Banks and commodity stocks weighing. The nikkei dropping more than 2 . The index is down more than 10 since the beginning of january. In the u. S. , stocks coming off a wild session. The dow traveling more than 1,000 points yesterday during a very choppy session. This despite a relative ly leve trading range of 256 points. A big move yesterday. Sharply higher open for the dow jones. The s p opening higher as well as the nasdaq. Mike, Deutsche Bank says theyre going to buy back senior debt, potentially. Why would that move the u. S. Markets . Why would that help Deutsche Bank with its capital . You have a bid in the market, especially in the bank stocks, right in the afternoon when you got that report. Clearly the market likes it. It signals Deutsche Bank can do this, that it has the liquidity to buy back the debt. Its almost a signaling mechanism to say, were not so constrained, we dont have a liquidity trap right now, and we can actually do this if we want. Thats one reason. If the concerns are about if in the future theyre going to have to raise more capital, how does buying back debt that hasnt fallen that much, because its the senior dead, help the Capital Profile . Only marginally does it help because of the weird accounting at banks. If you buy back your own debt thats trading a the a discount, you can book a profit on that. Youve essentially kind of created value somewhere by doing that. That profit runs down to the bottom line. At least in a small measure, it will add to your capital. We dont think thats what set this off. Theres a lot of things to have set it off. Oil is what set it off. Deutsche bank in particular. But in terms of why you think the market moved the way it did. I thought you were referencing Deutsche Bank reports yesterday afternoon, right when with the market picked up. You think that was the whole i think it was a big part of it. People are getting too nervous ahead of janet yellen. The european banking stocks have sent fear into the u. S. Marks. Wait until you see the german stocks. Big spillover. The fed will be in focus today. Janet yellen will head to capitol hill to deliver part one of her semiannual testimony on the economy. Shell testify before the House Financial Services committee at 10 00 a. M. Eastern time. Well have full coverage here on cnbc. Okay. And then the big story of the morning. Its politics again. Decisive wins for donald trump and Bernie Sanders in the New Hampshire primaries. The main theme, voters backing antiestablishment candidates on the gop side, trump getting 35 of the vote, followed by john kasich, ted cruz, and jeb bush, who came in stronger than people expected. And marco rubio. Everyone said, how come they like trump so much . But i have so many friends up here, and theyre special, special people. New hampshire, i want to thank you. We love you. Were going to be back a lot. Were not going to forget you. You started it. Remember, you started it. On the democratic side, sanders taking 60 of the vote to Hillary Clintons 38 . Together, we have sent the message that will echo from wall street to washington, from maine to california. [ cheers and applause ] and that is that the government of our great country belongs to all of the people and not just a handful of wealthy Campaign Contributors and their super pacs. Well have a lot more on decision 16 in just a bit, about whos going to be leaving from the gop race. We have people like Chris Christie and ben carson and possibly carly, who may have to pack it in. Also, hillary didnt win as many female voters as anticipated. Thats been a chronic issue. A big issue in how this plays as it continues on. And that was supposed to be her strength. First woman candidate. Also, trust and honesty. They polled people on trust and honesty on the way out. She did not score well. They say that once you get into some of these other states, they think they can somehow run the tables, that the math does this. The generational divide seems to be playing much more heavily than the gender divide. In corporate news, shares of disney tumbling after the media giant failed to ease cord cutting concerns in its latest Earnings Report last night. Star wars helping the firm post earnings, but investors couldnt overlook the drop in profits. Julia boorstin sat down with ceo bob iger in a first on cnbc interview. Were going to say on our call in a few minutes weve actually seen an uptick recently in espn subs. We did reference in candor in the august call that we had seen some sub erosion, and that, in fact, was the case. But the last few months in particular have been encouraging. So iger walking back a little bit of the alarm from the summer, but despite the optimism, the dow component saw programming costs rise at espn. Thats been a concern as well. Okay. Now getting back to the markets this morning and all the moves, lets take a quick look at the futures, see how things are setting up after what was a wild day yesterday. Dow looks like it would open higher at the moment. About 144 points higher. Nasdaq looking to open 58 points higher. Lets also flip those oil boards around. We are now under 30. We were, by the way, over 30 yesterday morning. You talking about crude . It was crazy yesterday. Now weve officially duck ee under in a big way. Lets also tell you whats going on with the tenyear note. 1. 765. You know, we could talk about gold. Not a bad trade. Bitcoin, not so much. Gold, better. Actually, thats down now marginally as well. For more on the selloff overnight in asia, lets get to sri in singapore. Good morning, andrew. Heightened risk aversion out here. China markets are closed and will remain closed for the duration of the week. So its really concentrated in japanese equities. It was the classic flight into the safe harbors of the japanese yen. We have seen the yen higher. Overnight we saw it at a 15month high against the u. S. Dollar. Therein lies the unintended consequence between the currency markets and japanese equities. Very strong. So a stronger japanese currency means pressure on the exporters, pressure on the broader market. The banks leading the decliners. The adoption of negative rates seems to be compounding the stresses amongst the big japanese mega banks. They were all big, big losers today. So there are issues about their sustainability at their margins and profitability Going Forward. All in all, it was a dash into safety. The trigger this time around wasnt oil, it was the health of the european banking sector. Lets also not forget, we saw money going into the jgb market and the yield on the benchmark tenyear jgb, going negative for the First Time Ever. All eyes now on janet yellen. Its over to the fed chair. What tone is she going to strike at the congressional testimony . What does it mean for the dollar . What does it mean for risk appetite, and what does it mean for the rates outlook . Asian markets watching that one closely. Guys, back to you. Sri, thank you. See you soon. Lets show you whats happening despite that selloff sri was telling you about overnight in asia. Look at the european markets this morning. It w italy rebounding by 4. 5 . The spain index is higher by more than 3 . Lets talk more about the markets. So much concern about the european banks spilling over into the United States. When you see the reaction in the european markets this morning to the simple news from Deutsche Bank, is this because of Deutsche Bank saying theyre going to buy back some debt . I think thats certainly the catalyst for this very shortterm rally of today, but the weakness that weve seen this year is not just about energy or china or financials. If you look at the earnings season, there are negative Earnings Growth across the board. Just consumer discretionary, health care are the only ones with real growth. Its more pervasive. Of all the stuff youre talking about that feeds into the whole profitability for banks. If youre worried about a slowdown in world economies, its going to feed into profitability concerns. In fact, youve seen it in the bond market too. The high yield selloff, which of course was sort of energy driven, as now expanded into the financials, and that has impacted Investment Grade bonds, where the spreads are as wide as theyve been in a long, long time. Joe, what do you think . The weakness that were seei ii in financials, does that portends something much bigger . How concerned should we be . If one believes that were headed to a recession, absolutely you get it. A lot of popular barometers are saying those recessionary risks are rising. The reality is recessions dont start with conditions like this. Recessions dont start with Consumer Confidence being high, with employment looking good. When you dig inside employment, one of the things we saw was the number of people quitting is on the rise. You quit when youre confident. You dont quit when youre uncertain. You dont quit when youre nervous about making car payments or housing payments. Underneath the surface, theres a strong argument to make that were seeing a trough here. These are not recessionary conditions yet. Thats what the financials have been pricing in. Thats what oil and all these other things so would you commit to buying financials here . Would you commit to buying the market at this price . To buying the market, absolutely. I think the number one spot in the market is going to be the consumer. A lot of people have equated falling oil with fear. The reality is according to aaa, theres now eight states in the u. S. Selling gas for 1. 25 or less. Thats a massive stimulus for the consumer. People say, wait, where is this Consumer Spending . Havent seen it. Whats interesting is if you look at the consumption data, for the First Time Ever in the history of consumption data, the real retail sales exceeded that of nominal retail sales, which means consumers bought more units, real retail sales, they bought more units than nominal, which includes prices. So that shows the effect of this walmart world weve been in where all these countries are you can buy more is stuff because everything is cheaper. This gets to a little bit of the question of how much does it matter if technically we get into recession. For the markets purposes, its facing an earnings recession. Its facing the corporate sector not being that healthy. The credit market has peaked. I guess the question, does it really matter if we technically get into a recession or is the market dealing with other things here . I think what weve seen so far this year is a real split in the equity markets. The quality companies, the companies that are generating Earnings Growth, that have generated consistent dividend growth, have dramatically outperformed year to date. Thats the story. Youve really got to look for companies that can weather weaknesses in the broader economy. On the bond side of the equation in high yield and both Investment Grade, one thing to keep in mind, sure, were not worried about rising Interest Rates, but keep in mind that if youre ready to put your toe into the water, that you think these 800 basis point spreads in high yield and 200 in Investment Grade are attractive, remember the same factors that are likely to bring in those spreads will bring those Interest Rates back up. Managing the Interest Rate risk is important if youre seeing that. Janet yellen today, can she move the markets . I mean, she can. What would she have to say . I would say the risk of a policy mistake is clearly high. Theres a huge expectation the fed needs to walk back their plan of four hikes or whatever it is. So i think shes got to come off as sounding very dovish. Otherwise, that risk is high. Theres two big policy mistakes that could happen. One is here, the other is china. If at some point they dont panic. I think china needs to panic, to do qe, to do all these Different Things that the fed did in 2009, that europe did a couple years ago. The two big policy mistakes would be janet yellen today potentially not walking back does she have to say she made a mistake . Walking back the hikes would suggest it. But how does she do it . The fed cant drive everything. I think theres almost too much of a focus on the fed. Its more about the broad economy and the legacy, the continues qe around the world that can almost overpower what janet yellen does. Are we at i feel like central bankers must feel like theyre in crisis, right. Japan goes to negative Interest Rates. They get a surging yen. Thats not how it was supposed to work out, right. The ecb hasnt gotten anywhere near 2 inflation. Now were talking about Financial Stability in the Banking System in europe. What have these guys achieved . When you look at the Banking System in europe today and their fears of whether its exposure to oil or emerging markets or other places, the number one thing and yesterday financials were obviously a big focus. It was a big focus on cnbc all day yesterday. But one of the things people are missing is oil to financials today is not the same as housing to financials in 07. If for no other reason, its that financials simply are not leveraged the way they were in 07. Rules and regulations prevent that. I think people have made too much of this. I think that is one of the main ingredients here for a trough. All right. Thanks, guys. Thanks very much. You see this piece in the New York Times over the weekend . Do the not break up the banks. For this very reason. An interesting thing to see. They havent been permitted to be that profitable. Not a popular thing to say though. Coming up, big wins for donald trump and Bernie Sanders. Now the focus turning to South Carolina and which republican can win enough support to challenge for the nomination. Were going to talk to political strategists from both sides of the aisle when we come back. Equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. Ngo to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Welcome back to squawk box. The theme in New Hampshire yesterday, antiestablishment wins. Donald trump and Bernie Sanders locking up first place in the nations first primary. John harwood joins us now. Hes got a lot more on what happened last night. John . Andrew, what happened was a populist revolt in both parties, on the left and on the right. Lets start first with the democrats. Bernie sanders not only beat Hillary Clinton in New Hampshire, he crushed her 60 to 38 . Thats a wide margin. He said there was real content to the message on economic policy. Tonight we serve notice to the political and Economic Establishment of this country that the American People will not continue to accept a corrupt Campaign Finance system that is undermining american democracy, and we will not accept a rigged economy in which ordinary americans work longer hours for lower wages while almost all new wealth goes to the top 1 . Now, donald trump on the republican side had a similarly convincing victory, scored 35 , did not underperform his poll standing as some had predicted he would. As he did in the state of iowa, john kasich had a surprising second place showing, but hes got a tougher path ahead. After that, you had marco rubio fade into fifth place. Very damaging night for him. Jeb bush got a little bit of life. Donald trump, when he addressed his supporters, talked about some of the same populist energy Bernie Sanders did, but he chose a Different Group of targets. We are going to make America Great again, but were going to do it the oldfashioned way. Were going to beat china, japan. Were going to beat mexico at trade. Were going to beat all of these countries that are taking so much of our money away from us on a daily basis. Its not going to happen anymore. So there you have two sides of the same coin. Working class americans feeling that theyre not getting what they need out of this economy. Theyre not moving ahead. Bernie sanders and donald trump both speaking to that, andrew. Okay, john. Thank you for that report. Were going to try to dig deeper into the conversation right now, try to figure out what comes next. Former u. S. Congressman joins us. Also, steve mcmahon. Lets talk about this for a second. I want to go on the democratic side first. How damaged was hillary last night . As we were discussing before, on issues like trust, in some of the polls doing terribly. Congressman . Well, i think for democrats and republicans both, i think youre going to get a little better barometer of the electorate once you go down to South Carolina. Candidates got up this morning saying, hey, weve got 48 more of these contests to go. Weve just gone through two. Weve seen hillary win one. Weve seen bernie win one. Weve seen donald win one. Weve seen ted win one. So theres 48 more of these to go. I think South Carolina, im not really shaken on either side by what happened last night. But i think youre going to see a little more better stability