Good morning. Welcome to Worldwide Exchange on cnbc. Im sara eisen. Im wilfred frost. We look to be in for another roller coaster ride this morning, so buckle up. While you were sleeping, heres what happened in the markets. Chi chinas stocks got slammed with selling accelerating in the final hour of trade. The shanghai comp dropped to its lowest level in a year. Despite efforts to lift sentiment ahead of the Lunar New Year holiday. A big part of the story again is energy. Oil prices sliding back below 30 a barrel. Lets have a look at price action today. Were down by about 1 . Wti, 29. 95. Brent just above 30 as we look at things this morning. Stocks around the world are following asia lower this morning. Were looking at another Global Market selloff. Lets show you what u. S. Futures are doing. Theyve been hovering around negative 100, at least on the dow, pretty much all morning. Theyre off the worst levels of the session with dow futures now indicated to open down 66, s p down 7, nasdaq down 24. This after a late selloff yesterday brought the dow down to close more than 200 points lower. 1 declines across all three major averages in the u. S. Thats 6. 4 drop in china spooking markets across the globe. Weve seen weakness in europe throughout the session. Its early there, but still 1 declines across some of the european indices. Lets show you where we are now on the dax. Not quite at the lows, but still off about 0. 87. The dax and germany and china have a very close trade relationship. Some of those export names get hit when china is the concern. Weakness from the ftse 100. Goldman sachs estimating about 10. 5 of sales of dax listed companies go to china. We mentioned china, but the rest of asia also getting hit hard overnight. We get the complete roundup. Good to see you. Were back to the heady days of the volatility in the mainland markets. They were relatively well behaved for a week or two. Now this, bang. A flurry of selling towards the close in the afternoon session. Shanghai composite, youre looking at 14month lows for the index. Its really hard to put your finger on a precise cause for the selling that triggered it. What i can say is, yes, it was all related. I think it reflects fears of more capital outflows because, yes, we have seen a stable series of fixings for the yuan, for the currency by the authorities in beijing. But theres clear depreciation pressure on the currency still. So bear that one in mind. I think its all down to the Central Banks now. We got something of a comfort blanket from mario draghi last week. We saw a very shortlived rally. Are we going to get more dovish rhetoric from the fomc and the bank of japan round our way is the big openended question. Markets need a positive catalyst right now. Thats where we stand. Will, sara, back to you. Yeah, and what on earth is going on with oil. Sri, thank you for the update out of singapore. Back here in the u. S. , a packed market agenda today. The data flow, economic, and earnings is heavy. Weve got the Federal Reserve beginning a twoday meeting with a decision due out tomorrow afternoon. No change is expected. There will be a statement, though, along with this decision. Investors are going to parse every single word. The s ps caseshiller home price index out today. The report likely to show a solid gain in home prices. At 10 00 a. M. , january consumer confidence. Expected to remain unchanged, despite the market selloff. Always watching those confidence numbers after Market Action like that. Then earnings central, 3m, dupont, j j, those are the Companies Reporting before the opening bell. The biggie after the bell, apple. Also, at t after the close. More on apple in the next half hour. No question this is going to be the Earnings Report. Apple always gets scrutinized more than anyone else. Were asking you today on twitter, is apple stock cheap . Tweet us your answer. We ask yes or no. Well read the poll results later. The stock is off 25 since its high reached last april. A lot of concern that iphone sales for the first time are going to show slowing growth. 1 growth this quarter. The key question is going to be on the guidance. What does apple ceo tim cook have to say about whats ahead for the first three months of the year . Thats where analysts say you could actually see the first yearonyear decline for iphone sales. Is it baked in the cake or not . Thats going to be a question. So is china. Absolutely right. I think the stock has declined, of course. Its back below 100. And we have seen downgrades in analyst numbers. But were just below 100. The medium stock price estimate is still 140, in and around that level. Still a lot of optimism priced in. If we get an absolute decline in the number of iphone sales, that will come as a big surprise. I think youll see a lot of price targets come down if we see that. Absolutely right. Great question. Get involved. The sell side has maintained. Do your point, the sell side analy Analyst Community is bullish on this stock. So many. Is it still a growth stock . Is it still a stock like a facebook or an amazon or netflix where investors have come to expect doubledigit growth in terms of revenues . Can we still expect that from apple . So do get involved with us on twitter today. Some other stocks to watch. Huntington bank shares is buying a high rival first merit for about 3. 5 billion in cash and stock. Huntington offering about 20 a share, a 31 premium to mondays closing price. The ceo will join squawk box at 6 20 eastern this morning. Lulu lemon gaining in after hours monday after loan pine disclosed a 5 stake. Staples is replacing its longtime head of stores as the Office Supply retailer tries to complete a merger with rival office depot. Samestore sales in north america fell 2 in the third quarter. Staples joins several retailers that have pushed aside executives after disappointing holiday sales. Rambus reporting better than expected Fourth Quarter earnings. That company boosted by higher royalties from ibm and the renewal of a license fee from toshiba. Swift transportations Fourth Quarter results also beating forecasts. The Trucking Company citing higher freight rates and fewer empty shipping loads carried by its drives. Good news in transportation. Sony, this is really interesting, moving its headquarters of its playstation gaming unit from japan to california. The company says the move makes sense as it has several business part eners in the u. S. And need to respond quicker to industry trends. There we go. Sony moving out to the u. S. Well continue to watch Energy Prices closely this morning. Among the reasons most often cited for oils drop over supply. More production is coming online from iraq and iran. Meantime, the global head of Commodities Research cautions crude storage is at capacity. Heres jeff curry on cnbc yesterday. We look at these storage levels in cuoklahoma. Theres about 3 Million Barrels of spare storage capacity, which is nothing in the grand scheme of things. The fact we saw cash prices separate from forward prices tells us we broke the cash and carry. That means you cant store another barrel of oil in the system. We think this is going to be a feature of the market you continue to slam against those capacity constraints, creating a lot of volatility without any real trend. Goldman predicts oil prices will fluctuate between 20 and 40. I want to bring in other factors. Clearly todays declines and yesterdays declines, oil prices are a big influence on that. The tenyear back below 2 . Thats interesting to note. I think the fed meeting is crucial. Central banks also around the world very, very important. Expecting some more qe from the bank of japan this week. We had the ecb dovish tone last week. I want to point this out. Germanys twoyear bond hit a record low this morning. Were also looking at the japanese ten year. If we get more qe in japan and europe, what does it achieve . Its fractional. How much lower can they go . How much more does that feed into the market . I think at the moment, investors are thinking we need t see more dovishness, but does it really achieve anything . I think thats a big factor thats worrying people. The fed meeting over the next few days. Its a focus. What are Central Banks doing, and can they do anything anymore . Thats whats worrying investors. And to your point, how powerful are they . The dax is down more than the s p so far in 2016. Down more than 10 right now. Mario draghi of the ecb, though, is increasing his rhetoric theyre going to continue easing. It just shows you the pull on stocks right now is energy related. Its Global Growth fears. Its china. And theres only so much Central Banks to your point. And mario draghi was talking again yesterday, reiterating the point he will get inflation up. People obviously just questioning a little bit whether they believe him. Are they losing their edge . In addition to the energy names, financials have been slammed in this selloff. The sector was one of the hardest hit yesterday in the u. S. S p financials are down nearly 13 for the year. Joining us on the newsline this morning on this, banking analyst at rbc capital markets. Hes here to make sense of the sectors poor performance. Increasingly, it seems this group is tied to the energy names, to the price of oil, and to whats happening globally with growth. I know you think there are a lot of buys in here. But its hard to see how that can happen right now. Youre right, sara. What were seeing with the slowdown that people are expecting due to the decline in Energy Prices, the probability of the fed raising rates as many times as they forecast is really unlikely. The fed fund futures is suggesting two. Theres a concern we may not get two fed fund rate increases this year, which is affecting the banking industry. So what do you do with the banks . They just come out with earnings. Theyre not all that bad. The fundamentals are getting stronger postcrisis. If theres any sector right now that shows you this market is not paying attention to the fundamentals and instead watching china and oil, its the banks. So do you stick with this trade . Do you buy on the weakness . What are you advising clients . No, i think youre right. This group has certainly been hit very hard year to date. I think this is still a very Good Opportunity to be buying banks for the very reason that you pointed out, which is the fundamentals in the Fourth Quarter for the group were good. We expect loan demand to continue to be strong this year and finish the year in december at about 8 and 9 loan growth year over year. The benefit of the fed funds rate increase that came in december has not really fully come into their numbers. It will in the first quarter. We should get at least one to two fed fund rate increases this year, which will also help earnings and revenues. We think there are still buying opportunities at this time. Thanks for jumping on the line this morning. Coming up, red arrows across europe this morning. A live report from london in just a couple minutes. Plus, well get you ready for todays big fed meeting with hsbcs chief International Economist. Stay tuned. Youre watching cnbc, first in welcome back to Worldwide Exchange. Making headlines this morning, jpmorgan will pay about 1. 4 billion in cash to resolve most of the claims involving lehman brothers. An 8. 6 billion lawsuit. Sara . Show you whats happening with u. S. Futures. After a 6. 4 slide in chinas market overnight, red arrows around the globe could be worse. Dow futures down only 53 points. Half an hour ago, that was 100. Weve seen improvement as futures has marched on. S p futures down about 6, nasdaq down 18. More than 1 declines across the major indices. Energy and financials getting slammed the most. Red arrows in europe. Things are a little better as brent, the International Benchmark for oil, does move above 30 a barrel. Wti still trading below 30 a barrel. Oil is certainly a focal point as well as china. Absolutely right. And also, the fed set to kick off a twoday meeting today. The big question, will the Central Bank Continue to hike rates or has the recent market rout blown the central bank off course . Joining us to discuss the issue is the chief International Economist at hsbc. Great to have you with us this morning. Good morning to you. Will the fed be blown off course . Well, of course the big headache for them is that the market is trying to tell the fed something, but the Economic Data is still relatively good. Its Pretty Amazing you have such a significant selloff in the stock market when payroll has been running at a rate close to 300,000. I think the fed is somewhat puzzled by market developments and is trying to say maybe these problems in energy are going to spill over. Maybe these problems in china could have some implications for the Global Economy later on. Up to this point, the u. S. Economic data, job openings, nonfarm payrolls, all looks strong. I think were all a little puzzled by the Market Reaction and the action weve seen in 2016. Just overnight, its hard to pinpoint the trigger for a 6 move down in chinese stocks. The 1. 5 move yesterday in u. S. Stocks. And the fact that we dont know the why is even more scary. Thats right. Thats why all investors should be asking themselves, whats the story we tell each other at the moment. In 2008 and 09, there was one clear story. It was very clear that story was we were going off a cliff and the economy would not function. You would not have salaries being paid by companies. All these things were much more significant than what were facing today. Its very confusing. One day its china. The next day its oil. Maybe those two things together can make some problems for the economy, but so far, at this point, it looks like its still relatively unlikely well have a recession. Are commodities not used in many sectors . Thats true. In that sense, you could say in 2006 and 07, the problems were quote unquote just in some corners of the Housing Market. In this instance, high yield as a share of old debt outstanding in the economy is less than 5 . That means that the Housing Market debt as a share of the economy in 2006 was closer to 30 . So the magnitudes here are quite different. Lets not forget the lower oil prices. Beyond the question about whether this throws the fed off course, one of the other questions is, did the fed make a mistake, and is it exacerbating this selloff by trying to communicate that its in a tightening cycle and that it actually raised rates and since then the markets and to some extent the Economic Data have been poor. Think about it this way. The fed thinks about the business cycle, which is moving very slowly. They have to think about, is the trend getting better, is it getting worse . It was clear the trend was getting better. The big question for all of us in the market now is, have we seen significant deterioration and fundamentals on the back of this selloff . In other words, will we see a significant deterioration in fundamentals. And you still say no. Up to this point, its pretty peculiar the stock markets sell off so much. We need to see more evidence of the slowdown before the fed will be convinced. Thats not to say they wont be cautious tomorrow. I think theyll be sending a more dovish tone. Its clear there is a huge discrepancy between what the market is thinking and what the Economic Data is showing. Okay. Great stuff. Thank you very much for joining us this morning. Much appreciated. When we come back, democratic president ial hopefuls Hillary Clinton and Bernie Sanders both slamming that Johnson Controls, tcyo inversion tax deal. Their comments straight ahead. Plus, check this out. The scene outside new Yorks Laguardia airport last night. A backlog of flights from the weekend blizzard and a Traffic Accident creating a traffic nightmare. As you can see in these aerial shots, cars are crawling along in bumpertobumper traffic for miles on the long island expressway leading to and from the airport. The traffic even causing some travelers to walk with their luggage into the terminal so they didnt miss their flights. What a nightmare. As we head to break, heres todays Weather Forecast to see what we can expect from here with the weather channels kelly cass. It looks like rain this go around instead of snow. Weve got some warmer air moving into the northeast. You can see the rain snow line around the canadian border. Watch out, there could be some patches of freezing ice out there, turning pretty icy across the adirondacks, Northern New England as well. For places like new york city and boston, its going to be wet. Its going to be windy with those gusts as high as 30 Miles Per Hour in boston today. Were also looking at the showers extending through the Tennessee Valley all the way down toward the gulf coast, eventually working into atlanta probably by the afternoon. High temperatures warming up to 60 , low 50s in dallas. Around new orleans, where mardi gras season is under way, we need the umbrellas with a chance for showers, maybe even a rumble thunder. Were also watching for a system in the pacific northwest, bringing you some rain showers in seattle as well as portland. Those temperatures reaching into the low 50s. Otherwise, a gorgeous day in los angeles. Sunshine and 71, a little wintry mix setting up across portions of new mexico