed said the same thing, yes, they are now on board with this. Thats not to say its going to be an easy transition. There is going to be push back between all these players about who pushes for what. In the end, the consumer will end up paying for it. We are. We always do. Scott, nice to have you aboard. By the way, i see youre wearing an siaa suit. That happen is that how you pronounce that . Im not sure. I like the pin. Thats part of the suit. Can i be honest with you . I think youre supposed to take the pin off. I think the pin just comes with it. Are you throwing me under the i dont know. Im not sure. You did cut the tags off. Well, they stick the pin in its a beautiful suit. Ive seen people wear these before. Have you . Yes. I love it. I like the way i look, i guarantee it. Trust me, thats a nicer suit than the ones they sell over at mens wearhouse. Coming up, well have more of the in the volatility. Were going to have a squawk disrupter. If you wish you could experience a movie anywhere on the go, we have a device for you. Well talk to the ceo right after the break. But before we do that, how much more snow and ice could the country be expected to get this week . Tomorrow is going to be bad and then apparently the weekend gets bad again. Lets get the National Weather forecast from the weather channels julie martin. Guys, more snow on the way. This is just the second of three storms expected this week. So for today, we had those winter alerts all over the map, stretching from the midwest all the way into the east. Weve got winter storm warnings in places like boston and cleveland and kansas city where we could see upwards of a foot of snow from this system. Already starting to see the snow fill in here in the midwest. Heading up towards kansas city. Oklahoma city kind of a mix for you this morning. All of this quickly filling in across the day and spreading into the big cities like chicago and indianapolis will likely see a wintry mix in between. Icy conditions from st. Louis down into Oklahoma City and then this all heads eastward, as well. So were looking at heavy snow once again in places like upstate new york. Boston, new york, going to be a wintry mix for you. A little bit icy, as well. Should stay rain for you in d. C. , nonetheless. Travel the next couple of days, going to be very tough here in the northeast. Looking at upwards of a foot of snow here in kansas city by tomorrow. Also in places like cleveland, we could see 5208 inches coming down. Indianapolis, youll get hit hard. And then in the east, once again, more snow for new york. Central park picking up over 8 inches yesterday. Another 1 to 3 expected for you. And in boston within we could see anywhere from a to 8 inches of snow from this december. Weve got another one behind that one. Its going to be coming across the country. By the weekend, could be sitting offshore creating quite a me mess in the east. We could see a strong noreaster bringing lots of snow to the big cities. Well check that for you. More here, but right now, were going to toss it to break. We miss out on what matters today. At axa, we offer advice and help you break down your retirement goals into small, manageable steps. Because when you plan for tomorrow, it helps you live for today. Can we help you take a small step . For advice, retirement, and life insurance, connect with axa. For advice, retirement, and life insurance, sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box, everyone. Weve been watching the futures very closely because of all the concerns youve had. It looked like we were up above 70 points above fair value. We have come down from those highs after yesterdays loss. Right now, futures are up. Dow futures up by about 15 points above fair value. S p futures up by 2. 25 points. Overnight in japan, the nikkei tumbled. This came the day after japan wound up in correction territory with a decline of more than 10 so far. The nikkei is down by 14 . As for the rest of the asian markets, they all finished lower. You have to remember this is the first time some of those Chinese Markets have had the chance to react to whats been going on for the last several days. In europe, you can see that the green arrows there have turned around, too. The dax is down by 1 . A decline of almost 100 points in germany. Other incidentsies are under pressure. If you check out the dollar this morning, the dollar at this point is stronger against what the euro and the dollar yen up, too. 1011. 30. Euro is trading at 1. 3516. And if you take a look at whats been happening with gold this morning, youll see right now, it is down slightly by just over 5. Im very excited about this next segment because the markets are so lousy this morning, its a feel good story. If you ever wish that you could have a full Movie Theater experience in the comfort of your own home, the waiting room, its gone. In line at the grocery store, its gone. Tech startup, this is a tech startup that is changing avagon is the name of the company. It has a mesmerizing new Company Called the glitch that you will not be able to look away from. Here to show us the next big thing in wearable technology, ed tang. I also want to say this is something you can invest in, effectively, sort of, through kick start. Absolutely. Were in the middle of our kick starter campaign. Things are going wildly successful. So lets explain what this is. Put it on, andrew. I will put this on. I will look like an idiot, but i can watch whats on the iphone or an ipad, whatever, in full retina, everything. Right. Whats really neat about our technology is this visual technology weve created. There is no screen involved. The image you see is directly projected on your retina. Its a much more comfortable and comfortable image that you would see from the screen. You look at these lcd screens and you get tired after a while thats why you get headaches and things . Absolutely. So you get this amazing picture quality. So this is amazing. Im looking right now at a game. Can you see this is what im seeing through here. I can play this game. You can see how awful i am at this ive got to turn the car again. How do i anyway, im not doing very well. But you can back up. Whatever is on here oh, now im looking at the iphone. Lets back you up here. This is amazing. By the way, the speakers on this thing are out of control. Yeah. The way we designed this thing is weve taken this amazing display technology and embedded it into premium headphones that weve designed. So you can wear them like headphones when you want headphones. So now i tilt them up . Yes. It looks like youre wearing beats. And how much is this thing going to start . On kick starter for 499. Is this price going to come down eventua