Do get your suggestions in to us. Now fed chair janet yellen was a professor at uc barkley during that time. And she testified yesterday about the state of the economy. The topic is Global Markets in turmoil. Lets have a look at what futures are doing. The dow expected to open nearly 300 points down. Yellins comments yesterday were market moving, especially for bonds. Check out the spread between the tenyear and twoyear. Its what everybodys talking about. Yellin telling the Financial Services committee that its unlikely that the fed would have to cut rates soon having just raised them. While there is always some risk of a recession, and i recognize and have just stated that Global Financial developments could produce a slowing in the economy, i think we want to be careful not to judgment jump to a premature conclusion about what is in store for the u. S. Economy. So i dont think its going to be necessary to cut rates. With that said, monday tarry policy, as i said, is not on a preset course. Markets may be indicating otherwise. That spread move suggestive of a weaker economy further down the road. She will have testimony before the Banking Committee at 10 00 eastern. She will take questions. And the economy, we did get a lot of headlines out of yellin yesterday. And she seemed a little surprised by the moves. China was what she focussed on rather than say oil or European Banks or whatever. It was more china, which is the first few weeks of the year. Confusion about the currency. What a difference 24 hours or 18 hours makes. There was a selloff, not too pro nu nounsed. The hang seng is playing catch up. 3. 8 decline. The nikkei is open again tomorrow. It could be a painful open on friday for the japanese stock market. Also focussed on china when it opens back up on monday. Theres been a lot of red since its been closed. It could be a painful open. Lets have a look at europe, in the red, meaningfully so. It was really when the riksbank cut rates at the Swedish Central Bank more than expected. That was at 3 30 eastern time that accelerated. Theres some serious questions right now about central bankers ability to control the Global Economy, to fight inflation and to fight whatever may be brewing in European Banking sector, in the credit markets. We are seeing some widespread fear right now. You see it in the dollar versus the japanese yen. The yen is going back to the highest level since 2014, before the bank of japan surprised in 2014 with easier policies. 111. Extraordinary move. Almost 2 . You see on the flip side in the rush into gold. Rejection of Mario Draghis policy, which hes been hinting at easing to try to weaken the euro. Check out whats happening in gold. 1219. Were seeing a strong gold price, well above that 1200 level, going back to may 2015, suggestive of the fact that there is a blatant questioning in rejection of central bank moves. Interesting the previous chart in terms of the currencies. 113 on the euro, so far from that oftenvetted parity. It shows how much overplay there was in terms of the strong dollar argument last year in traders minds. Lets move on. The European Banks are getting slammed. Steve sedgwick joins us from london. We got a rebound yesterday. What happened to take the confidence out of markets once again today . Very good to see you. Good to see you as well, sarah. A lot of what you guys have been discussing is absolutely spot on. But let me just say, i think its a bit of everything. There is no one single factor leading to the declines. You mentioned the riksbank. Theyve gone from negative. 35. They have to take it on the chin, which means a net interest margin. The nims are getting tighter and tighter. It wasnt supposed to be that way in 2016. As we get more liquid itd, ity credit and demand. The other thing is the oil price also falling very aggressively. That is raising concerns as we all know in the credit markets. Its not just the energy side of things but the higher high yields. What is the exposure to these guys. You mentioned quantitative easing as well. Quantitative easing was supposed to get the euro down and give us a little bit of leeway, give us better turn to trade. But now the euro and the yen and other currencies are moving in the opposite direction and the dollar is falling. What is that doing to the Competitive Edge of a small but growing european economy . Its hurting them across the board. Going forward, theyve got a turn on equity target which is moderately challenging, it was around 10 , and now theyre saying theyre not sure whether they can deliver that in 2016 as well. So questions about the future. And then youve got worries about southern europe, about npls in italy and greek banks. One more point for you. A lot of bad news has already been baked in. So i just want to counter some of that negativity. This one trades at. 3. This one trades at. 55 priced to book. You dont believe twothirds of the assets. Something like welsh bank. Anything under one, and people are questioning the value of the book. Sarah. Willford, back to you. I just got take a breather, steve. I got a the email from dennis garthman, which you will appreciate. And he says panic, pure, unadulterated panic is in the air. Hes watching the euro and the swiss franc. And it is showing signs of a fever, a very elevated fever. Im curious, steve, as what you are hearing as the big problem in the european sector sparking this. Is it the oil and the fears about the Global Economy . I think the Global Economy fears is everything. We have strange reaction when we get a really good payroll. Were worried about high Interest Rate. Thats good news for the compliment but the problem in europe, some of the pmi data which weve been cling onto, some of the trade data, its not been very good in the last couple of days. The other point, sarah is liquidity. This is a really liquid sector. Thats a good thing, yeah . And the problem is, whether youre an swf or someone whos got all kinds of margin calls, what do you sell . Do you sell what you have to . Or do you sell what you can . And in many cases you do the latter. You sell what you can. Some of these valuations are very, very low. For a sector which is very, very different from the last time we had this crisis ecrisis. Weve had stress tests. Weve had over 300 billion of extra capital put into this sector between 2007 and 2014 when the ecb took over the supervisory regulation. Ie, yes, there are huge problems, i mentioned those, but they have a lot more capital than they did previously. Steve, great stuff. Thanks for joining us. Beyond the janet yellen testimony, look for jobless claims, it is thursday, 8 30 00 eastern time. And well get results from pe i pepsico and kellogg and manchester united. Yellin testimony is going to be key especially as she comes in with another backdrop of global turmoil. Will she change her tune . She didnt explicitly take march off the table in terms of raising Interest Rates. Wonder if shell sound a little more dovish. Lets bring in dennis gaurtman. We got at that bit of a reprieve yesterday. The main selling has been the European Banks. Theyre selling off sharply again today. What does that tell you, and is there too much selling at the moment . I dont think theres too much selling at all. I think theres going to be even eveven more selling. And i think the manner in which the yen has risen, the dollar has fallen relative to the yen, in a manner we havent seen since the days of the tsunami. This is very serious, and im afraid its going to get even worse. It doesnt have a, theres not a good ten neor to be found. Often in this bull market, weve looked to Central Banks. Is this team differeime differe . The Central Banks at this point i think are as confused as anybody else. I dont think they will be of great help right now. How will this end . It will end in whwhethe when it. Suddenly theres an end to the selling, it has reached a tsunamilike ending. And it turns around. It happens when it happens. I wish i could be more succincs. The margin clerkinsclerks, when take control, they really dont care what the bids are, what the offers are, all they care about is gaining liquidity. Thank you very much for joining us many the stocks are down. September 2013, thats the low where were at. 17 for the year almost in bear market territory. Ftse hitting a low. This is the generic drugmakers third attempt to buy the condition. You can see share prices down about 10 . A programming note. Dont miss the ceo on squawk box. Cisco reporting a better than expected Second Quarter helped by demand for its Security Products and routers, adding 15 billion to its Share Buyback program and expecting stronger revenue. Cisco Ceo Chuck Robbins will be on squawk on the street at 9 40 eastern time. Amazon says the board has signed off on a new stock buyback plan. This replaces a plan they announced back in 2010. Originally shares popped on the news. And setesla recording loss, but the stock did rise nearly 10 . Elon musk is promising the company will become profitable this year and start Generating Positive cash flow. In march, its model three sedan. Whole foods beat forecast and sales fell for the second straight quarter. They are increasing promotions and discounts as it tries to shed its high price image. Expedia swings to a Fourth Quarter loss. The company says growing demand for travel and cost savings from its recent purchases of orbitz, travelocity. Currently at 9 gains. Zinn ga projects First Quarter bookings that are below estimates. Shares dropping 10 in afterhours trade. Shares of twitter under pressure this. Mo. Earnings beat the streak. But the company said it saw no growth in the key metric average monthly active users. And the currency revenue forecast is light. As you can see, afterhours falling to the tune of 9 , adding to the woes of those last years fall of 70 . James, good morning to you. We thought with management changes, we thought they might start to be getting things in line a little bit but no confidence being taken by the market after yesterday. Well, okay. Lets step back and see whats actually happening here we cant be blind to the fact that user groups stalled. We cant be blind to the fact that the guidance was we low the streak. The first one on the financial side. Were seeing ariireas of confidence. It was up 16 sequentially. Measurement pools are helping advertisers get more comfortable with keeping ad budgets there. At the same time, you have opening up monetization. The financial aspect, we see potential for estimates begin to trough rather than the lower bars weve seen the past couple quarters. The other side, if you can get to the point where the confidence in the estimate returns, i think youve bought some time in order to, you know, start to get new product iterations, to get user growth going again. Were hearing clarity on what twitter is, and jack dorsey talked about it live. You might be getting confidence, but investors are not. Were looking at potentially another 10 lower in this stock. Dont they have to turn around the user growth to get investors on board . Absolutely. The take away is now is not the time to bail on it. For the first time we believe that you are not going to see the more step function estimate cuts. What we needed to see was estimates recalibrate to an int point where we could see positive surprises. If thats the case and were not going to be cutting estimating then weve bought time on the user front. Are you confident in the team. Weve heard about board members. So is someone really, a team really in control of where theyre going, do you feel . Its not the ideal situation to have a ceo split between that and square, the management exodus. So clearly theres an issue at the top. But the fact of the matter is dorsey does plan to expand and make hiring a focus this year. When you look at the user growth, yes, it did come down. But when you look at the daily active users, thats stable. It was flat, quarter of a quarter. To be clear, youre bullish, at least youre hanging on. Im continuing to give it the benefit of the doubt. I want it to be clear that this is not the time to bail on it. You see the numbers. I get it. Im not blind to it. Of the internet names you cover, whats your top pick . Facebook. Which added 40 million users as we just showed during the same that twitter lost 2 million. Facebook, you cant combat against them. Theyre doing absolutely everything right. When you think about the opportunity you have on mobile and the new products like instagram arent even in the numbers yet. So price targets, facebook is. Facebook is 120. Twitter was 35. Great stuff, james, thanks very much for joining us. On a programming note, dont miss twitter coo adam bain live at 10 15 eastern. Have to hope good questions will be asked. Oh, yes, they l the team on squawk on the street asks good questions. European banks are getting clobbered. Check out stock socgen. Well hear from the ceo on the market turmoil. And our twitter question of the day, what are you most concerned about . Right now. Yellin . European banks . A recession . Or oil. Those are your options to pick from this morning. Get in touch with us. Well be back in a couple of minutes. [ male announcer ] fedex® has solutions to enable Global Commerce that can help your company grow steadily and quickly. Great job. mandarin cut it out. See you tomorrow. Good morning to you. Im afraid i dont have good news to accompany the good morning. Sweden, down 2. 8 after the riksbank cut into negative territory. That was at 3 30 eastern time. That is when the selling accelerated. We were already down after socgen results reignited European Banks into the red, and that move got to compounded when we got that negative Interest Rate. And as you can see, france down. Germany down 3 . This doesnt bode well for u. S. Futures. Were pointing to an almost 300 point decline for the dow open. Moves to the down side for all of the major indeces in the u. S. European banks have now lost about a quarter of their market value since the start of the year. Shares down sharply this morning. The bank set aside money for legal costs. Good morning nancy. Good morning. Socgens results only adding to the nervousness around the European Banking sector, and a key part as you just touched on is the litigation provision which hits at the heart of concerns that the European Banks have not gone far enough to reduce costs and reduce exposure to regulatory risk. And this is eight years on from the financial crisis. The other top concern is the question of profitability and whether or not socgen will have to reduce its target profit. They simply stated that they want to achieve a 10 return on equity, and theyre sticking to that for the immediate term, but they would not go beyond that. They would not confirm it for the full year of 2016. I had a chance to speak to the ceo of socgen and asked him how concern he was that the market turbulence could take a turn for the worse. All in all, i think globally speaking, systematically, when you look at the system, i think its much morre robust and i think theres too much nervousness compared to reality. So the ceo of socgen the discrediting fears. This is not 2008, this does not take away fears that the new normal for banks is a drag on profitability and chief risks, the low Interest Rate that is here for now or longer. Thank you strch for that. The results were disappointing because costs eating profitability. So it is worth bearing out of mind that socgens fallen very sharply, 14 , selling across all the European Banks. Its not really the kind of credit fears that have worried investors for the last two weeks. So its interesting to see how much. All the banks have to come out and say this is not 2008. The fear is overdone. The markets not listening right now. For continuing coverage of this market selloff. Everything is moving right now, including oil. Stay tuned on cnbc first in business, worldwide. Friends coming over . Yeah, so . It stinks in here. Youve got to wash this whole room are you kidding . Wash it . Lets wash it with febreze. For all the things you cant wash, use. Febreze fabric refresher whoa hey mrs. Webber inhales hey, it smells nice in here and try pluggable febreze. To continuously eliminate odors for. Up to 45 days of freshness pluggable febreze and fabric refresher. [inhale exhale mnemonic]. Two more ways to breathe happy hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Vern from voya . Yep, vern from voya. Why are you orange . Thats a little weird. Really . Thats the weird part in this scenario . Look, orange money represents the money you put away for retirement. Save a little here and there, and over time, your money could multiply. See . Ah, ok. So, why are you orange . Funny. See how voya can help you get organized at voya. Com. Good morning. If youre just waking up, lets get you up to speed on the overnight market action. Here we go again. It looks like were in for another sharp selloff on wall street. The s p futures down 84 after a pathetic attempt at a rally yesterday which ended with the dow and s p ending lower. Were looking at a potential fifth day of losses for u. S. Stocks at least on the s p and the dow. Check out the dollar. You are seeing a lot of fear and concern manifesting in the currencies right now. The euro is down. Check out this move, 1. 7 . Its not every day you see these kinds of moves. A stronger japanese yen, moving against what the bank of japan did, cutting Interest Rates into negative territory. Sweden doing it overnight offered a lot of concerns over what banks are doing and whether its working. Apart from against the pound, come on sterling, youre embarrassing me as i move over here. Other headlines this morning, a rough start to 2016 for bill ackman. His portfolio dropping nearly 19 so far. Akmans firm ended 2015 with its largest ever, posting a 40 gain in 2014. Tough, tough perfor