good morning. breaking overnight, chinese factory activity drops to a three-year low. new this morning, the bulls look to bounce back wall street, opens the books in february after the worst month in u.s. stocks for at least seven years. and it's finally here, caucus day in iowa. the race for the white house kicking into full year. it's monday, february 1st, 2016. and "worldwide exchange" begins right now. ♪ good morning, welcome to "worldwide exchange," i'm sara eisen. >> and i'm domenic chu sitting

in for wilfred frost today. people will gather in iowa for their choose of president of the united states of america. >> candidates will spend the day rallying supporters. we'll take live to des moines in 4 minutes in 4:00 a.m. iowa, hugely state. the pmi coming in 49.4. that's shortly short of estimates. chinese stocks closing lower. most in asia finished higher. still getting a boost from that boj, bank of japan decision on friday. also the ipo business is having a rough start to 2016. there were no initial public offerings in january. that's the first time we have gone without an ipo of four

years here. getting a test overall with two bio companies expected to attend offerings. as for the broader markets. here's a quick look at the final numbers for an ugly, ugly january. the dow and s&p off to the worst start of the year since 2009. the blue chip index dropping 5.5%. the s&p down 5%. nasdaq losing 8% overall. it was a melee for so many parts of the market. it was broad-based, sara, in january. >> but we did end it on a positive note. friday had the best day for stockings of the year. >> huge rally. >> a nearly 400-point gain on the dow. let's check out where we stand on things this morning. in terms of future. first day of february, after what deemed a brutal month, it looks like we are headed down. dow jones industrial average future is down 104. s&p down 13, nasdaq down 30. oil is weaker. that's part of it. that chinese manufacturing

number disappointing. let's show you where we are in the early trade here in europe, which also had a pretty negative month in january. right across the screens, nothing like the kind of volatility in the 2%, 3% moves in the first three year weeks of the year. still, the dax, down 0.7%. ftse 100 down 0.6%. >> and a broader european privilegi peripheral market here. and wti down by 1.5%. brent crude futures down by 0.6%. $35.78 per barrel there. natural gas futures down by 4.2%. $2.20 for energy overall. let's take a look at what's happening across the treasury complex as well. if you take a look at the

ten-year note, we're hovering at 1.93%. yields relatively flat so far. just checking out what's happening overall in reaction to european stocks being lower. of course, the drop in crude prices. ten-year note holding steady at 1.9%. trending lower. >> the picture of currencies as well. the dollar was marching higher. got a big boost off of that bank of japan surprise interest rate cut to negative territory on friday. that is still heading higher against the japanese yen. that dollar yen has been a real point that investors have been looking at it when it goes higher stockings are not following suit. 121.18. and the euro, 1.0855. and checking out gold which did get a boost getting market turnout and volatility. a lot of people looking at gold

saying if the fed is going to be son hold and not too aggressive with interest rate hikes you can be a buyer of gold. we will see. >> $1100 that was that kind of psychological line in the sand that people were looking at. we'll see if it holds there. >> we're in a new week. knee deep in earnings. we've gotten a third of the earnings out of the way. >> the s&p, sure. >> clearly, earnings do matter. though, it is a tale of two economies and with facebook adding 50% revenue growth. and companies like chevron on friday posting the first quarterly loss in ten years. >> it's interesting all of the top performers have divided themselves out. amazon one of the biggest performers last year shows moves downsides here over the course of the last couple of weeks. >> so, if we look at what's ahead on wall street, earning are going to matter. >> absolutely. >> google alphabet, we'll have a preview of that, landon has

that. and then construction spending, that's going to be the key for the big fed trade. and what the fed is going to do. are they still going in march? the time that's on the table or are they going to have to wait? >> the markets are telling us exactly what you're seeing down 105 points. >> in corporate news, barclays and credit suisse. to settle dark pools. barclays will admit they broke the law. and credit suisse will pay a fine for executing illegal public penny orders out its dark pool. credit suisse will neither admit allegations as part of its settlements. and dark pools have been such a

huge part of equity trading here in the united states. >> and other stocks we're watching, warren buffett increasing his composure. and berkshire hathaway bought about 2.5 million more shares. berkshire with roughly 13% stake. phillips 66, now berkshire's sixth largest stock holding. >> eslon musk is increasing his investment in tesla motors. he's exercising 35,000 in stock options. the shares were priced at less than seven bucks. less than 3% of their current level. tesla says musk paid more than $50 million of his own money to cover taxes on this investment. toyota holding production in japan for six days this month due to a part shortage. the company says that stems from an explosion in january at a steel manufacturing plant. production will be suspended next week. however, overseas plants will

not be affected. >> toyota share it's in green here. more stocks to watch today to watch. ge strikes a deal to invest $600 million in italy. to build turbines and compressors in tuscany. ge said the structure of galileo will boost revenue by $1.7 billion over the next five years. coca-cola taking a 40% stake in a nigerian snack maker. the deal will allow coke to increase its ownership in qi limited. and to africa by $17 billion by 2020. also, blackstone is reportedly shopping one of its biggest holdings in china an i.t. outsourcing firm.

"the wall street journal" said the private equity firm has hired morgan stanley to run the sale. blackstone bought pactera by more than $600 million. the flow picks almost we look ahead to friday's job report. we'll get the january personal spending numbers followed by the january manufacturing ims manufacturing index. vice chairman stanley fischer speaking out on foreign relations. aetna reporting earnings with the opening bell with sisco and we'll hear from google parent alphabet and mattel. >> and one of the laggards with hasbro, with the "star wars" toys out there. we'll watch mattel. speaking of that tech giant al afa bet, like sara said,

alphabet will be the first time it will break down, from its at least alphabet division an its google division as well. we've been revealing a to z of all of its different parts here. landon dowdy joins us more with the alphabet story. landen, for google -- i can't stop saying google. >> let's call it alphabet, dom, it shows its new results in a different license reorganizing itself last year analysts say it should make it more profitable. but it's the individual segments that have the attention for the first time. google core which has search, youtube and mobile. then the other bets or moon shots like driverless carses, smart homes and health care. alphabet will disclose revenue

with operating income and revenues for expenditures dating back to 2015. it should highlight the strength of google's core which some believe is more profitable than apple as a whole. with engagement and ad dollars that aren't being offset by other investments. alphabet is outperforming the s&p 500, guys. >> this is interesting with the alphabet/google conversation. i guess, landon, one of the interesting things about it, the whole idea that google/alphabet, apple is worth about $540 billion. alphabet is worth 524, 525. >> they're catching. you. >> they are catching up. the question is, landon, what are you watching for. >> what do you think could happen with alphabet stock? do you think it could maybe take that step towards surpassing '? >> dom, i think you're on to

something. i think there's a very good chance. i think analysts are looking for four things. consistent revenue growth, stabilization, disclosure and buybacks. they're expecting to get those four things if they do, there's a chance that alphabet could pass apple as the largest company. when we come back, a live report from london. plus, oil prices dropping this morning. we'll be keeping an eye on that with that close correlation between oil and stocks. energy analyst miking rockman will be joining us with this call on crude with speculation that some opec members might cut production. but before the break, we want to hear if you. the twitter question this morning, will february be a better month for the bulls than january? tweet us, vote, yes, no, or same. we'll share your answers later

on. we're going for a sentiment reading here as we kick off february. good morning. you can't predict... the market. but at t. rowe price, we can help guide your investments through good times and bad. for over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions... you can feel confident... ...in our experience. call a t. rowe price retirement specialist or your advisor ...to see how we can help make the most of your retirement savings. t. rowe price. invest with confidence.

that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. good morning, and welcome back to "worldwide exchange." crude prices slipping following disappointing manufacturing data out of china. and the world producers will actually go through. michael rothman with us, cornerstone analytics in studio. welcome. >> thank you. >> thanks for the early start. >> thank you, no problem.

>> this weekend, a lot of speculation and trying to walk back some of this idea that opec members, non-opec, saudi arabia and russia will get together to actually cut production? >> no. >> don't think it will happen? >> no, it's never going to happen. the russians and opec have a terrible history in the meetings in the '80s. talking about production cuts, never took place. actually a very acrimonious relationship. >> what's interesting right now, we talk about the oil price dynamic there are obviously two major moving parts. that is the supply coming to market. we can talk about fracking and everything else. the demand picture, the japan pictures provided more on that front. when you talk about the balance, the scales, which do they tilt more towards in the oil price story? is it more about the oversupply in the market or is it more about commend and where that's headed in the next few months? >> i appreciate the fact it's an early hour sand most people are

waking up and having their first cup of joe, there's actually two elements. one, as you alluded, supply and demand. the markets rose and it was evident that opec's production should have been curtailed and it wasn't. we did see stocks increase. however, the other huge component has to do with macro economic concerns. you can see it at times, oil is trading in perfect lockstep with the s&p, with the euro, with hang seng and copper. both have been with dominant consideration. however, the cure for low price historically is always a low price. at this stage, there are a lot of things you see afoot setting up the other side of the trade. we're optimistic on the outlook. >> what is it, if you don't expect it to be production cuts? >> it won't be an opec cut at this point. the saudis have taken a position which has been evident at the

last several meetings that the market is going to have to self-correct. they seem to be acting very differently than what we've seen historically. but they're not looking to make a cut. what is going to happen, or really the two issues one is demand/growth, the other is sbl supply. all 81 companies will contract this year. in the first in years we'll see that. no matter how you play with the number there's going to be a gap between demand and growth and contracting. the question is can opec make up that supply. >> the ripple effects. i pay less at the pump for gasoline. what do you do with that? >> what do you do? >> let's talk about that. >> it's the tie. >> fancy tie for sure. are we going to see analysts out there, including bank of america has said this is one of the biggest wealth transfers, right? between oil-producing countries

to consumers themselves. is there any benefit overall to economies because like you said the cure for a low oil price say low oil price overall? >> actually, there's been different analyses from different groups that say that the effect in the drop in oil prices has been very mod equivalent on gdp. the wealth transfer is true, if you think of it in terms of what we saw with the arab oil embargo has been worse. in the current case, you'll want to think about this over time, i'm sure we'll revisit it down the road, what you're getting is a bit of a delayed christmas gift. prices are not going to stay this low. most budgets for the opec countries can't be maintained at this level. even the saudi level is 100 price. which is why their dipping into the reserves for the last 17 months. but what you're going to see the other side of the trade, when it becomes evident that the balances are tightening, this

literally goes in the other mode. >> and $85 a barrel this year, $33 to $85y. >> bullish. >> most people would put it bullish. no one cares about being bullish. they care about why. why are you feeling this particular way. most of what is going to be develops in the second half of the year, we'll actually get to see it after we get past the winner. our inventory has been drawn down. which most people you're talking to aren't expecting. that's the bottom line of supply and demand. as that happens, i'd expect that the sentiment is going to shift. >> we'll hold you to it. >> $85. >> michael rothman, president of cornerstone analytics. well, coming up here, we're going to head to iowa. the hawkeye state. the inside line of the first in the nation caucuses next. first, as we head to the break, the forecast from the weather

channel's jen car fo carfagno. >> good morning. we'll talk temperatures in a win the. this thing in the west, this is what we're calling winter storm kala. this thing means business. pga at torrey pines, this is the system that made the weather there more like the british open. we're going to see a lot of wind, we're going to see the chance for snow as well. potentially blizzard conditions all the way up to the rockies. the snow is going to be long lasting and that's a real challenge when it comes to the west. in between, warmer weather in dallas, 70s. we're going to have warmth and spreading into portions of the south and the ohio valley as we get into today and tomorrow which happens to be groundhog day. have a great monday. back to you. before earning 1% cash back everywhere, every time. and 2% back at the grocery store. even before she got 3% back on gas, all with no hoops to jump through.

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♪ the all-new audi q7 is here. ♪ after months of campaigning and what seems like a thousand debates we finally get down to real business. the iowa caucuses are today. the nation's first nominating contest for the 2016 presidential race. nbc's tracie potts joins us live from des moines this morning. it's still dark out there, just like it is out here. but things are starting to liven up, right, tracie? >> well, they will be certainly during date even before the caucus us tonight, we're going to have some candidates out doing their final arguments. last days of campaigning today. we're also expecting the candidates in town for their --

what some are calling victory parties, election night primary caucus night here parties. so at least ten that we know of going to be right here in the des moines area, waiting for these results. the caucuses themselves won't start until later in the evening. they'll wrap up in an hour or two. maybe a little bit longer for the democrats. and then we'll start to get some results rolling in. right now, the polls are telling us that hillary clinton and donald trump are leading. but they're lislim reads. with some cases like hillary clinton three points within the margin of error. donald trump has got five points over ted cruz. but it's iowa, caulk cushicucau. threat of snow. the fear of that may stop some people from going out. all of those are wildcards not to mention the nearly one in ten who are still undecided. and even larger margins, 30% of democrats, 35% of republicans who have just said in the last

few days that their votes could switch last minute. so there are still a number of factors that are wildcards here on whether or not hillary clinton or donald trump will be able to win here in iowa. >> tracyie, we just heard the weather forecast for the region, it looks like it will be okay. the blizzard is going to wait for a day. but a lot of the major newspapers are sort of leading with this iowa that the iowa caucus is going to be a real test, not just a first test, but a real test of this whole wave of anti-establishment parties that has swept the nation and swept the polls. when it comes down to it, we'll see really what those votes look like and whether the sanders and trumps of the world can be able to take all the hype and rally and momentum into actual voting. >> exactly. and you mentioned bernie sanders. he's sort of the establishment/nonestablishment candidate because he's really tapped into that frustration that many democrats feel. and that many young people feel.

i talked to some young people here yesterday who were supportive of him and behind bernie sanders. he has said repeatedly if there's a large turnout he will do well in iowa. it's not just about how many people turn out. one in six is the best they got in 2008. and that was the biggest caucus year. it's not how many, but who turns out. are these going the older caucusgoers, the people who do this every four years. on the democratic side they tend to favor hillary clinton. on the republican side, they tend to favor ted cruz. if you get new people out you could see changes. >> tracie. thank you. tracie potts in des moines. when we come back, this morning's top stories plus some of the world's best known hedge fund managers taking on china with bets against the yuan. the story that everyone is talking about. those details straight ahead. s e in under an hour.

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that's why i switched from u-verse to xfinity. now i can download my dvr recordings

and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. good morning, welcome back to "worldwide exchange." bearish bets. well-known hedge fund managers on the attack against the chinese yuan. it's time to caucus, right, sara? >> it is. iowa kicking off the campaign today. and the chipotle e. coli outbreak. though questions remain. it's monday, february 1st, 2016.

you're watching cnbc's "worldwide exchange" here. now, let's check on the global markets this morning. ♪ let's take a check at what's happening on global markets right here. we'll start here with u.s. futures. we are seeing what could be a negative start to the day. the s&p looking to open down by about 12 or 13 points right now. the dow jones industrial average looking to open by down 100. the nasdaq looking to open by 26, 27 points overall. if you take a look across the pond we go to what's happening in europe, we are seeing across the board there, except for a notable one on the bottom there, we'll get to that, germany's dax, the cac, the ftse 100. italy's ftse mib, and spain i dex 35, the lone holdout for the upside at least right now, marginally higher up by 0.11%. the arabian markets how they closed. japan's nikkei up by 2% close

there. the hang seng in hong kong down by 0.5%. and shanghai down by 1.7%. oil day, oil futures, wti and brent both trading down. you can see, again, overall with the oil complex, a huge story overall. crude down by 1.3%. ice brent crude futures, $35.85. now about 0.4, sara, 1%. >> it's oil and china. among today's top stories well-known hedge funds launching new attacks on yuan. the edge fund launched attacks to leverage. stanley brackenmiller and the

story got a lot of play and attention. i bet it was one of the most read on "the wall street journal." cnbc also wrote about it. the top story right now. the only thing i would say is that they are taking on a central bank and a country with $3.3 trillion in reserves. >> in reserves, absolutely. >> they have the fire power and ammunition to fight it. and they are extremely sensitive about speculators betting against its economy and currency. george soros in davos made comments. all of a sudden, the newspapers have front page editorials including naming soros not to come after us. >> the u.s. we talk about not fighting the fed. it's all about not fighting the people's bank of china. >> or fighting it. everyone is trying to pull a george soros for breaking the bank a few years ago. the flow of economic data

starts to pick up this week as we look ahead to the big friday jobs report today. we're getting january personal income and spending, 8:30 eastern time. that's followed up by the january ism manufacturing index. and in december, construction spending, 10:00 a.m. eastern time. also fed vice chairman stanley fischer is speaking about the economy and monetary policy this afternoon at the council on foreign relations. also on the micro front, aetna, reports earning before the opening bill along with the other sycco, the food distributor. and alphabet, the google parent company and toy giant mattel. >> nancy hulgrave joins us with the headlines. good morning, nancy. >> good morning, sara. there was so much hope here going into the session that we would be in positive territory after that rally on wall street friday but that is not the case. the stoxx 600 is up just by 100

here. you can blame it on china but individual earning movers. let's look at the sectors one by one. we see tech to the downside. we do have shares in nokia dropping sharply. that's weighing on merger of alcatel. that's due to a disappointment over a patent settlement with samsung. i want to point out the bright spots we've got travel leisure moving higher by 1.9%. ryanair shares rallying 3.2%. a strong showing of results. ryanair not the budget carrier. but the 800 million euro buyback so investors welcoming that one of the bright spots in an otherwise down day for european equities. now for this morning's top trending stories. microsoft is testing a data center that can operate hundreds of feet below the ocean's surface. potentially cutting down the

company's expensive air conditioning bill. right now, data centers generate heat that can crash servers by putting it under cold water that could help make the energy lower. >> it seems so james bond, science fiction, yes, it's amazing. i'll believe it when i believe it -- >> when you see it? >> when you go scuba diving? >> yes. also stuck on big tech, google is apparently testing null product of its own. the company is looking to juice solar-powered drones, yes, drones to deliver high speed internet from the air. the project is code named sky bender and began last summer in new mexico. and could potentially offer data four times faster than 4g speeds. the. were also reporting that google is testing an experimental phone service as well. when you have a balance sheet the size of these large tech giants, i guess you can do that

pie in the sky visionary. >> man shot. >> yes. >> this is actually what alphabet investors for the first time goring to get a peek into what it's costing today when they break out results for the new structure and format. the hope is from wall street investors there's going to be more discipline just because they have to. >> held accountable to each part of the business. >> it's all paid for by search. >> absolutely. cdc expected to announce that the e. coli outbreak that sickened customers is over. investigators still unable to pinpoint the problem. a lot of people are going to be watching not just what sales did last quarter, but if they can give any guidance on to january because they haven't had any more headlines or outbreaks we wonder if sales have rebounded. >> that's going to be a key. whether management can reensure investors that they will get the foot traffic back to the stores. remember, it's a brand issue at

this point. it's lasted long enough. they need to recover -- >> have you gone? >> well i'm not completely a chipotle person. >> i new mind reader could hold the key for paralyzed patients. the university of washington presented epilepsy patients with pictures and videos based on electric signals they were able to predict what patients were seeing, get this, 95% accuracy. you can believe that. if you can find a computer that could show you where your brain is being stimulated, therefore, know exactly what you're thinking or trying to communicate. that's a big deal for a lot of folks out there. >> as long as it's used for that and not other mind reading. >> you're such a pes simispessi.

new york city announcing that tourist chopper will not fly sundays starting april 1st. this is mayor de blasio's solution to try to bridge the gap of all those complaining of helicopters and as keep a business that stays taxes. >> you live in the city. do the helicopters bother you? >> it really doesn't bother me. i'm on the fourth floor. it's actually the street noise which is more disturbing than the helicopter noise. sara, coming up, this morning's must-reads including a key question from the "usa today" editorial board. why should iowa and new hampshire always go first? >> it is a good question. >> you're a native midwesterner. i want to hear your take on it. >> i'm not an i wanowan, though. six ended in positive territory, walmart, verizon, mcdonald, p&g,

johnson and johnson. and the loser, boeing, dupe point and cisco. stay tuned. olay regenerist

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first, our view touring to "usa today." here's our take. the parties are not only giving the states industries and special interests they are also shaping the race in ways that might haunt them at general election time. the point of this op-ed that iowa and new hampshire are not necessarily microcosms. the population of iowa is 3 million people. less than 1% of the united states. it's 87% white. it's older, demographics of age. new hampshire is one of the oldest states. >> i used to live there, by the way. i used to live in new hampshire i have a feel for -- >> you were too young. did you caucus in new hampshire? >> i was not there. i was only there 18 months. still, new hampshire holds a very special place in my heart because of that independent nature. that independent feel that they have. still, you're right. it may not be the most indicative part of the overall election. >> "usa today" says maybe look towards a state like florida, illinois, more diverse, more

representative of the country. >> she's from ohio. >> ohio, why not. >> battleground states. >> momentum is important. who wins one, two, threer c, cao on. >> what's interesting i'm going to move away from politics and go to my pick which is in "the new york times" it's titled as the w.h.o.ways zika as an emergency a look at the world's failed mosquito policies. andrew revkin writes, the core public health issue right now unless you are pregnant and living or visiting in an affected region is the urt failure of many nations to sustain effective mosquito controls in an era of surging

urbanization. these things were not a problem about 20 or 30 years ago because there was so much effort to bring awareness and eradicate certain mosquito species to make sure these things don't happen. because of the urban sprawl and such growth in these tropical areas let some of those policies go by the wayside? some people say if we had better policy you could avoid that. >> i know a lot of people that have cancelled trips, pregnant ladies to the caribbean. anyway, we're approaching the top of the hour, that means andrew and joe, the squawk team getting ready for "squawk box," joe joins us from new york at sny. this is a rare treat, joe, we get a chance to be in boxes right next to each other. and you're going to tell us all about what you think is the biggest thing you got coming up on "squawk box." >> yeah, news on that side-by-side. that's like -- put me next to

george clooney even -- >> oh, you're a sweet talker. >> what am i thinking of -- i've got a lot on my mind. obviously, as far as political seasons. none of us have ever been through any of this. i'm kind of glad some votes are finally going to be cast to see how things shake out. a little worried about a storm coming. if there's some weird result in iowa, it's going to be blamed on climate change. that's going to affect the outcome. so, i'm worried about that. the 500 points we got on friday, it's one day, we feel great. the next day, we're like back in oil. or china soup. it's very odd. i don't know what it means. i don't know whether it's the tremors before something that's going to happen either good or bad. january's in the books at least. i'll say that much. did you know that the groundhog is going to the same thing

tomorrow. >> punxsutawney phil, yeah. >> de blasio has been banned from the entire area. you know he's a groundhog torturer and killer, you saw that, right? >> i did not see that. i have a hard time anybody could try to hurt or kill as cute as punxsutawney phil? >> you didn't see what bill murray kidnapped the ground hog and drove off with him. and what's somebody going to do with a groundhog. that's what guy's name, chris, says, i can think of a few things. hopefully, this new punxsutawney phil is seasoned enough to get the right call tomorrow. >> i'm a warm weather guy, joe. i'm hoping for golf weather sooner than later. >> right. now, we're trying to cut down on carbon emissions. i would like north carolina weather here all the time. hey, dom, did you see san diego? did you see san diego? >> jimmy holds a one shot lead.

>> with 50 miles an hour wind, it's hilarious. >> i watched highlights of last year's farmers insurance because i couldn't watch. >> i don't even know what you guys are talking about. the worst january for stocks since 2009 was last month a barometer for 2016. jeff saut chief strategic at raymond james is here. will february will be a better month for the bulls? keep them coming. you're watching "worldwide exchange" on cnbc. eric's gotten used to the lingering odors in his bathroom

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sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. the worst for the nasdaq since 2008, joining us to discuss whether february can be different, jeff saut, raymond james chief strategist in studio. what a treat. >> what a treat is right. >> my pleasure. >> you're expecting a strong start to the year. you have changed your mind? >> no, i wasn't.

i actually called for a rip your face off rally in december. >> i remember that, too. >> rip your face off rally is what i had in mind. >> and it worked for a few days and then the $1.2 trillion opposition of it destroyed the rhythm of it. and i had to say it was a bad call. on december 6th with the dow and december lows, i said we're in a selling stampede. selling stampede typically last 25 to 30 sessions. i think it ended last thursday. >> you're calling it a near-term bottom. i think all that we saw. january was a tale of two markets. all the damage was done in the first two weeks then things kind of stabilized and then we saw this mini -- maybe rip your nose off rally -- for the last few days. what's the bottom? have we seen the bottom near term? >> you have to string together three consecutive positive days

to end a seventh stampede. we've had about two. this morning it looks like we're down nine points. you have to string together at least three consecutive upgrades to break the stampede. this week is critical in terms of doing that. >> where is the fundamental optimism coming from in terms of your view on the markets? is it because of the u.s. economy? >> i think theis economy is stronger than the surface figures suggest. i was in avro last night, 48th and lex which was clouded. the restaurants in most of the cities i travel to. are crowded. so i think the economy is stronger than people think. i do think that we saw the low print on gdp last week. and i think the economy strengthens from here. >> here's the interesting point, though. you're not the only person out there who believes that. but then i point and others

point to this idea that ten-year note deals are at 1.39%. we've got outperformance in the u.s. stock market this month. it's not what you want to see, financials and technology and the big one leading the way. it's utilities and consumer staples. and somebody's dividend paying stocks. does that lend more to the idea that the economy is slowing down and people are putting their bets there. how much do you really believe that's part of the thesis? >> i think it's because my generation is desperately seeking savings. i'm 66, we're trying to get income. you can't get it from money market funds. you can't get it from treasuries, so dividend-paying stocks, utilities is where you get your income from. i think that's a theme going forward. i think it's a long lasting theme. >> so you think it's secular? this could be years in the making here, this idea that dividend payer will continue to -- >> i do, i do. in fact the best performing

group of stocks over the past 50 years are the dumb things you drive by every day like walgreens who has increased its dif den business 10% a year forever. >> what about earnings growth? we're learning it matters to revenue growth and it's not uniform to this economy and this environment in corporate america. where are you looking for that? >> revenues have been skinny. last pay i saw revenue growth for the s&p 500 was up about 54%. earnings growth, however, was up about 62%. year over year. if you -- i don't make earnings estimates. if you use s&p's bottom up operating earnings estimate, they're looking for about $123. year over year. if you believe that number. stocks are not all that expensive. >> just got a few seconds left here. where do you think the outperformance, what part of the market does that come from.

>> what drives it for the rest of 2016? >> i actually think the financials are very cheap here. the banks are trading below the market multiple. they are decent dividend yields. i think there's a huge consolidation afoot here in terms -- we think we're going from 7,000 banks to 4,000 banks over the next ten years. i think the second end tertiary financial institutions are going to get fired. and i think it's a very fertile price to invest. >> agreeing with barrons over the weekend. >> saw that. >> 20%. thank you, jeff. >> my pleasure. now, we're watching -- really, a lot of things here. we're approaching the top of the hour. before were go, here's what we're going to watch for the rest of the day. for me, it's alphabet on the micro side of things. i want to so this copy of tech giant and what it does for this particular, report coming out. it was a big outperformer every 0 the last year or so. we'll see if this company can actually overtake apple in terms of its market cap. it just needs about $20 million.

>> that would be something which overtook exxon several years ago. what i'm going to be watching is the familiar haunts of the markets these days. that would be china and oil. weak chinese manufacturing overnature. it's hurting commodities. it's hurting the pricing of oil and oil has been dictating stocks. oil rallied in the last weeks. >> that trading relationship between that and stocks and oil and everything else. >> we're going to be watching futures. pretty much on the move. down 100 for the entire portion of "worldwide exchange." down 88. a little bit of improvement there as they have tracked the pricing of oil. we asked you on twitter if you think february is going to be a better month for the bulls than january. thanks for the vote so far. 56% of you say yes. better. >> yes. >> february than january. >> optimism. >> 28% say no. and 16% stay the same. a little bit of a sentiment barometer. keep the votes coming we usually get a lot after "worldwide exchange." we'll share it.

>> that's does it here. next up is "squawk box." thanks for joining us on "worldwide exchange." "squawk box" is coming up next. . born with a hunger to fly and a passion to build something better. and what an amazing time it's 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. ♪

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good morning, wall street bulls saying good riddance to january today. although, the last trading day 6 january goes, so goes the year. maybe. up almost 500 points on friday. did you forget already? overall the worst beginning for the year after u.s. stocks in at least seven years. breaking overnight. factory activity in china, dropping to a three-year low. the data took a toll on chinese stock, not even 2%. >>. and presidential candidates making a final push in iowa. is anybody else glad we're

finally going to get actual votes. becky will see what's going to happen. we'll get a live report straight ahead. tomorrow is groundhog day. today is not. february 1st. "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." ♪ good morning, everybody. and welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. there is new data out of china showing the country's factory sector contracted for the sixth straight month in january. pmi coming in 49.4 that is slightly lower than what had been expected. most of the other indexes across asia finishing higher. nikkei up 2%. still getting a boost from the boj decision on friday to adopt those negative rates. u.s. equity futures at this hour