china moves to inject $50 billion into the market. the ecb meeting with a policy decision over a few hours. >> media giant viacom slashing compensation for the ceo. this as the company faces increased pressure from shareholders. it's thursday, january 21st, 2016 and worldwide exchange begins right now. ♪

good morning and welcome to worldwide exchange on cnbc. >> i'm wilfred frost. another day. another wild market ride. let's bring you up to speed on the overnight action in asia. we're staring at losses for the main ones. stocks posted early gains but quickly reversed course in afternoon trade. the shanghai composite touching the lowest level since december 2014. the hang seng dropping to a three year low. you can see the moves across the board there. we also saw japan move down as well. shanghai pumped money into the financial system ahead of next month's lunar new year holiday. offering more than $60 billion worth of loans to commercial lenders today. if you look at this week's net cash injection it's the largest number in four years. that's into the money markets and not the stock markets. in japan stocks were up nearly 2% at the highs of the session before closing lower. more from sri in singapore in just a minute.

japan of course fell sharply yesterday entering into bear market territory and cemented that move today. >> also see a strengthening yen. that doesn't help. >> at 5:00 a.m. eastern time futures pointing to a negative start. they were higher earlier. s&p down 4.5. nasdaq down 13 but there's a long trading day ahead. anything can happen. yesterday's action this was amazing. the dow traveling more than 1,100 points during and 550 points at one point and it closed lower by 200 points but the nasdaq lead the charge higher in terms of the rebound. bio tech didn't lift the entire

market into positive territory but the nasdaq closed about five points lower. i mean, the volatility was stunning to watch. extraordinary turn around in the middle of the day. it opened lower anyway and cemented the falls and then bounced back and oil throughout the day was very, very low. >> 6.7% on the day. it was crazy. >> and to wonder what people were driving at. if we consider what we have seen in markets here, the s&p 500 at its low yesterday, $2 trillion wiped off it's market cap over the course of just the s&p 50 and you do start to wonder when you see those moves, the size of them, and yes we have seen buying in other asset classes but not to a huge extent when you look at the bond market and gold. where is that money going? are people selling for the sake of selling? and when you see the size of the moves in one day it does make you think there's an element of capitulation and it's not

fundamentally based and it's just panic. >> you hear about covering their short which is is why you saw the rebound yesterday and you wonder what the damage and destruction of a 2.5 week period like january is going to be for commodities and funds. obviously on the look out after market carnage like that. was yesterday's turn around a win for the bulls? what did it tell us? a bounce, a bottom? doesn't look like it because futures are lower. also ecb, european central bank is meeting in frankfurt right now. expected to keep rates on hold but market watchers are looking for president mario draghi to mention anything about growth and inflation risks which have increased there. could mean more policy easing later this year. will he mention the market turmoil that hit europe harder than the u.s. and major loss

yesterday. in terms of the currency market we mentioned buying of the yen. that's reversed. perhaps that's why we're seeing an improved tone. the euro stronger. that could change in december. the euro shot up when he disappointed with lack of stimulus and then oil leading the charge for all markets these days. under pressure again. this is the new march contract which started trading. yesterday, wti closed below the $27 level. march coming in higher but still down 28.22. the international benchmark below the $28 barrel level. >> i don't think we get any action today from mario draghi despite the events of the last couple of weeks and the reaction. >> the question is will he jawbone? will he talk the markets down a little bit? >> the markets definitely expecting very dovish commentary from him and.

>> and that's another point why he did quite well. he has a big political back on his hands as well as economic. sri joins us from singapore with a round up of what happened. sri. >> hi, it's quite a stunning session over the course of the asian trading day. extraordinary reversal because we started off the morning in reasonably good form and then it just turned lower we saw this selling in the afternoon session in the asian indices and speaks to what you and sarah were talking about earlier. this correlation between oil and the major indices was very, very strong. very tight at the moment. nikkei 225 now dropped a thousand points over the past two trading sessions. off by 2.4%. so deeper into bear market territory. a lot of uncertainty over the bank of japan.

mixed signals coming from then on the policy front. they meet on january 29th. elsewhere, china markets, we saw a big wad of liquidity. hasn't calmed the nerves of the shanghai composite. all the broader markets in mainland china and stresses on the hong kong market. so what these markets need out here is a positive catalyst whether it's going to come from the ecb next week or the boj. after that is the big open ended question. sentiment remains very fragile out here. no doubt about it. about to you. >> thank you for that. it's another busy day for earnings and economic data. we have weekly jobless claims out at 8:30 a.m. eastern. expected to drop back toward the 275,000 level. claims held below 300,000 for 45 straight weeks. also we get the monthly philly fed survey which tracks business conditions in the region. travellers, verizon and bank of new york me lon are among the companies reporting results

before the opening bell. after the close we hear from american express and starbucks. >> starbucks is going to be great to watch in particular because they just doubled down in china in the middle of the market turmoil and concerns about the economy. crude oil plunging below $27 barrel yesterday. that was the first time we saw that level since back in 2003. it's down more than 25% just this year. joining us, john kilduff. you have been expecting the move lower. were you surprised to see a 7% move lower yesterday and continued selling today? what is driving it? >> well, i thought there might be some wild action yesterday sarah because of the expiration of that february contract. as the futures contract, you know, really trues up with the conditions on the ground at the delivery point, we're massively oversupplied if not almost at capacity there so i was fearful of a price break and i guess for the most part we got it and

there's a new wrinkle to this bearish market almost on a daily basis. whether it's ramping up their exports or the worsening conditions in china and what the central bank there may do about it. >> let's talk about iran coming back to the table because clearly we had an extra leg lower this week core lati with having it's sanction lifted. who is going back to iran to buy? is it people across the board or specific buyers? and what does that mean for the dynamics of the oil market? >> they're selling into an already wildly oversupplied market. their traditional buyers, india especially is stepping up to resume purchases in a big way of iranian oil but they're also trying to sell into the european market where they're competing against russia, saudi arabia and even the newfound exports from the u.s. are headed that way too. so it's really a massive market

share battle and there's a lot of skepticism that iranians could do that and i would caution against not believing in them. they can do it. there's a ton of floating storage. the ability to ramp up the infrastructure to achieve this ramp up in exports is there. >> it was earlier weaker. >> 28.4. in corporate news, the media company's top two executives are worth their hefty salaries. landon joins us with more. >> viacom cut the compensation of the executive chairman and shareholder. red stone earned $2 million for the physical year that ended in

september down 85% from the previous year as he became ineligible for a bonus which was $10 million in 20 14. they won't say whether this was a decision by the board that has been underfire for relaxed oversight of executive pay. it comes over his health. it alleges viacom and cbs improperly paid millions for red stone services while the 92-year-old was mentally incapacitated. he is also getting less money. his 2015 bonus shrinking to $14 million. 30% less than the 20 million he received in 2014. his $4 million salary an annual stock award of $18.9 million are unchanged. shares falling 43% during physical 2015 ending september 30th and closed at 40.67-on-wednesday. back to you. >> landon, thank you for that one. let's have a look at other stocks this morning. reportedly offering more than $5 billion to buy shark.

wall street journal reports they have no plans to replace top management which could reassure japanese officials worried about an overseas take over. they're said to be considered a takeover from a state backed fund up 5.8% today. shares of deutsche bank getting hit hard this morning. the firm expects to post a record loss for 2015 of $7.3 billion. write downs, litigation charges and rough trading environment. there's going to be a loss regardless of the write downs in the 4th quarter. barclays is closing it's cash equities business in asia and we'll pull out of taiwan and south korea. the moves apart of broader reductions that will lead to more than a thousand job cuts across it's investment bank. that's flat: these are slightly priced in but both having to cut costs. >> and new moves for the new ceo

there. >> kinder morgan swinging to a loss in the fourth quarter and announcing a cut to its 2016 capital budget. also cautioning weak commodity and stock markets could bring more trouble for a stock that has already gotten being down so hard as you can see. earnings in line with estimates, revenues topping consensus with a boost of sales of new products and results from f5 networks beat the street but it's current quarter forecast is coming in soft and the stock was under pressure higher in the premarket. when we come back, china's central bank makes a massive cash injection into the markets overnight ahead of the country's lunar new year holiday. plus martin wolf about the aggressive move and what it means for the global markets and the global economy. plus we're asking you on twitter this morning, which bottoms first? oil or stocks. vote now, keep the votes coming. a lot of you are saying oil. oil leading stocks lower. will it be the first to bottom?

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requires the next wave of security. we're ready. are you? >> the other markets are getting a boost hoping that mario draghi

will be dovish. deutsche bank falling 7% and let's see what this means for futures. a little bit of positivity. we're flat at the moment. slightly negative and that also following some declines in asia and continued declines for oil prices. >> now for the trade of today if you're looking for ways to position yourself in a bear market and who isn't these days, here's what history suggests might be the right thing to do. bonds, gold and the dollar are the way to go and here are the etf's poised to bounce. 7% away now from entering a full blown bear market all the times that the index declined by that much in 30 trading days. the tlt, iau, ief, and those are etf's all traded positive. they're all safety plays and they historically tend to do well when we see these kind of declines over a sharp period of

time. >> joining us is the chief economic commentator and he joins us live to give us his perspective of what's happening around the world. >> great hat. >> lovely hat. >> i bet it's chilly there and thank you for joining us and being with us here this morning. now you wrote a big piece yesterday on china martin and the conclusion was either continue to stabilize reforms are they focused on short-term measures and ignoring what could be beneficial long-term? >> well, it's pretty clear that the reform process itself has been very slow as i argue in the

piece. but they are faced with a short-term now. i expect a lot of short-term stimulus. monetary and physical measures will be the order of the day and in the short to medium run those will work but the worry is they will also get in the way of the reform process and take effort from it and make it more difficult and in the long run therefore they won't solve their problems. >> of course we have to give credit to the way china has managed it's economy in the past three or four decades. we used to think japan was good at managing it's economy. do you think china faces a similarly lost decade or so period of growth like japan did? >> i don't want to make the comparison too closely because japan was relatively much richer. opportunities were much smaller.

it was much more difficult. in all of these respects china's position is much better but they are investing 45% of gdp. the economy is probably only growing 5 or 6. debt is accumulating rapidly. they're getting on the other side of the debt cycle. it was wonderful when it goes up and it has gone up like mad. it's terrible when it goes down so probably it won't look quite as miserable. relative to past performance but their reputation is falling and in these conditions they do things that people don't understand. and their reputation goes. well it would not be surprising to me if true growth of china was say 4% or so, maybe a bit more and compared to the past that would look grim.

of course compared to us it looked wonderful. >> clearly you have a lot to talk about there in davos. i'm curious about the mood, the sense and the level of gloom there because as the financial elites, the ceo and policy makers mingle they dropped 550 points. a lot of people are questioning whether there's a global recession, signaling a u.s. recession. how does it feel over there? what are they saying? >> well, this is the people i've spoken to tend to be be wilderred in the sense that yes the world economy is in trouble in the sense that there are some worrying things going on. some big changes going on but seems to be no reason to believe we're suddenly leaping into a world recession so the markets seem to be overshooting getting exaggerated in their worries as they tend to but of course if the markets stay like this that will change the world economy. it's not just something that goes on outside of the world

economy, it's part of it and if it's bad enough could make the world economy, particularly if it leads to real financial shocks weaker than we expect. so the were i ri in a way is what we have to fear is fear itself as some people argued and that's where i am at the moment. there's real things to worry about and oil prices for example but i think it's going to be positive for the world economy. so it's a bit exaggerated. in fact quite a bit exaggerated. >> thank you for joining us. a pleasure speaking to you. do come and join us in studio in the future with or without your hat as you wish. >> the hat is very happy to come. >> thanks, martin. when we come back on worldwide exchange, round up this morning's top biggest market movers and there's a lot of market action. red arrows adding to a rough start to 2016. at yesterday's low the s&p 500 lost $2 trillion in market cap. all 30 dow stocks close lower and only one nasdaq 100 stock was positive.

that would be intuitive surgical. but first as we head to break, nbc's grant johnston joins us from kxas in dallas ft. worth with today's business travellers forecast. >> good thursday morning to you. here we go. all watches and warnings for the major winter storm on friday and saturday. the snow begins in memphis today. heavy snow for nashville, louisville and through the carolinas on friday and saturday and blizzard watch for washington d.c. some spots could see 2 to three feet of snow. pay close attention to that storm. right now snow across kansas, nebraska, missouri, this morning some thunderstorms in parts of texas. that's where the wet weather will be. the rain for dallas ft. worth today also houston. the rain changing to snow in memphis later today. some snow winding down through the midwest. another batch of rain coming on shore in the pacific northwest. it will be bone chilling cold up to the north and around the great lakes. milder toward the gulf coast. more on worldwide exchange right after this.

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invest with confidence. welcome back. dow futures down 30. making headlines this morning imf chief winning support from british finance minister george osborne. he will nominate her today for second term as managing director of the international monetary fund. at this point she has no major challengers and she said she would serve another term. her term expires this summer. >> still to come here on worldwide exchange, a live

market report from london. the story behind deutsche bank's big loss and it's 8% fall. 7.3% fall in european trade. we'll have that for you in a couple of minutes but first check out the global markets in bear market territory. they're not the only ones. in fact, also the likes of germany and spain joining china in bear market territory and more analysis on that and much more here on cnbc after this break.

good morning, another wild ride. u.s. stock futures swinging again after yesterday's 1,000 point move on the dow. >> a scary economic sign from the baltic dry intex coming up next. >> plus general motors makes a move into the fast lane with a new car sharing program but can it pass the competition? it's thursday, january 21st, 2016 and you're watching worldwide exchange on cnbc. ♪ >> if you're just getting up a good morning to you. let's check in on the global markets this mortgage. u.s. futures moving around all morning currently pointing to a negative open. a slightly negative open. dow down by 30 points. the s&p by 2.5 points and the nasdaq by about nine points following yesterday's huge moves

in u.s. equity markets. let's also quickly see what happened around the rest of the world in asia. we're looking at declines having had strong gains at the open. japan was up 1.9% at the open but ended up closing down 2.4%. another massive day of moves for japan. similar big declines yesterday and declines across the board. shanghai down 3% and hong kong down a couple of percent. >> just to tell you where we are, the lowest level since 2014. we importantly closed below the august low of last year of 1867. a lot of people say that could trigger more selling. we're seeing it in futures. a number of big movers in europe this morning including the big banks. nancy joins us from london with a look at the moovrs nancy and the european indices entering bear market. >> hi, sarah. i can bring you good news because european equities are shrugging off the bad news out of asia for the moment at least

and picking up momentum from the upside. we're seeing gains of 0.7% for the broader stoxx europe 600. let's look at how the moves are playing out one by one here. let's start with the italian main market. the ftse mib out performing now due to a rebound in the italian lenders we have seen. trying to reassure investors and that's helping to lift the market. the french main market up 0.8%. the xetra dax up 0.6%. this despite weakness from deutsche bank. we did get a profit warning a bit earlier and that's dragging shares down one of the worst performers here in europe. deutsche bank off 7%. now touched as low as 9% to the down side earlier and deutsche bank with the first full year loss since 2008. we're talking about a fourth quarter loss of 2.1 billion euros. that's litigation and

restructuring and weakness in revenues that surprised many to the down side. back to you. >> thank you for the market check in europe. interesting comments to tell you about on the sell off. the major declines that we're seeing in the stock and credit markets could suggest that margin calls are going on. also saying that he doesn't expect the high yield junk bond market to bottom out unless the volatility index rises above 40. it's currently just below 30 and importantly, wilfred not at the highs we saw last august during the china induced sell off which was much more fear driven. higher vix levels. this is a liquidation cycle and the market has a sell the winner mentality which clearly we have been seeing even the few hundred point buys in the futures that we have been reporting on that we get sometimes can't really last. that mentality we have seen over the bull market not going on. >> every time we have seen a

little bit of a rally we two days later had a sharp fall. >> he thinks it's going to get worse before better. >> a scary sign from the baltic dry index. it's often seen as the bell weather for the health of the economy and it's fumbled to the lowest level ever of 396. to put that in perspective the index was above 1200 back in august. it measures how much it costs to ship dry commodities or materials. the most recent time it crashed was before the 2008 global financial crisis. so take from that whatever you like but not a positive sign for sure. >> it is china and commodities. both of which have been weak this year. exploring the future of electricity and fast growing economies is a major focus of business leaders in davos at the world economic forum and joining us to talk about this is the president and ceo of ge power and water. good to see you.

thank you for joining us from davos this morning. >> good to see you sarah. >> on this discussion about the global economy everybody is going back to their outlooks and reassessing what we have been seeing in the markets out of china, out of commodities, you're uniquely positioned here to see everything from commodities, coal, china, electricity. what's your sense of where we are now in the global economy. >> clearly there's a lot of volatility right now. but my space is the world of power. still today, 1.2 billion people in the world don't have electricity at all and another 2 billion people don't have adequate electricity so i spent a lot of my time here at davos, we have a report coming out and some of the faster and between now and 2040 to build out the

electricity required for the economy. >> so given the sluggish growth environment that we're in steve it's going to require massive infrastructure spending to get electricity to all of the people. i don't see a lot of political appetite for that here in the u.s. or abroad when governments and central banks are trying to fight for their currencies and economy and inflation and all sorts of other big problems one of the biggest themes is the digital economy and power is essential to allow people to participate in that. in terms of the investments a lot of people talk about the need of coming out of cop 21 and people again need affordable, reliable and sustainable power and if you talk about digittization and the impact it can have there's a lot of the worlds power right now that's out there. one point of efficiency

improvement with softer analytics with those physical assets that's 2 to 3 points of carbon. that's the equivalent of 50,000 new wind turbins. productive can be unlocked with utilizing digital and hard assets and that can happen regardless of the economic environment we're in. it's good for bringing more electricity to people and they can play now with this new economy. >> steve, we're going to have to leave it there. we're tight on time. thank you for joining us this morning from davos. on the corporate front here are today's stocks to watch. apple slump bargain or a frightening indicator. there's a slow down in demand weighed on shares. here's how important the tech giant's health is to the overall market. according to howards and s&p dow jones indices, apple's profits are so large and important they expected to count for more than 7% of the offerings reported by all the companies in the s&p

500. quite a significant bell weather for the index. m&a move fireeye buying isight partners for more than $200 million. that's up 6% on the news and chesapeake energy at the lowest level since 2003 as oil sinks. look at that chart. not pretty over the last year. >> as a result of that more layoffs in the oil patch. they'll cut the work force but the firm hasn't offered details on just how many jobs it's planning to slash. lodge tech hiking the 2016 outlook as it wrapped up it's restructuring and citrix systems. appointing the microsoft veteran as it's ceo. >> if you're among the star wars fans that can't wait for the next movie to come out you'll have to travel to a galaxy a little further away. landon joins us with more on this story. >> i saw the recent one and i can't wait for this one. but they're pushing back the

release of the next installment by 7 months. star wars episode 8 will now debut on december 15th, 2017 versus the previously scheduled release that may. they did note the overwhelming successle of the force awakens. it's already the top grossing movie of all time in north america with $861 million and the third biggest globally at $1.9 billion. filming on episode 8 is expected to start in london next month and to fill the slot vacated by star wars disney is moving up the release of the next pirates of the caribbean movie to may 17th and the first installment dead men tell no tells johnny depp returns along with jeffrey bu rush and orlando bloom. the last made $1 billion worldwide. >> i'm glad you mentioned it's filmed in london. this is a british film but it's

also not just the ticket sales that have been absolutely blowout for disney on star wars. it's merchandising and things like that. it has done well across the board. >> star wars was the force to be reckoned with. $700 million in sales last year which helped give a big boost to total sales which topped $19.5 billion in 2015 and it's interesting. they couldn't keep the rae doll on the shelves. have you been doing some shopping? >> not particularly for that but i wouldn't mind a light saber. they're cool. landon thank you for that. let's move on to today's top trending stories. general motors is launching a car selling service. this is taking off in london and taking off here. there's even more point for it here because there's so many

taxis and everything around to own a car on top of that -- >> the big elephant in the room is uber. to see the auto makers get into this game. the undeniable fact that they're moving into it. if you can't beat them, join them. >> you rent one when you have to drive further distances but for all the city moves what is available. >> i use uber at least once a day. >> there you go. for a used car turns out the fiat 500 used by pope francis during his visit will be auctioned off in philadelphia later this year. proceeds will go to several charities supported by the arch diocese. remember this, this is crazy. so everyone expected him to be in the pope noble. >> and he wasn't. >> but this is great. he's the pope of the people. so he was just driving an average little fiat. >> it wasn't -- i mean, come on, this was a great marketing employ. fiat obviously got him to do it but it's iconic and he's raised

up and coming around. a bit of a shame. >> google is offering a 3-d tour of buckingham palace. you can tour the queen's home and see five of the 19 state rooms. her majesty has not tried the experience yet but given the project her royal seal of approval. >> should we do this? >> it's virtual. it's not a video tour. >> this is how realtors sell apartments these days. >> i don't think that we're imlying that her majesty is about to stick her buckingham palace on street easy. >> but i wonder if it will decrease visitors. >> i can't imagine it will. nothing beats the real thing. >> did you see this? twitter and square ceo jack dorsey no longer a billionaire after his shares of both companies dropped wednesday morning. shares of square dropped below 9 dollars. that's the first time it dropped

below the ipo level. it ipoed in november. twitter fallen out of bed. the stock down over 50% in the last year. there was always this question about whether he could run both companies. he was seen as a savior. co-founder comes back to twitter. turn it around. get into the questions about growth. so far that's yet to materialize and square also -- in this whole market everything is being questioned but especially the growth stocks with some uncertainties and people put square and twitter into that. >> twitter also didn't even have the big rise last year that the likes of facebook and netflix did. more on twitter after the break. still to come, today's must read articles. that includes as we just said some m&a rumors around twitter. so we'll be discussing that after the break. stay with us on worldwide exchange. you're watching cnbc first in business worldwide. ♪ olay regenerist

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welcome back. let's get today's must read stories catching our attention. first why twitter's battered stock could make it a takeover target. sharp share price declines though have a way of changing things for investors the biggest upside so a swooning twitter is somewhere else may step in. all of this has been coming on to the discussion boards and

markets over the last couple of months and if we look at the growth it still has in monthly average user growth the only thing i would point out is yes it's clearly a decline over the last year or so but it's still growing. it's not like it's actually falling. >> not fast enough. >> not fast enough but that trend is clearly not attractive in the chart we're looking at but it is still growing and the article suggests while facebook wouldn't buy this it likes to buy early stage companies this could be something that google would buy. >> that's been going on forever and the market doesn't believe it. the fall may make it more likely but the stock hasn't caught a bid on this idea that the m&a would be for real. i understand the argument they're making. we do a twitter question and use twitter. it's an essential part of our job. >> can't monetize it. >> they can't monetize it and grow the user base and that's

something people are still thinking about and i wonder if someone would buy it. my must read of the morning comes from the new york times business section today. it's an unexpected consequence of weak commodity prices, weak oil and weak currencies. the title of the peace the $8 cauliflower shows the pain of falling oil prices. turns out that the price tag of 8 canadian dollars has tripled in price for cauliflower because oil prices dropped and slammed the economy and slammed the value of canada's currency. the canadian cars were worth 93 american cents and now it's less than 70 american cents. people ask me all the time why are you obsessed with currencies. it's so boring and it's so macro it influences everything including your cauliflower. this is a great read if you want to know about currencies, economy, global commodities and

cauliflower. >> i agree. who is the big producer of cauliflower? >> the u.s. so it's worse because of the california drought making the sticker shock worse but the real corporate is the canadian dollar. >> do you think we'll see a cauliflower smuggling ring top up? trying to get cheap cauliflower across the border? >> i don't know but it's indicative of how it made inflation in the countries. emerging markets are dealing with weak growth and high inflation. because their currencies are collapsing. >> there we go. cauliflowers. read about them in the newspaper today. >> when we come back, famed economist and strategist david rosenberg is here. hear what he says is bugging the market and whether it's signaling something darker about the economy. and at the top of the hour, can't miss squawk box today. they'll be speaking with the ceo of citi, hewlett-packard ceo.

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>> if you look at the last major economic downturns, 73, 80, 82. 97. kind of the age of currency crisis. 2001 internet bubble. the only one with a market was '08. >> that was jp morgan ceo jamie dimon on cnbc talking about all the fear out there. we're going to continue on that topic with david rosenberg. chief economist and strategist. >> david, thank you for joining us. good morning to you. what's the overriding problem effecting markets so far year to date? >> well, i wouldn't make a recession a base case scenario

but we're talking about financial markets here and financial markets respond to change at the margin. so although i wouldn't be predicting a global session and it will be difficult to have one unless the u.s. joins. what happened is at the risk of recession it's higher today than it was three, six, or 12 months ago. and the way the markets work or the way a portfolio manager's mind works is a probability curve and the range of outcomes is always wide but i would say that what the markets are responding to right now is that rising risk, whatever the odds may be has gone up and the markets have reacted accordingly. >> so you heard david just say markets don't yield recessions except for 2008 and everybody is wondering whether the market is divorced from reality. why is the market freak out so much? the only problem with that argument is during the run up

over the past few years i'm not sure that was necessarily reflective of a booming u.s. economy. so are people disguided? is there more about central banks that we're not thinking about in terms of the sell off? >> well, i wouldn't say that the markets are misguided. they're going to overshoot and undershoot in both directions. you know, we did have the mother of all bull markets when you consider going into the peak last year. the s&p 500 tripled. the total return index is over 200% in the context of a growth economy. normally in the past when you will the u.s. stock market triple it was in the context of over 4% growth. we did 2% this time. maybe the expectations that 0% or negative rates or qe was going to work it's magic and lead to it that never happens. maybe there's reality coming. it's really about the economy.

if there's one region around the world that doesn't get enough for putting in descent economic data this year it's been the euro zone and even today we have industrial orders for november up almost 4% year over year. that's pretty good. we had a couple of january sentiment indices coming from services and manufacturing that both picked up and you can argue that the markets are ignoring it. it's down 15% this year. so i think there's just generally a reappraisal of risk. are the markets overdoing it? i would say they probably are at this stage. look at even in canada, you know, the tsx is pricing in a recession right now. we had a mini one in the first half of last year. it's behind us but the reality is the markets will tend to overshoot and undershoot. go back to the fall of 2011 the s&p 500 suffered a 22% decline. we're not there yet for the major average for the s&p. we went down 22%. serve talking about the ecri index pointing to a double tip

and we never got it and we brought in the move higher after we hit the lows in the fall of that year. >> david we're running out of time. our question is what bot thomas first? oil or stocks what would be your view? >> oil will lead stocks. if there's one variable we have to focus on exclusively it's the price of oil. so that bottoms first and when that does happen it will happen. a lot of other things are going to follow suit. >> thank you so much for joining us this morning. david rosenberg. chief economist and strategist. >> from toronto enjoy your 8 canadian dollar cauliflower. before we go, we want to show you what's going on with futures. already the dow and the s&p are on track for their worst month since february 2009. february 2009 was the month before the market bottom after the financial crisis. this has been an absolutely brutal few weeks of selling with

dow futures pointing to down 36. >> that's it for worldwide exchange this morning. thanks for joining us and have a very good day.

>> the futures are pointing to a lower open. the dow managing to cut it's losses in half after 565 point plunge. it actually closed up yesterday. oil prices slumping again but will the drop in crude mean bigger profits for southwest airlines. the ceo talks to us first on cnbc and blizzard assert. we have surrounded by snow here

at the world economic forum. we could be returning home hopefully in the first major east coast storm of 2016. hope it stays south of jersey. >> hopefully. >> maybe it will be in d.c. the nation's capital retuexpect as many as 30 inches by sunday. it's january 21st, 2016 and squawk box begins right now. >> live from davos switzerland and the world economic forum, this is squawk box. >> good morning, everyone. welcome to squawk box here on cnbc. we have a great line-up