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 and western texas. Thats a look at your weather nationwide. Im meteorologist kelly cass for the weather channel. Or across te in under an hour. Whole communities are living on mars and solar satellites provide earth with unlimited clean power. In less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond. And if you thought that was amazing, you just wait. If youre just waking up, lets get you up to speed on the overnight markets action. Chinas stocks getting slammed once again, down 6 for shanghai. Shenzhen down a bit more than that. Hong kong down 2. 5 . Not really clear what the reason for the selling was. It accelerated in the final hour of trade. Was it Oil Prices Falling . Was it anticipation of what when the fed is going to do . Not everyone is bearish on china right now. Heres siemens ceo this morning. There was a lot of doom day in davos about china, but i have to say that the real economy in china is much better. So some optimism. What will apple say . Thats the key question. China has become the second biggest market for apple outside the u. S. Some of the growth fears there have been weighing on the stock. Meantime, oil is also a big part of the story. Check out oil prices this morning. Theyre recovering off the lows of the session. Wti just going back above 30. 30. 13. Were only down less than a full percent right now. Brent also has improved, 30. 37. And guess what, that is helping lift stock futures from the worst levels of the session. Perhaps a signal that u. S. Futures are remaining resilient despite a 6 plunge in chinese stocks overnight with dow futures now down less than 50 points. It mirrors the oil chart. Thats what weve been used to. We saw it in yesterdays session pretty much throughout the day. Were seeing it in the early action as well. We have some political news to tell you about. President ial hopefuls Hillary Clinton and Bernie Sanders both slammed that Johnson Controls and tyco multibillion dollar merger. Clinton calls the deal, quote, outrageous, and said as president she would block such moves. Sanders also took to twitter to make his opinion known saying, quote, the potential johnsontyco merger would be a disaster for american taxpayers. He also wrote, quote, companies that receive corporate welfare shouldnt be able to renounce their citizenship. Its actually a popular opinion on both sides of the aisle. Republicans suggest lowering taxing so companies dont feel like they have to redomicile to ireland. I think you can expect quite a few more of these deals to happen quickly. Its going to become such a big issue during this election campaign, that at some point within a year or so, surely these loopholes are going to get closed. Although, the treasury tried to close them. So f president obama called it unpatriotic. Companies are still doing it. Theyre being honest to their shareholders, doing a deal thats going to save a lot of money. Well have to wait and see. Thats true. Sports news. It was a battle on the court in both the college and professional ranks on monday night. Iowa state taking on number four kansas. Students were camping out in the cold for good seats. The cyclones would capitalize on sloppy play by kansas in the second half, capped off by this drive to the hop from half court from the layup and the foul. Iowa state upsets its rival 8572 for their fourth straight win. We head to oakland. The two best teams in the nba, the Golden State Warriors and san antonio spurs, square off. It was all the defending champs, led by, of course, their mvp steph curry, who are hihits shom all over the court. The warriors blowing out the spurs. Curry himself had 37 points. The ballerina of basketball they call him. And you certainly call him that too. We finish off down under with Serena Williams taking on Maria Sharapova in the Australian Open quarterfinals. Serena has dominated this matchup, winning 17 straight games versus sharapova. This time will be no different. She dispatched sharapova easily in straight sets for a place in the semis on wednesday. Great matchup. And in media news today, video streamers are shelling out cash at the sun dance film festival. A film called manchester by the sea starring Kyle Chandler sold to amazon for 10 million. That beat o the big studios. Midway throu the festival, amazon had snatched up four films, and netflix purchased three with several more prospects. Most traditional distributors havent purchased anything yet. Keeping tabs on how the streaming players continue to move into the space, dominated by big studios and big cable companies. Absolutely right. Particularly in movies its bigger news. We always see it in the oscars and golden globes. Coming up, this mornings top stories, including another big drop in oil prices and a major selloff in china overnight. Stay tuned. Youre watching Worldwide Exchange on cnbc. Breaking overnight, a massive selloff in china. U. S. Futures pointinto a rough start here at home. An apple a day keeps the bears away. The tech giant set to post Quarterly Results after the bell today. And how fast they fall. The Global Market selloff turning some wellknown names into former billionaires, at least on paper. Its tuesday, january 26th, 2016. Youre watching Worldwide Exchange on cnbc. A very good morning to you and a warm welcome to Worldwide Exchange on cnbc. Im wilfred frost. And im sara eisen. Our top story this morning, a Global Market selloff. It started in china, and boy, was it brutal. Chinese stocks ending the day down more than 6 . Finishing lower by 6. 5 . The impact on u. S. Futures has been remarkably resilient. It could be the fact that oil prices have managed to climb their way back above 30 a barrel. Both wti in the u. S. And brent internationally and futures have recovered a lot from earlier lows. Dow futures earlier were down 100, now down 36. Were seeing the same effect in europe. Better on oil, better in european markets. Wti, as i mentioned, still down about half a percent. Off the worst levels of the session. Europe was down over a percent about 1. 3 , 1. 4 . The ftse 100 only down 0. 8. Germany down 0. 6 . A quick look at asian trade as well. Thats been key for the story today. We saw shanghai sell off to the tune of 6 . Australia closed today for australia day. A very good day to anyone watching in australia. Japan off 2. 35. The major story, shanghai down 6 , accelerating losses in the final hour of trade. A packed market agenda today. The fed begins a twoday meeting with the decision due tomorrow afternoon. The s p caseshiller home price index is out at 9 00 a. M. Eastern. At 10 00 a. M. , we get january consumer confidence, expected to remain unchanged despite the market selloff this month. And in earnings, 3m, dumont, j j, and Proctor Gamble among the Companies Reporting before the bell. Apple and at t are out after the close. Lots of earnings today and for the rest of this week. I would say, wilfred, its a real Cross Section of industries and businesses across our economy were going to get from earnings. If theres ever a day when earnings are going to change the story in this market, its today. Were also going to get one of the hardest hit poster children here of the commodity collapse. Are earnings going to tell us a different story . Apple is going to be the biggie after the bell. Shares of apple have taken a beating since its last report in october on concerns of slowing iphone sales. That could take a bite out of the worlds most valuable company. Is it priced in . Landon dowdy joins us with a preview. Morning. Good morning to you. Investors will be watching apples fiscal first Quarter Results closely to see whether the iphone is still the apple of consumers eye or if sales are slowing. Wall street looking for revenue of 76. 6 billion and earnings of 3. 23 a share. But the big concern is china. Analysts worry apple may have trouble reaching its sales target of 75. 8 million iphones, largely due to the companys second largest market. Iphone sales account for the majority of apples revenue. That concern may be justified. Shares have fallen 25 from their alltime high of 134 last april and are down 12 in the past month, dipping below 100. But many analysts are still bullish on the stock, noting it has slightly outperformed the s p 500 year to date, saying that does hold value, and in a note to clients last week, gene money ster saying he sees it at a great buying opportunity. Any other parts of the pie getting big enough to offset that . Its an extremely saturated market. If sales slow, then the next generation iphone or some other project has to be a complete game changer, something we cant live without. On the flip side, i was speaking with guy this morning. If apple beats, then the negative noise from those supply changes can no longer be a prom barometer for the stock. We also have to watch the other section where they have the watch. It was an important holiday i mean, this was the Holiday Quarter for apple. I wonder how many apple watches were given. We asked you in our twitter question today, is apple stock cheap given the selloff weve seen . Keep the responses coming in. We polled yes or no. It is almost a 50 50 tie. 52 of you say apple stock, yes, is cheap. 48 of you say no. Weve had a few hundred voters. Were going to keep tallying the results. This is going to be one of the key questions of the day. Too close to call. The twitter poll absolutely tied. I suppose that down to a beautifully worded twitter question. Thank you, wilfred. Thank you for the compliment. Other stocks to watch today, Phillips Electronics swings to a loss. The company says its Operational Performance is improving despite a challenging economy. Multiple parties have expressed interest in its lumileds units. Twitter has stopped showing ads to a small group of its most active users. Its an attempt to get some of its vip users to stay engaged. Sources say twitter chooses the noad group by a range of criteria, including volume and reach of their tweets. Some of sprints prepaid wireless customers will be able to get 5 off their monthly bill, but theres a catch. E wall street journal says boost mobile users who opt in will have to put up with more ads that cover their entire screen when they unlock their smartphones. Users can ditch the ads by pressing a button to say whether they like or dislike them. I would definitely, definitely not take 5 extra to get loads of ads. I wish i was part of that Twitter Group that doesnt get ads as well. Next time. We have some trending stories for you this morning. Starting with this. The stock market slump so far this year has knocked 20 u. S. Executives from the billionaires club. Names like nick woodman, ceo of go pro. Personal wealth is tied up in company shares. If their shareholders are taking the hit, so are they. No longer billionaires. Im not surprised to see the Bank Executives in there. Some of these banks are down 20 . Big faller yesterday as well. Jpmorgan is rolling out a new atm machine system that doesnt require a debit card. Customers will log in to an app instead. Chase also tripling the withdrawal limit to 3,000. This is actually quite slow to come that you cant take money out without the card. People are using all sorts of these payment exchanges. It would be handy. Bring it on. A snapchat code league revealing some potential upgrades for audio and video calling and an updated messenger. Key question, can snapchat still find a way to make money off of this . Of course, it is legal. See if they actually do this. Do you use snap i dont get snapchat. I was obsessed for about three months. Then i deleted it. Short Attention Span . Right. I love this trending story. A brooklyn man certainly made the most of the blizzard this weekend. Patrick horton built an igloo and put it up for rent on air b b, pitching the backyard snow dome as a boutique winter igloo for two. Air b b shut down the ad six hours after it went live because it wasnt up to code. They gave him 50 off his next stay. Good for creativity, bonus points. I hope someone made use of it. A good little idea. I think the funnier part is theres actually demand. People wanted to sign up and stay for two in a romantic getaway in someones backyard. Anyway, when we come back, todays mustreads. Rey dalia out with some controversial advice following his interview in davos. Youve got to hear this one when we come right back on Worldwide Exchange. K it landed last tuesday. One second its there. Then, woosh, its gone. I swear i saw it swallow seven people. Seven. I just wish one of those people could have been mrs. Johnson. [dog bark] trust me, were dealing with a higher intelligence here. The allnew audi q7 is here. Welcome back to Worldwide Exchange. Futures right now pointing to a lower open, but smaller declines than about an hour or so ago. The dow called to open low by 41 points. Oil has rallied a little bit in the last couple hours. That has lifted european trade and u. S. Futures. Sitting above 30 a barrel for now. Now to todays must reads. We got some good ones today, stories that caught our attention. I had to go to ray dalia, writing for the financial times. Its rare to get a piece from ray in a major newspaper on day one of a twoday fed meeting. His title, Pay Attention to the longterm debt cycle. Writing, it is because of the longterm debt cycle dynamics that were seeing global weakness and deflationary pressures that warn global easing rather than tightening. This is a plea for the Federal Reserve to ease. He talked with our squawk box team in davos. He goes on to sort of elaborate on his position. Its some heavyduty economics, complicated stuff on the longterm debt cycle. But the bottom line is because of the fragility in the Global Economy right now and the sort of maxed out positions, we need to see easy policy from the fed because the dollar is the main currency of the world and its going to affect everybody else. I guess his hope would be not only that investors read it but the Federal Reserve pays attention. He says our whole allocation system is driven by spreads so when theyre large, qe works better than when they are small. Youre getting into the complicated stuff. This is such an important point because qe, whether its worked or not, was way more effective six years ago. It was way more effective for the u. S. , who had first mover advantage, than it was for europe or japan. Look at where spreads are in japanese bonds, yields on those bonds, on german bonds. Theyre so low. If we get more action from those Central Banks, it as much less effect. In that essence, maybe the fed is right to continue to tighten. It has little room to ease. Hes suggesting that itll be more effective for the others if the central bank if the u. S. Central bank, which is the center of the world, eases. The next mustread. Andrew ross sorkin writing a tidal we have a of corporate migrants seeking tax shelter. It comes off this deal yesterday between johnson and tyco. Andrew joins us live from new york now. Good morning to you. Hey, guys. A cameo and a must read. We timed this all together. Exactly right. I have to have say, my question off the back of your article, weve seen lots of criticism from clinton and sanders about another inversion deal. Surely companies have a duty to their shareholders. If this opportunity to cut their bills is available to them, they should take it until the loopholes are closed. You said it, i didnt. Thats exactly right. Ultimately, theyre going to do whats in the best interest of their shareholders. Thats what capitalism in large part is about, though i know some people will debate that point. And the question, of course, is when is washington going to wake up and not just have politicians spewing rhetoric but actually decide to do something. When i say do something, i dont mean bar the gates. The question is, when do we actually get tax reform policy that makes it attractive to be an American Company in america. Thats the longterm issue. The question is, when do we get there and how many more of these type of transactions do we have to see before this thing gets fixed . I will say, what i spent my time yesterday looking at was all of the benefits that Johnson Controls has gotten over the past two decades, including the bailout of the Auto Industry before 2008. The point there wasnt specifically to shame Johnson Controls and say, you know, youre not being patriotic, which they arent being, but the larger point was to shame washington into saying, you know, were just giving away money eveleft and right. Thats what this column is supposed to be about. Its a good one, andrew. Timely and showing up on the campaign trail. We have a big show coming up later, including some good folks from wisconsin. Ill give you a little tease there. We have an auto panel too. Were going to be talking about all these issues. All right. Some good friends from hopefully milwaukee. Thats where Johnson Controls is based. Andrew ross sorkin, well see him at the top of the hour on squawk box. When we come back, the stock prices sinking. Did the fed make the right choice by raising in december . What should it signal in its statement tomorrow . Well talk to the dallas Federal Reserve, who says the fed may have made a big mistake. Back. Backdrop for a fed meeting. The federal open Market Committee meeting today with a decision on Interest Rates due out tomorrow. No change in policy is expected. Though we will get a statement accompanying that decision. Joining us now, president of money strong and former dallas Federal Reserve research adviser. Thank you for coming in early. Thanks for having me this morning. Your former boss told us a few weeks ago that part of the market turmoil can be blamed on the Federal Reserve and the fact that were unwinding so many years of easy policy. Is that your position as you look at these crazy market moves . You know, i think the word he used was front loading. I think being overly easy with monetary policy, quantitative easing, the third iteration, if you will, was probably a bridge too far. That pushed Financial Markets to such extreme valuations that it put them in such a fragile state that any little thing, as we saw last august with chinas small devaluation, any little thing was capable of setting the markets off and igniting what we call systemic risk. We had deutsch banks chief economist on earlier. He was highlighting the point that the domestic data is actually pretty good, particularly the labor market. All weve had so far is a quarterpoint move. Maybe they now delay the full four hikes we were expecting this year. So far, have they done too much already . You know, there was an interesting piece by greg ipping yesterday in the wall street journal. He said its not so much the quarter point, its what emanates from it that reveals the fragility in the markets and in the economy. With all due deference, art cashen pointed out the day of the latest labor market release, only 3 of the jobs in the Household Survey went to people of prime working age between 25 and 55 years of age, which spoke to me that most of the jobs created in december were of a parttime nature. Thats really indicative of the type of recovery that weve seen these last few years. In other words, youre not buying this whole argument that the labor market is okay, the u. S. Isnt in recession, and the Federal Reserve should wait. Labor is the most lagging of indicators. I think the Federal Reserve knew that, especially coming from texas, where we saw the Manufacturing Sector weakening more as a factor of time. We saw a terrible number out of the dallas fed yesterday. It wasnt just indications that there might have been a onemonth aberration in terms of a contracting Manufacturing Sector, but there were indication it was going to continue to worsen and it has. I think the fed has put themselves in a very tight spot because they have to find a bay to communicate, i think, beginning today that they made a huge policy error. And of course other data points, what are you mainly focusing on . Its not just the fed meeting over the next few days. Some pmis coming as well. We absolutely do. I just brought up dallas. The philly fed, the empire state, theyve also been weak. If i was sitting around that table today, id be watching the flash pmi services to see if were going to start to see bleeding out of the Manufacturing Sector into the broader economy, which of course representing the bulk of the u. S. Economy. So youve been in these rooms where they talk about sort of how theyre going to message and communicate and instill confidence to the market. Surely they cannoted ed admit t made a policy error. That would be scary. But they also have to acknowledge the recent turmoil. How do you do that . I think we saw an example at the September Fomc meeting when the market going into prior to what china did had been fully anticipating theyd do the first rate hike in september. That didnt happen. In the same way they came out with the September Fomc statement and followed it up with the press conference, they can do that again today. They can nod in a nuanced way to turmoil in the Financial Markets that will put a little bit of uncertainty as to whether or not theyll pull the trigger again come march, which as things stand, as of last nights close, was still under 25 probability that they would hike again on march 16th. Thats a huge gap between their past rhetoric and what the markets expecting. Will the statement clarify what the r correct belief is . I dont think theyll be too harsh in their communication. I think that if theyre going to give a hint of any kind, that well see chair yellen follow up with that when she testifies in front of congress on february 10th. So some people are of the view that this fear that has paralyzed the equity market so far this year is going to yield a tremendous opportunity. If you believe were not going into a recession and earnings are going to come back, this could be a great buying opportunity. I think there are going to be a lot of technicals moving the markets in the weeks to come. Companies will be able to come back in and start buying back their shares. Being a former central banker, im going to have to wait and see whether or not december was an aberration with the employment report. And we start to get a little payback in the next two employment reports. So youre not there yet. Absolutely not. Not with oil prices where they are. Again, not from where i sit in texas. When you hear the word deflation deflation is very real in a lot of places. Look at real estate. Its a scary thought. But we see it with the commodities prices. Absolutely. Danielle, thank you for coming in. Former researcher at the dallas fed. So what were watching today before we leave you, what im watching, what everyone should be watching, sharing of apple continuing to sink. Theyre down 25 from the recent high back in april as investors await the companys Earnings Report after the bell. The Biggest Company in the world expected, according to analysts, to show the first yearonyear decline in iphone sales growth for this quarter. Thats why the guidance for january through march is goingn going n to be so important. We asked you on twitter, is apple stock cheap given the selloff . 50 50 split. A little majority say, yes, apple stock is cheap. Thats a big change in sentiment. Apple is one of the most beloved stock. Not so much anymore. 48 of you say no. Absolutely torn on that one. Also what to watch today, oil prices. Theyve had a big swing on futures today. Wti was below 30. Its now up slightly. Thats boosted futures. Lets have a quick look at those as we go. Slightly red but not too much. Thats it from exchange today. Good morning to you. Ears ago into a new american century. Born with a hunger to fly and a passion to build something better. And what an amazing time its been, decade after decade of innovation, inspiration and wonder. So, we say thank you america for a century of trust, for the privilege of flying higher and higher, together. Good morning. Chinese markets getting slammed again, 6 . Figure out what that would mean in, like, our market. And crude was back below 30 before recovering. Its now higher. While the u. S. Futures again are pointing to a lower open and europe is weak, but earnings central, maybe thatll save us. Coming up, johnson johnson, Proctor Gamble, 3m, and apple reporting after the bell. And just desserts for Bernie Sanders. The president ial candidate getting the highest ice cream honor. It is tuesday, january 26th, 2016. Squawk box begins right now. Live from new york, where business never sleeps, this is squawk box. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with bill kerr anyone and andrew ross sorkin. Another selloff in china overnight. The shanghai composite dropping over 6 , hitting its lowest level in over a year. The Chinese Central Bank conducting its biggest daily open markets operation in three years, injecting 360 billion yuan into money markets. Well have a live report from asia in a moment. As for the u. S. And how thats playing out here, take a look at the futures. Theyre off their lows of the morning. We were down by over 90 points earlier today. Youre now looking at the dow futures down by just about 16 points. S p fure