global market alert. volatility is back with stocks selling off in europe following a friday route on wall street. and u.s. equity futures are pointing to lower numbers again today. and hillary clinton abruptly left a public event early and her doctor says she's being treated for pneumonia. and a huge weekend for sports. we'll bring you the highlights including the tom bradiless patriots defeating the cardinals in sunday nights football. it's monday, september 12, 2016. "worldwide exchange" begins right now.

good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. a very good morning from me as well. sara, do you like to hang out with me or the nba's mvp? >> as much as i missed you, sitting with steph curry -- >> you haven't finished it yet. >> a little bit better. for this market, there's no one i would rather be with than you to talk about it. especially after the action on friday. >> a small win but i'll take it. >> you know i missed you. we'll look at futures. the selling is continuing after the brutal session on friday that put a halt to the summer calm. 2% decline for the major averages. and futures are lower by a large amount again this morning. dow futures down 134. s&p futures down 17. nasdaq futures down 45. this follows overseas selling in

reaction to what we saw on wall street on friday. let's just show you the percentage change in futures this morning for a change just to show you how dramatic the selling has been after 43 days of no plus or minus moves of 1% for the major averages. that was broken on friday with a 2% decline. here we go again with dow futures down .75%, almost a full percent. >> it picked up on thursday. the ecb didn't seize and the rhetoric suggested they would move forward. that started to hurt things. then on friday we started to get, after a week of interest rates pushed higher, we have a day of people bringing them back in for various reasons. during "worldwide exchange" we were flat and then it got going as the markets showed just how quickly sentiment can change with new highs without clear reasons for it.

suddenly people start to make sales and there were big sales. >> and the mix people are watching, the volatility with fears spiking. we are looking at levels on the chart back to june around brexit time when the markets threw a tantrum after the brexit vote went the opposite vote as expected. and the ten-year treasury note, the highest yield since june. yields are jumping from germany to the u.k. and japan. that is causing some of the unease. the idea of the great big bond rally that defined the post-crisis trading is finally coming to an end. we have been here before where we have said this and seen the yields jump. it's been spooky. it's now the time with central banks moving to the back burner. >> at the time we have very low yields in historical perspective, but the direction is changing and that is worrying people. the european equities are playing catch-up following the route on wall street on friday. we're looking at 2% declines for

germany and france and italy and spain. the ftse 100 down 1.65% itself. i would say there's one important sector differentiation to point out. banks were the best performer on friday because the sell-off was predicated on higher rates. they were still down sharply but the best performer in europe because the interest outlook is so poor, even though it's off the back of the fed rate hike discussion. banks are also down sharply. the biggest decliner, then banks that can't get a break whichever way things move in europe. we have yields moving up. we are in positive territory on the ten-year bond. we move in positive territory last week and the yield today is the highest since the june brexit. >> all the way up to .04%. >> very, very attractive yield that you can get there in germany. if we look at asia, similar moves, similar declines. in fact, a little more pronounced for one of two of the

markets as you can see hong kong down over 3%. japan down 1.7%. and again, bond yields ticking up there as well. japanese ten-year almost back to positive territory but not quite. of course, it is, in fact, just ticked in -- no, negative 0.16%. >> that's been leading the way on the yield. the nikkei had the lowest close since august 26. that stronger japanese yen really hurting the japanese stock market. also hong kong, i would mention, because i was there last week and i got the chance to host "squawk asia" with my friend bernie low, as that stock market hit the lowest level in 13 months, that really took a spill overnight with all the stocks in the hang seng lower. >> down 3%. >> as for the broader markets, we'll go across asset because you are seeing the pain felt in the oil market as well. the dollar strengthened on friday and that's been weighing on oil.

the wti at 45. you are seeing the japanese yen strengthen by a half a percent, so that is clearly an indication of the concern. but the euro is strong and the pound is strong. >> yeah. >> which is opposite to what we saw on friday. >> i think that is worth refocusing. last week we saw the dollar stronger because people brought rate hike expectations forward. but the story of the week as a whole last week was pushing them back after the whole jobs number two fridays ago with the disappointing im data people were pushing out. over the week as a whole the dollar was weaker. stronger on friday. all eyes will be there on the speech we weren't expecting. >> she's a governor, she's a voting member and known as an ultra dove. if she changes her tune, then really the markets need to refocus on the interest rate hike. quickly we'll show you gold, gold has sold off sharply. the idea of the prospect of

higher interest rates makes gold less attractive. it doesn't have a yield. gold isn't moving this much this morning, but it did take a spill on friday. and whether it's the fed, wilfr wilfred, or global central banks is more the story right now. because when you look at fed expectations, i came back last week and checked, september still does not show the 35% chance of the fed increase. we are talking about next week's meeting on wednesday and thursday. this is nothing new. we have talked about an interest rate on the table. it feels like we have seen yields tick up in europe and the u.k. where the expectation is to go in more with qe and bond-buying stimulus. that seems to interrupt the market. >> although friday itself was definitely related to fed rate expectations. you look at japan and europe, that's the question, can they do anything if they want to? the uk can still cut it further

with their own central bank meeting, the bang of england -- bank of england will meet this week. after the impact of fed speak, they are paying attention to everything the policymakers say today. ahead of next week's fomc meeting, the president urged that it is not urgent for the bank to raise interest rates. he didn't say they should hike in september, however. neel kashkari says that it's immigration and tax reform key to solving the slow growth. kashkari will be on "squawk box" at 8:00 eastern on what monetary

policy can and cannot do. >> one not to miss. it's a "squawk" interview that can move markets while it's happening. scaling back the inspections for the economy, in a new survey out, the economy will continue to grow for the next two years but not by as much as thought. there are expectations for business investment. the majority of those surveyed say they don't see the u.s. economy peaking until 2018. there's a fair amount of economic data on the agenda this week. on wednesday lookout for the august import prices. thursday we'll get august retail sales and the producer price index. industrial production and the september philly fed survey. and then on friday it is august cpi, that's the key consumer price index and consumer sentiment also on friday. keep an eye on the economic data that feels like the market is watching the fed speak even closer at this point, especially last week which you mentioned disappointing imf manufacturing

and services and the weaker jobs report. and yet the odds of a rate hike move up, but with the fed here in the period, maybe the economic data will take a front page. >> you're right. but i think today there's no data that fed speak will affect. and hillary clinton has been diagnosed from pneumonia. that note was put out by her doctor yesterday after she left abruptly from the 9/11 memorial service. she appeared unsteady and the campaign said she was overheated. the clinton spokesperson said she will remain at her home to rest canceling a planned trip to california today. clinton was diagnosed with pneumonia on friday which started with a cough related to allergies. more on the race for the white house in a few minutes time. also, the papers are filled with this, the front pages, this is back on the agenda. today's corporate news, tesla is

changing the way the autopilot works following a fatal crash in may. the ceo advised that the car's semiautomatic autonomous mode will use safeguards to keep drivers engaged in high speeds. all the updates will be rolling out in the next two weeks. they say the changes may have prevented the deadly crash in may. they will also explain that perfection is impossible. listen. >> there won't ever be zero fatalities or zero injuries. you know, the world is a very big place and there's a huge number of people and a huge number of circumstances. so it's really just about minimizing the probability of injury, the probability of de h death, not sort of the illusion of perfect safety. >> quickly, we'll show you the

pre-market tesla shares under the pressure of the tune of 1%. and hp may agree to buy samsung's printer business in efforts to expand printer business. the deal is subject to regulatory approval. after the deal is completed, samsung agreed to make an equity investment of $300 million in hp through open market. hp inc slipping 1% in the free market. bridgewater is the largest hedgefund manager attracting $22.5 billion in new funds to new money for the first time in seven years, this is according to reports. this is a rare inflow in the industry that suffered from poor performance recently. most of the money went into a new optimal fund started in 2015. while the remainder went into the firm's macro hedge fund pure alpha and a programming note on that, don't miss the blockbuster lineup tomorrow at the alpha

delivering conference. the summit is produced by cnbc and the institutional investors include treasury jack lew, carl icahn and more. over the last few years, it seems like all we talk about is the poor performance and the outflows. >> i couldn't agree more. but it is interesting we have had the big sell-off and spike in relatively the day before we have the experts to shed light on it. >> absolutely. when we come back, much more on the morning's market global sell-off. we are watching it for you as we begin with the week with volatility. check out the casualties of the home builders xhb index having the worst day in about three years on friday. it was one of the hardest hit. we'll be watching that at the open. >> and not the only thing that stalled out on friday, a lot of things did. the facebook and twitter question today, we want to know how much further does this sell-off have to go? weigh in and we'll bring you the

results later as we continue the coverage here on "worldwide exchange". hhh... but with added touches you can't get everywhere else, like claim free rewards... or safe driving bonus checks. even a claim satisfaction guaranteeeeeeeeeee! in means protection plus unique extras only from an expert allstate agent. it's good to be in, good hands.

good morning. welcome back to "worldwide exchange." let's get you up to speed on the market sell-off. the big market sell-off 2.5% on friday is expected to stay open to the tune of half a percent. we found a little bit of emphasis in the last hour with futures down as much as .75%.

we are now looking at half a percent of declines with the dow just shy of 100 points as it's expected to open down. we look at declines around the rest of the world. the markets are playing catch-up to friday's sell-off on wall street. again, we have improved a little bit up more than 2%. germany and france just shy of that. the biggest decliners over there, the basic materials, also banks. banks were relative to outperformers on friday. and wall street because of rate expectation, we're not expecting to see rate hikes in europe. banks are still suffering significantly. asian trade negative. hong kong which has been on a tear recently suffering the most of over 3%. all of the company on that index are in the red today, were in the red as we closed, down some 3%. japan and shanghai doing better down some 2%. a quick look at oil prices that managed to be positive for the week as a whole. the energy was the best performing sector finishing the week up 3.5%.

friday down 3.5% to sum up the turn-around in market sentiment we saw toward the end of the week. and 100 ship containers stranded for more than a week off the coast of southern california have finally unloaded their cargo on saturday. it was one of four ships blocked from entering or leaving the port of long beach after hanjin filed for bankruptcicy and creditors refused financial said. on friday the bankruptcy judge offered hanjin protection in the u.s. the ship was carrying electronics, furniture and plastic goods. still to come, decision 2016. new questions about hillary clinton's health today after she abruptly leaves a public event early and her doctor say she's being treated for pneumonia. but, before we head to break, here's today's national weather forecast from the weather channel's jen carfagno. >> good monday morning, sara and wilfred. it's finally feeling like september in the northeast.

we have temperatures down, dew points down, and that means the humidity has been scoured out of the area. we'll show you the front coming through, much, much better here. the front is stuck in the south to mean a couple showers and storms. there could be a couple thunderstorms today to pack the punch across the high plains. a few spots to watch. very windy in denver with big temperature changes. 90 yesterday. the 40s coming in the days ahead. typical denver in september. in the west, nice temperatures in seattle hitting the mid-70s again today. in the middle of the country, we do still have the heat hitting 90-plus in places like dallas. that's your coast-to-coast forecast. i'm jen carfagno. "worldwide exchange" continues after this.

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welcome back to "worldwide exchange." we'll get you up to speed on market action, summer is over and volatility is back after a brutal session on friday. the selling continues this morning. the u.s. equity futures pointing sharply lower. dow futures down 120 in the early action. the s&p futures down 15. the nasdaq futures down 40. nearly a full percent annuage p. a lot of selling off in bonds as well with yields pointing higher. the ten-year treasury notes hovering just below 170 -- 1.70.

this is on the back of the stronger u.s. dollar. wti 45.20. brent at 47.40 down 1.3%. wilfred? thank you. we'll move on to politics. hillary clinton's health is becoming a real issue in the presidential campaign. meanwhile, donald trump is catching up in the polls. nbc's tracie potts joins us with all the latest. good morning. >> reporter: good morning, wilfred. they are actually deadlocked in four battleground states. but the big news this morning, hillary clinton recovering and resting at home in chappaqua, new york, canceling campaign events after a health square was caught on video. this video of hillary clinton leaving the 9/11 memorial clearly unstable in needing assistance is raising questions. her doctor says she got overheated and dehydrated two days after being diagnosed with pneumonia. congressman joe crowley was standing right behind clinton. >> it was hot and stifling. people very tight, inches from

each other. >> reporter: clinton later e merged. >> it's a beautiful day in new york. >> seemingly better after resting at her daughter chelsea's apartment. >> are you feeling better? >> yes, thank you very much. >> reporter: but she canceled two days of campaign events in california. she's had health issues before. a coughing fit last week that her doctor attributed to allergies. in 2012 she also became hydrated, fainted, got a concussion and had a second blood clot. donald trump just questioned her st stamina, but little is known about his health history. now the reason this is such a big issue is because trump is 70, childrenton will be 69. neither of them have released their full medical records. in the meantime, as we continue to watch the polls, donald trump has become competitive with hillary clinton. and she's become competitive with him in states that are

traditionally red or blue. so right now the polling is showing in arizona, georgia, nevada and new hampshire, they are pretty much neck-and-neck. >> i think the bigger deal is she's going to have to cancel campaign trips and events in light of the polls tightening up, right? >> reporter: yeah, two fund-raisers in california, actually, three, were supposed to take place over the next two days on monday and tuesday. all of them are canceled. on wednesday, we don't know her schedule. they are probably still evaluating, but monday and tuesday are out. >> tracie, in terms of wild card factors that could derail their campaigns, how big is her issue of health? is it up there alongside the e-mail scandal? >> reporter: i don't know about that. certainly because it is in context of a previous health issue that is getting a lot more attention. if it's pneumonia and bacterial and gets over it and seems fine, you know, a month and a half from now, is it going to affect the polls? i don't know. not necessarily.

people obviously get sick. obviously, they both had grueling schedules. but the fact that they didn't reveal it initially is probably what is fueling some of this. and certainly what the trump campaign has to say about it and how much leverage they try to get out of this or how long they continue to make it an issue could make it more of a problem for her. >> so far nothing from trump. he was actually at the 9/11 memorial yesterday and just tweeting about that. tracie potts, thank you very much, from washington this morning. >> either way, we wish her a speedy recovery. now to sports, the first sunday of the 2016 nfl season is in the books. the sunday night match-up on nbc, the new england patriots versus the arizona cardinals. the patriots playing without tom brady who is suspended for the first four games. his replacement filled in well striking for a long touchdown pass. the cardinals had a chance to win but the kicker missed the

field goal kick. the pats win 23-21. football is back, which means in my household, nothing gets done. >> football is back, the stock is back, lots to watch over the weekend. still to come, more market discussion here including top stories and some of the volatility in equities selling off and yields picking up around the world. the facebook and twitter question, how much further does this sell-off have to go? get in touch with us. much more discussion coming here on cnbc. it's a very specific moment, the launch window. we have to be very precise.

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good morning. volatility is back with a vengeance. stocks selling up around the world. more straight ahead. and tesla unveiling a software update for the autopilot feature. we'll hear from the ceo elon musk coming up. and top trending stories, why a bunch of fantasy football fans were not happy the first day of the season. it's monday, september 12, 2016. you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost. a significant sell-off on friday around 2.5%. meaning the week as a whole were pretty much flat going into friday's session. that changed significantly.

we are expected to open lower today by around 125 points for the dow. we have been yo-yoing around the 100-point level the last couple hours and are below at the moment. the s&p is down 16 points. the nasdaq by 43. so it's about 0.6%, 0.7% expected at the open. the ten-year treasury note, we have seen the yields pick up on friday quite significantly. close to 1.7%. of course, that came as the rate hike expectations moved forward on friday. the week as a whole saw a move the other way. friday we saw a significant turnaround with focus on fed speak later today. the european boards are significantly lower around 2% for germany and france. the ftse 100 better down 1.5% playing catch-up following friday's session on wall street. asia playing catch-up, but more strongly when you look at the hong kong market on a tear recently, up 3.3%. and almost 2% declines for japan and shanghai as well.

>> as for the broader markets, the oil sell-off continues. we saw this on friday as well on the back of a stronger dollar. wti still hovers about 45.12. down 1.6%. that sell-off has been picking up steam over the last half hour or so. brent is at 47.30 down 1.5%. the dollar interestingly is calmer this morning than we saw on friday where they were buying the dollar on the idea that rates were moving higher many the u.s., higher yields, stronger dollar. you are seeing that a bit, actually, that is flipped around on the euro this morning. we'll keep an eye on it. 1.12 there for the euro. 102.14 there for the yen. and the pound turning weaker to 1.32. as for gold, it sold off sharply on friday with the idea of higher interest rates not too good for gold which doesn't yield anything. so it's selling off flat this

morning down $3. that's a big question, wilfred, whether it's the fed raising interest rates, and we got that jolt from the boston fed president who is traditionally a dove. he's one in no immediate for interest rate hikes firmly changing his view. and that woke up markets to the prospect of, hey, this might be coming and might just not be a u.s. phenomenon without the promise of the qe. is this the end of the massive qe extravaganza that we have been seeing? >> they are not expecting to see interest rates ease significantly after easing in august. but last week the data suggested we won't get a hike. then on friday the fed speaker really changed it. it was not just rosengren, but the coming speech this monday

just made everyone freak out and think, this is an uber dub that has to speak to warn people ahead of the fed speak. >> i just wonder if there's too much emphasis on fed speak. you have to remember when they speak, maybe the governor is different, she's part of the core inner circle, always a voting member, they could be lobbying themselves for their own opinions. i mean, the fed chairman, janet yellen, is who matters. the last time we heard from her, she said the case for raising interest rates is strength anything. she did not give a timetable and the market is still not expecting september. it would come as a big surprise, but the fed fund future is pricing it at 30%. december firmly being price matched. >> if we did see a hike next week, on that note, the three speakers today to focus on dennis lockhart is at 8:05 eastern time. then he takes question from the media as well. at 1:00 p.m. eastern neel

kashkari will take about the u.s. economy. and the speech everyone is talking about, lael brainard at 1:00 p.m. eastern. and elon musk is announcing plans to approve the autopilot system for tesla. >> ceo elon musk says the update will be delivered to vehicles over the air and affect tesla cars built since october 2014. and in the update, the autopilot feature depends on radar signal more than cameras to help guide the vehicles along roadways and add safeguards to keep drivers engaged at high speed. musk says the safeguard warnings may have prevented the accident earlier this year when the car failed to brake automatically because the system couldn't distinguish a truck's white

trailer. the radar would have detected the trailer, but we'll keep in mind that autopilot will never be perfect. >> i do want to emphasize this does not mean perfect safety. this is by no means, perfect safety is really an impossible goal. it's really about improving the probability of safety. that's the only thing that is really ever possible. >> while musk upped his bets on radar technology to navigate the world, google and others are counting on technology to use lasers. musk says he doesn't plan to use this technology, but it does have the same capability of radar. shares are down 14% over the last month. back over to you. in other headlines this morning, gasoline prices rising 4 cents a gallon in the last three weeks due to a nationwide

average of $2.21 a gallon. this is still 3 cents lower than it was a year ago, but clearly creeping back up as we have seen with the price of oil. and more stocks to watch today, samsung losing $14 billion in market cap today alone with shares falling to the lowest level in two months after the company told customers to switch off and return galaxy note 7 smartphones as the battery can catch fire. it's a story that has been continuing, but a big further step-down in the share prices, a 7% move for samsung. certainly relative success of the two launches we have seen. the win goes to apple even though slightly disappointed, not as bad as samsung. >> how about that timing? and sanofi and alphabet are going to join to work on

diabetes together to the tune of $500 million. and time for top trending stories. you know how we love to bring you the viral video alerts. here's one, michael phelps taking the stage for a lip sync battle, the first ever live show. he's performing eminem's "lose yourself." complete with a graffiti background and black hoodie, take a look. >> this is live? >> he looks like eminem. >> that is so cool. i'm so impressed. he was already cool. >> but later in the show it got better as simone biles and aly

raisman surprised phelps taking to the stage to perform to "cheap thrills." >> outstanding. i love it. kudos to them as well. that's a completely different skill from their olympian sport. >> but there were some moves there as well. moving on, the next trending story, miss arkansas taking the crown at last night's miss america pageant. she won over the 52 competitors. she claims the title after winning with a jazz dance. congratulations to her. >> that brings me back to my childhood. i watched every miss america -- oh, i just loved watching it. >> it would be too easy for you to compete. many fantasy football players were not happy yesterday as it crashed the first sunday of the nfl season. the outage started at 1:00 p.m.

eastern when the games kicked off and left millions of users in the dark until 7:00 p.m. eastern. even claire mccaskill took to twitter to air her feelings about it. seriously, espn fantasy? this is opening day. #fail. it shows you how important fantasy has become. it's a bigger deal than watching the football game themselves. >> yeah, bad timing. #fail for me. amazon and pandora set to launch new streaming services. both companies looking to charge as little as $5 a month. "the new york times" reporting pandora's new service mailer will skip more songs toer store several hours of a playlist. samsung will offer the new option for those who own the amazon echo speaker system. another tie-in they are able to offer. when we come back, much more on the market global sell-off. plus, today's must-reads. but first, do not miss our

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welcome back to "worldwide exchange." the market action is ugly again after friday's worst day since june 24th, that was the day after brexit.

the selling continues with dow futures down about 121. the s&p futures down 15.5. and the nasdaq futures down 43. we are also seeing yields move higher around the globe, especially the ten-year hovering right now just below 1.70. we don't get economic data but a trifecta of fed speakers. the market worries about the market increases and this is the last day they can speak before the quiet period before the meeting next week with the odds of a september rate hike moving up, but still not past 50%. so that would come as a surprise. absolutely. the markets in the red today again. we'll go to the must-read stories catching our attention. my pick is "the financial times." larry summer is summarizing why he thinks it would be a great idea, covering the five key questions in terms of how it should be delivered and where it

should be delivered and well worth a read on that. but the real conclusion is however the election turns out, this is his words, a major infrastructure investment program should be adopted by the president in congress in the spring of 2017. and going into this election, it really isn't a debate between the two political sides of whether the government should be spending on this or not. it's almost unanimous opinion from both candidates and various comments there needs to be significant infrastructure investment. i mean -- >> and is a real change from the last election. >> given that donald trump says he wants to spend more. it's kind of an issue we have consensus on and lots of economists believe it should be delivered. and this larry summers attributes his view. >> my pick is "the washington post"." everyone is talking about it, hillary's health that just became a real issue in the presidential campaign. the reason i picked this is because everyone on twitter is pointing, especially to this

one. this is chris cilizza saying, quote, clinton and her campaign could laugh off questions about her health before today. the "overheating" episode makes it almost impossible. not only has it come at a time when there was growing chatter that her health was a problem but it also happened at a 9/11 memorial event, an incredibly high-profile moment with lots and lots of cameras and reporters around. he's a writer that a lot of people follow. he had just written that the coughing fit was much to do about nothing, it was not a real issue, it signaled nothing. now it's at the top of the agenda. whether she wants it or not, her campaign has to talk about it and she has to address it. it is unclear how long she'll be on the sidelines not able to campaign. she has to cancel events in california. >> so far donald trump quite quiet about this. although we've heard before, rudy giuliani and supporters

bring it up. we're approaching the top of the hour meaning the team is getting ready for "squawk box." i have a feeling joe kernan is following the issue this morning. >> chris clizza said, was he including himself as part of the clinton campaign or separating himself? guess who we have on, this is so exciting, sara. i know that -- i don't know, are you sitting down? >> we are sitting down. >> richard williams and ronnie plattes. both on today at 6:50.

if it is not the british invasion for you, wilfred, we haven't had a good rock person since elvis presley according to you. i remember there was a homer simpson episode that said, okay, so, you've got the beetles, we have the rolling stones. everybody came. i mean, led zepplin, pink floyd, it's tough to do with what you have sent over here. >> you have taylor swift, joe. >> you know what? you're working it. i like that. >> taylor swift, kanye west, we have all the great ones. >> oh. >> joe, i thought you were in a good mood because didn't the bengals win yesterday? >> i don't follow the bengals. i may have seen some of it as a jets person out of the corner of my life. i may have seen it down to the last second with the intersection. we have kashkari on. which is weird. he's an old friend of the show and now he's -- not because of

"squawk box," but he has become something large and it's a great guest to have on. not just because he was on "squawk box" a lot, but he's outspoken about a lot of stuff. considering he was there for -- with hank paulson during those days. and now his view on the banks i'm sure we'll touch on. i'm sure sorkin wishes he was here. he loves to talk about that. but carry on, my wayward children, carry on this morning. >> very good. >> joe, thank you very much. we look forward to "squawk box" in 11 minutes. >> no, wilfred, thank you. >> we'll take it. when we come back, continuing coverage of the global market sell-off. we'll talk to chad morganlander to get you ready for the week ahead. and still to come, an exclusive interview on "squawk on the street" at 10:00 a.m. with jes staley.

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welcome back to "worldwide exchange." we'll show you what is happening with u.s. equity futures continuing the sell-off after the worst day on friday for u.s. stocks since june 24th. stocks are down 132 points. and joining us to discuss what is next, chad morganlander. two days does not a trend make, but certainly the sell-off is picking up steam. it's broadbased and it's finally broken this very long lull of summer calm. what do you make of it? >> well, you had a signaling from the federal reserve as well as the time to hedge a bit over time. you have seen themry adjust on a global basis up and down the spectrum. >> is this a big one? every time we see this we wonder, is this the end of the great bull market and the bonds? are central banks finally out of the market? is that what is happening or is

this just another fake-out? >> i want to make it clear we are in a bond bubble. there's no surprise there. yields are the lowest in 5,000 years, correct. is this the big one? i don't believe this to be the case and believe the big banks into back into tof the system. the federal reserve raises rates in december, not september, that's off the table. and the ecb will be back in the market. no doubt about that. we believe that will occur over the next six months. >> do you think friday's move cemented your view that we're not going to get anything in september? that the fed will look to that and say we're setting up prices, we must not take that risk? >> 100%. their focus on the global basis, that's a third mandate no one wants to talk about. >> or are they going to look at it and say, we need to teach the

markets a lesson. enough is enough. we are not going to be dictated by every sell-off in the s&p. >> i don't think that's going to occur. they are critical with a mandate to lower volatility, bring spreads in on the credit system and make sure the financial system doesn't have this unhinging. did they scotch the market by signaling potentially a december rate hike? yes. but let's just be very clear about this. our terminal rate, our group leads the terminal rate on the fund fund, that's 1.5%. we are well below expectations there based off of the fact that we don't think the u.s. economy has hit escaped velocity at this jungture. >> apart from friday over the summer all the talk from fed speak hasn't moved the market a lot, but it has moved a massive amount of sector performance. how do you position for the rest of the year based on the latest expectations? >> we would move up the quality spectrum and debalance in one portfolio. when you get down to the u.s.

sectors where you think that you can create alpha, we would overweight the health care industry. also overweight the financial industry at this jungture. we believe that is the key contributing beneficiary of a rising interest rate market over a temporary basis. >> so what do you do with the defensive stocks which bore the brunt of the selling on friday? utilities, the phone companies, the telecom, even consumer staples? >> we wouldn't advise investors with the heavily weighted and high-wielding equities at this juncture. we would involve more to the rising dividend of a component of the portfolio. look at companies like dr. pepper, for example, as well as other consumer staples that have been growing profitable and are well capitalized. >> and looking around the rest of the world, is there a level of concern that people in the u.s. should have about the fact that we didn't get more easing

from the ecb with the bond yields ticking up across europe and japan. is that something to be aware of or like you said earlier from the u.s. bond market, not something to derail from the bond market significantly? >> i don't think it will derail significantly. the system is going to ebb and flow based off the signal from the ecb as well as global central banks. at this juncture, they are taking a little bit off the fervor and will come back in. over the course of again the next six months. but we would not become overly pessimistic about the equity markets at this juncture. we think there's a long-term forecast in return on u.s. equities over the next 5%. >> chad morganlander, thank you. do you think this market sell-off has further to go? the results are here, 44% said it has 5% further to go.

32% at 10%. 24% of you say it's already time to bounce back. thank you for watching.

good morning. global market alert. people would say, wow, we want some volatility. well, you got it on friday. it's back. selling off to date in asia and europe following what happened on wall street on friday. and u.s. equity futures point to more losses today. is the bull market just dust in the wind? you see what i mean in a moment. we have kansas on, i wish it was indiana or minnesota, but anyway, if we're going to have a state on, yes, news from the

campaign trail canceling events after a diagnosis the campaign tells us of pneumonia. and it says she had a medical episode yesterday. plus, a huge weekend for sports. we'll bring you the highlights including the tom bradiless patriots defeating the cardinals barely in sunday night football. it's monday, september 12, 2016. and "squawk box" begins right now. ♪ >> 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 kernan. we're playing the band kansas because we have the musical guest kicking off their 40th anniversary tour. more on that