global markets in meltdown mode the dow posting its single biggest loss in history. right now we are pointing to another big plunge on the market it's tuesday, february 6, 2018, "worldwide exchange" begins right now. >> this is cnbc breaking news, market selloff good morning a warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost, straight to the markets. we were down 4.6% for the dow

yesterday. the nasdaq down less than 4% wiping out all of this year's gains for the dow, the s&p and the nasdaq just holding on to positive territory it won't be if this is anything to go by at the open we are down 434 points for the dow. the s&p is down 28 the nasdaq down 23 points. we have higher volume yesterday. 8.6 billion shares raided. 50-day moving average 5.7. we saw vix spike very much at the end of the session so every everiedy kate y edindi risk off indicator let's look at the ten-year treasury note. rising yields over the coarurseo the move has been a spark for this selloff we saw yields come back a bit yesterday, right at the end of that chart 2.85% or so at the peak last

week the trend in yields is sill intact rising yields over the course of this year. the trend in equities is no longer intact. we have pulled back away from those highs. full team coverage of this global market selloff. dominic chu is with us in the u.s., steve sedgwick is in london let's go to nancy hungerford live in singapore. nancy? >> hi. a lot of attention around the nikkei 225 today, closing lower by 4.7%. this is coming off the lows of the session we saw the nikkei 225 down more than 6%. still the tokyo market was sharply lower. that's the worst percentage drop since the election and the worst point drop since tbrexit other key milestones it was the worst drop for the shanghai

composite for two years. look at the hang seng here off 5% this is still positive on the year tencent, the tech hch heavyweigt dropping 7% on the session still plenty of selling pressure here back to you for now. >> thank you very much for that. early action in europe steve sedgwick is live in london for us steve? >> what is interesting about the european session, we're in the best position, ie where were where asia was, which was absorbing full declines before the turnaround the two-day decline on european indices at the moment is modest compared to elsewhere. the ftse 100 yesterday lost around 1.5%. we lost 1.9% so far today. so a cumulative 3.4%, which is mild by comparison to markets

we're seeing stateside and in asia we must take a step back and say at one point the ftse was down to 6950 in today's premarket session. but rallied aggressively, a full 250 points as well so as we see the turnaround in the u.s., waiting for the u.s. market open, the market decline net-net has been relatively modest the dax, it was down around 4% at its peak losses today but rallied aggressively we were talking with nancy about the pre-brexit move. the german market is still up around 22% since brexit. that puts a few of these markets in context yes, we're seeing selloff but it's nowhere near as bad as in asia and the united states >> thank you very much for that. let's round things out here in the u.s. dominic chu is with me on set in terms of the main takeaways from yesterday. >> as we talk about the markets in the u.s., they are the ones who have taken the brunt of the force. they're arguably the driving

force behind what's happening globally if you look at what's happening with the dow, the biggest percentage losers, you look at stocks, you say exxonmobil, chevron, the energy trade has been hot of late, as oil prices pull back, exxon and chevron have btri driven them lower also dow dupont another laggard. the dow was a price weighted index. if you look at a price basis, united health shaving the most points, then 3m and home depot and caterpillar. they are in the mode of take points off the dow looking at the s&p 500, about 75 stocks have fallen by at least 10%, just since january 26th some people will call it correction territory we'll say they have fallen by that amount in that amount of time you look at the s&p 500, the energy trade playing out

hess and chesapeake energy some big decliners. metlife and tractor supply also in the mix if we look at how the stock markets are shaping up in the u.s., one thing to keep in mind, we mentioned that 75 stocks in the s&p have fallen by 10% since the 26th ryan dietrich notes we have gone 404 days without a 5% pullback from record highs. that streak was broken yesterday as well. >> while we have been talking, futures now down 570 points or so on the dow. 572 or so. the nasdaq down 52 s&p 42 the course of the overnight action has been one of recovery in european markets. in the last 15 minutes things are picking up again if we look back at european markets, germany down 2.5%. ftse 100 down 2% just the last half hour more

selling. we will broaden out this conversation tim seymour of triogem asset management joins us. yesterday afternoon the other massive move we saw was in volatility >> right >> talk us through your expectation of that and what it means. >> yeah. you think about what's happened since friday, where you had a lot of this systemic strategies, starting to really push the market around. systemic selling kept many investors on the sidelines also a self-feeding process. for a lot of folks, this is referred to high frequency traders, algos, whatever you want to call this, this is a process which has significant ramifications across asset classes. in terms of how folks are approaching risk and how a lot of professional risk are approaching risk, i think a lot

of the tra digditional players e these risk parity strategies are ones that will continue to dominate the market over the next week or so. the expectation of a quick turnarou turnaround, i think even though we get into the fundamental story, that's being hampered by what we came the systemic risk strategies >> so tim brings up an interesting point. this is what traders i've been speaking to have been talking about. the idea that the consensus trade for a long time has been to bet on low volatility there's a way to make money betting on low volatility. it's been a consensus trade for a while. the problem is when that unri

unwinds, you feel some people are unwinding bets, trying to make money by generating income and selling volatility perhaps that's a reason why the drivers have been limited to the stock market overall we have not seen the ripple effect elsewhere tim, my question is wlofrhether not that volatility picture plays out in a day or two or three, or whether this is a trade that needs more time to unwind >> i sense that you get -- you often will get a nice bounce after the type of move we have had. don't underestimate the impact that you could get from some type of a policy response at this point i don't think you will see the changes in real life and vols be eradicated over the next couple of days. it's almost impossible that's one reason why.

the fundamental story in the market a week ago seemed so extraordinary. while you can point to a handful of things, we are seeing higher volatility into friday's payroll number that changed the story we have a friend who has written a note, his point is well taken. friday's move on its own was significant pushing up vol, but it was a signal for these volatile star getting strtargeti the u.s. you have extreme divergence between the fundamentals and technical picture, i'm not sure market participants need to jump in, they'll get into a layer of where we went into this entire event where market complacency, i think, was running high. that's almost glib to say after the move we've seen cle

clearly people have been caught offguard, but everybody expected we needed pullback a lot of players believe this is a market to buy the dip quickly. that's something even though there's huge opportunities out there, i think the next couple days could be rocky. >> we're now down more than 600 points on the dow, back to 596, continuing this slightly negative momentum. quickly on the technical points, all of these markets moved below the 50-day moving average. how significant is that for what you talk about about the short-term momentum continuing to the down side >> well, it's extraordinary if you think about it and if you think about where we went from overbought to oversold if i look at a nine day measure

of market momentum of the s&p through yesterday's close, we were trading at a 20 nine-day rsi, which is something we have not seen in a couple years if you look at the eem etf, your proxy, you went from friday of last week being the most overbought since 2014. and now in a measure of six trading sessions, you're now the lowest rsi in two years. the technical position changed dramatically we're at -- let's see how we trade into this session. i think this is important. you see some of those sessions are able to decline. the 100-day, the more medium term indicator, that's important for a lot of these indices we watch today's session if you want to get into trader talk and how people would like

to view this as a nice, simple analog, which it's not let's wait and see how europe closes and see if we can have this turnaround tuesday action right now obviously i think it's a volatile situation >> tim, thank you very much for that thank you to dom chu we'll have more from dom during the show quickly, have a one-year chart of the s&p of course we must put into perspective massive selloff in terms of the two and three-day moves. relative to gains over the course of the last year. relative to the gains in chan, which was 5%, 6% of gains. that's one of the reasons valuations move. if it is interest rate driven, which people say clearly whilst the economy continues to be strong, companies continue to be strong, this suggests a valuation pullback, not a fundamental pullback very sharp selloff at the end of that chart, but people have had strong gains coming into this.

we are down sharply in the premarket. up next, the selloff goes global europe deep in the red at this hour headed back to london for the latest action there. they just increased their selling over the last 20 minutes or so. and another check of u.s. futures. 600 points nearly the decline on the dow. i0 points now lower on the dow. backn a couple of minutes. i'm . nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.

welcome back to "worldwide exchange." let's get you up to date with the market picture following those big declines yesterday. down 4.6% on the dow yesterday we're expected to open lower by 540 points on the dow. 38 on the s&p. 40 on the nasdaq that's a couple of percent for the dow. the s&p over a percent of a decline. the nasdaq is the best performer this morning in percentage terms. down less than 1%. let's look at europe, which opened down about 3% rallied back to being down about 1.5% it sits in between those levels. down about 2% this morning definitely not down as much as asian trade, which was playing catch up to the dow side with the u.s. we saw the nikkei close down over -- close to 5%. hong kong down over 5% we'll dive into all of this international picture when we come back and look at oil. major factor in the market slide. energy has been a sector that's

suffered over the last couple of sessions another check in on the u.s. futures board. down sharply this morning. 550 points on the dow. really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that the golden hour. evaluating patients remotely is where i think we have a potential to make a difference. (barry murrey) we would save a lot of lives if we could bring the doctor to the patient. verizon is racing to build the first and most powerful 5g network that will enable things like precision robotic surgery from thousands of miles away. as we get faster wireless connections, it'll be possible to be able to operate on a patient in a way that was just not possible before. when i move my hand, the robot on the other side will mimic the movement, with almost no delay. who knew a scalpel could work thousands of miles away? ♪

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asia down 4%, 5% for the japanese and hong kong markets joining us now is peter spiegel from "the financial times. one of the factors discussed yesterday stateside is markets sold off so severely was that the fundamental economic picture remains intact there hasn't been a spark on that side, the economic data side to cause the selloff. is that the same in europe would you say this is a momentum markets driven move as opposed to something out there, a red flag in the political, economic world? >> i think the dynamic is the same yes. the economic numbers in europe are still very strong. but i think the dynamic in the u.s. and in europe are the same in that we don't know whether this is a valuation move or a more fundamental move. both in the ecb and the bank of england, as with the fed, we have had almost a decade of free

money. there's cash pumped into companies for ten years to try to gin up economic growth. and suddenly the ecb is tightening that off. i think the question is is it just a short-term valuation move or are we moving from a world of free money to ra moa move of moe normal monetary policy, and if it is, are there company there's a overleverage, that did m&a deals at frothy levels credit suisse was off 7% because a lot of products they were seming were tsem i selling were tied up in the volatility short so the fundamentals are strong, but there's a lot of concern that there's bubbles built up over the last decade and people don't know where they are now. i wouldn't be so sure to call this a valuation shift in europe, the same underlying

cause here is a shift in monetary policy going back to normalization of rates that could cause an upheaval here >> credit suisse, a lot of focus on it, down 4.3% in terse of whether tms of whets likely to adjust its path based on what markets are doing, how likely is that european markets, ecb, they have done a version of this dance before, 2010 to 2012, when they made sure they will do whatever it takes to stop the markets falling out of bed do you think that's likely that if markets are selling off, mario draghi would assess his plan for the economy and adjust it to keep markets supported or not? >> i think that would be his instinct the problem is, unlike the fed, there's much more politics in europe than in the u.s. because of the german question germany overheating, they have a budget surplus

so the big engine of europe is pushing very, very hard on draghi to basically continue the path of tightening the rest of europe, which is much more concerned about the market pullback. next year draghi's term is over. the head off the bundesbank is set to take over it's very political now in europe and draghi's task is complicated. >> peter spiegel, thanks for joining us. energy has been a big factor as well over the course of the last couple weeks. the etf for energy down nearly 9% since friday. let's get to jackie deangelis with more on the slide in oil prices >> good morning. i want to put this in context. commodity prices themselves are not reacting as sharply to the market selloff as many expected. oil is holding under $65 a

barrel copper was up in yesterday's session. gold did not spike that dramatically either. the relative stability in commodities is telling us there's confidence in global growth and demand. copper is a widely used metric when it comes to appetite for global growth because of various industrial uses. it's up 2.5% in the last month going a step further, the energy stocks, earnings misses from exxon, chevron, hiss, they have been dragging the sector down. that drop in the xle was significant. chevron and exxon are numbers 14 and 20 on the dow. when they see losses of 5% multiple days in a row, it's an issue. for these companies, elevated oil prices in the fourth quarter alone, they were not enough to mend what was broken but still there is optimism that another quarter of higher crude prices, positive tax benefits and more time for rebalancing will pave the way for better earnings next quarter. yesterday's overall market

losses were significant. all bets will be off if the market decline stops being orderly. but for the moment the commodity market could offer insight into longer-term stability. watch those gold prices carefully too. >> jackie, thank you very much for that. up next, financials falling. the banks having their worst day since the brexit vote in june of 2016 an analyst's take on the move. as we head out, another check on futures. that the hour, down over 600 points for the dow 630 points the s&p is down 45 thnaaq ie sds down 50 points we're back in a couple minutes at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence.

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global markets in meltdown mode the dow posting its single biggest point drop in history yesterday. right now futures indicating a big plunge at the open. what should you be doing with your money it's tuesday, february 6, 2018 "worldwide exchange" continues this is cnbc breaking news, market selloff good morning a warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. it's another disappointing picture for markets this morning. yesterday that huge selloff, 4.6% on the dow. the s&p down more than 4% as well the nasdaq was down 4%

volume up, 8.6 billion shares traded the 50-day moving average is 5.7. volatility and the vix soared in the afternoon. we see markets year-to-date for the s&p and the dow below where they began the year. despite january's strong gains the nasdaq just higher futures suggesting that might turnaround we are sharply lower the dow off over 600 points. the s&p down nearly 2% in the premarket. nasdaq down a full percent or so but it is outperforming the others as it did slightly yesterday. clearly another big selloff here in the premarket one of the factors that people have been pointing to for sparking this selloff has been rising yields. yields have pulled back a little bit in the last couple of days you can see we got to 2.85% last week, we're at just below 2.7% it's important to note yields are still markedly higher for the year as a whole.

it can still be pointed to as a spark for the selloff. the trend in yields is one that's moved higher. the trend in equities is one that is moving lower for the year as opposed to the course of january which was higher markets around the rest of the world, asia playing catch up to the downside we saw over 5% of decline for hong kong. japan off almost 5% as well. shanghai down around 3.4%. europe opened down about 3%. it came back up to about 1.5% down it's somewhere in between that level. down in and around 2%. i point out that as we know with the big three indices in the u.s., all hong kong, japan, korea, germany, france, uk, all of them pulled below the 50-day moving average, a bearish technical signal some markets below the 200 moving day average as well even more bearish. if you like those technical signals and chart moves.

nasdaq futures turned positive early this morning befor heading back lower down about a percent at the moment let's get to bertha coombs with a look at tech-heavy index >> thank you very much the nasdaq composite gained more than 8% by late january when it hit that all-time high the index is still up for the year compared to its peers it is down 7.5% in the last six sessions after that historic high apple had not really been a lead driver in the run up in january. and after those earnings last week were noisy, apple started to break down technically. we started seeing bearish signs. yesterday was a factor in the decline. the stock breaking through technical support levels, plunging through the 200-day moving average in late trade and now down 13% from its recent all-time high. apple's concerns, concerns about what kind of chip supplies and

orders are going to be made in the wake of the last quarter have weighed on the semiconductor index. that's been a drag the chip index not quite in correction at this point but a number of big movers there. lam research is actually right around bear market territory a couple other stocks moving down, not just because of concerns of apple but amd and nvid nvidia, moving up on the back of bitcoin, a bit of a whammy there dragging those lower biotech, this is where we're seeing some of the worst technical bearish breakdown. the ibb, i looked and only about 10% not in correction or bear market territory in that index back to you. >> thank you very much for that. the nasdaq still just over a percent higher year-to-date before today, but the nasdaq futures are down a percent so like the s&p and the dow it may well break into negative territory for the year as a

whole. here's how yesterday's record drop played out. you're looking at a time lapse of the dow we nearly went positive early in the session before the bottom fell out at the lows the dow was down nearly 1600 points it rebounded to finish down 1,175 points lower the biggest point drop in history. percentage terms not the biggest, but still significant, down 4.6%. let's get more on the global market selloff, dom chu is back with me. late effort thougst thought >> it's a little icnsane as we looked at that time lapse. i remember being on air yesterday afternoon. we were doing segments during "closing bell" and before that on "power lunch. as i was making the transition from going on set to "power lunch" to "closing bell," we watched the dow go from minus 600, 700, 800, 900 at the end of

the 2:00 hour to the beginning of the 3:00 hour this morning in the "wall street journal," stock plunge erases 2018 gains the story below it says dow tumbles over 1100 in biggest point drop ever and "panic type selling" that's above the fold in the "wall street journal. >> that's saying stock erased 2018 gains it's early in 2018 we're not erasing 2017 gains if we're talking about the cause, the spark being rising yields, yet the economy is still strong, companies should continue to have good earnings >> it's a great point we make about whether or not the markets are the economy and the economy is the markets this is not suggesting that the u.s. is on the brink of a big recessionary event, or that the economy has stalled out. what's interesting about the move, many people have shown it's -- that the bulk of the action is happening in the stock

market itself. we have seen the yield picture the trend has been higher. it was only yesterday that we saw the real big drop in yields. they rebounded a bit today you have not seen as much activity yes, dollar/yen and the yen crosses currency against the yen have moved but not quite in as dramatic fashion as you would think during a panic type selling situation. and gold prices, that's something else we looked at. yes, they were higher, they went from around 1330 an ounce to 1340 not exactly a huge price move you would see to the upside if people were that fearful either the safe haven trade is not what it used to be or this is a very interesting type of event in terms of a selloff. we talk about risk on and risk off in the past. it seems risk off but only in certain parts of the market. >> selling equities, raising cash, not necessarily buying other traditional safe haven assets thank you very much for that going to bring in larry

mcdonald, from acg analytics, editor of the bear traps report. good morning to you. >> hi, wilf. >> your take in terms of the spark? is it still rising yields, even though yields have moved a bit back the other direction >> we're really heading for a regime change. in the '70s and '80s there were multiple instances of -- talking like 20 instances where stocks and bonds went down together in the '90s, only two. in the last decade, zero we're heading for a regime change where bonds threatening equities there's a decent chance this year we see 3.5%, 4% on the ten-year, globally sovereign countries, the credit quality is the weakest probably in 50, 60 years. it's a bond shock story. >> so, that, i guess, implies

that valuations become more focused on equities, and perhaps they were overstretched, they are coming back. at what level would they have come back enough that they become more attractive welltiree to bonds again >> some sectors are attractive throughout history there are periods where commodities started to outperform equities that's what we're coming into. right now we're very much like we were in the late '90s like 2010. so we're coming into a regime where commodities outperform equities so the oil names, those will do very well this year. a great chance to buy them on the pullback and silver and gold. silver in particular in 2010, when we had this type of regime change with inflation, silver was up 140%. gold up 40%. >> would you be buying commodities at the moment? >> last year equities

outperformed commodities by the most in 20 years gold, silver, natural gas is a screaming buy because of the global picture and what the trump administration is doing globally there's some real good buys here >> larry, great to hear about some screaming buys early this morning. not many times i've heard that larry mcdonald, thank you very much banks are another big part of the selloff financial sector having its worst day since the brexit vote yesterday. let's bring in chris whalen. good morning to you. >> good morning from. >> dom still on the set. rising yields, still the trend year-to-date, it's meant to be good for banks why are they selling off >> the banks were fully valued they had run nicely. bank of america was one of the best performing stocks of last year but the markets are trying to figure out what is value given

that the central banks are not going to be the primary buyer of debt and equity securities since that's changing, we're going through a price discovery. we're going through the same thing in real estate high-end real estate is softening, and the sellers have not quite come to jesus in terms of how good it is they're at selling their house. >> yesterday, during the rise in the markets when we almost turned positive on the dow, we saw a couple sectors and industry groups make that move higher into positive territory one is regional banks. what is interesting about the regional banks are they more levered into the policies more than the larger banks.

>> in terms of growth, yes pnc, look at them. that sized bank is allowed ede grow, think are allowed to acquire, but the bigging guys can't. as an investor you can buy high quality names that were at two times book or more two weeks ago. but i will say this, we don't know what the world looks like a year or two out with a 3.5% ten-year bond and a lack of central bank buying. in equities, too plus the leverage behind equities >> when we talk about volatility picking up a lot and the fact that someone like goldman sachs is underperforming for the last year or so relative to the market, is this a time to buy goldman sachs, be brave and go for a stock like this? >> you're right. the thing killing all of the big universal banks is the fact that the lack of hedging, the lack of activity generally because the central banks own everything,

they're drying up the business mortgage business, too hedging for interest rates has been down. we'll be down this year. so i see an interesting pattern, which is less demand for credit than one and two years ago yet we're still in this narrative about growth, which i agree with i think you get interest rates to move significantly if you get stocks to come off, you'll put a different cast on this economy >> chris, we have to leave it there. thank you very much. >> thank you >>.c dom, thank you very much. coming up, the pedestrian facto fed factor and another check in on futures. we've recovered significantly. the dow was off over 600 points, off over 2.5%. it's down less than 500 points, less than 2% clearly still a lot of red on those screens. we're back on "worldwide exchange" in a couple minutes.

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but for everyone else, there's directv. for #1 rated customer satisfaction over cable, switch to directv and get a $200 reward card. call 1.800.directv welcome back to "worldwide exchange." i'm wilfred frost. let's get you up to speed on the market action, coming off of yesterday's massive sell jouoff, down 4.6% for the down we are down over 444 for the dow, down 1.8% in the premarket, having been down as much as 2.6% 20 minutes agolf t

the nasdaq is down a third of a percent. the nasdaq is the only one of the three indices in positive territory for the year treasuries, yields came off the highs yesterday. we are moving higher again, but not significantly, 2.72% the yield on the ten-year. peak last week was 2.85% big moves in the equities and bond market highlighted a concern about a rise in inflation which could prompt the fed to act more aggressively on rates this year. good morning, steve. >> i think the issue is that friday's wage number really spooked the markets. the trouble is there's no evidence now of that inflation if you look at the core cpi number or the core pc number, the one the fed watches the most, not a whole lot of movement there the big story this year, you see that peak in that chart there? when it came down. everybody thought it would come up so the idea that we're heading back towards 2% either way, that should be normal but that wage number spooked the

market, even though it didn't cover about 80% of workers out there. it was the toch workp workers tt those wage gains >> global yields have been rising and pulling u.s. yields higher >> big adjustment. >> it's true as well in terms of the inflation picture there in europe, 1% core inflation. that's a single mandate ecb. are we overexpecting how much globally central banks could tighten? >> how much -- how worried you are depends on your position i think the story here may be that the market was so overextended that any little bump really -- when i think about what are the keys to this selloff, the data i'm looking at are the inflation and wage data. that's the first thing second thing is fed speak coming up you have powell at the end of this month who will give testimony to congress. that's key, we have to

recalibrate the action with the new fed chair. what is it going to take what interest rate will it take to finance these growing u.s. deficits because of the tax cuts and the bond auctions will be significant. >> on thursday we got the scenarios for the stress tests from the fed, over the weekend we got a slap down on wells fargo. is it possible that this deregulatory environment that everyone has been so hopeful for and expecting is now not going to arrive? >> i think it will arrive. powell is committed and i think randy quarles is committed to -- let me say this. committed to taking the edge off of some of the excesses of dodd-frank the question becomes is congress also committed there's a bill out there that i think should have bipartisan support, whether congress can get that done this year, and that would alleviate some of the most stringent requirements on the small and medium sized

banks. i don't know if that will happen it should happen there's political questions about it >> financials the worst performing sector yesterday. thank you very much for that we're approaching the top of the hour the team is getting ready for "squawk box. becky joins us >> good morning. something to wake up to this morning, you have been covering it so well all morning long, the dow under pressure again the futures across the board looking like it's going to be another rough start to the session even after the declines. the dow futures indicated down by 450 points this will come as a surprise to people already hearing reports on the radio that they're not measuring fair value correctly who knows what will happen this morning we have all hands on deck. we'll cover this from just about every angle. looking at the volatility you were talking about, tim freeman and nelson griggs will join us to talk about that looking at opportunities in the

bond market. ken fisher will join us to talk through some of those issues and getting the view from the white house. kevin hassett will join us with reaction from the white house. not only what the white house is thinking about this and is there anything in the economy that would be pointing to this? kevin o'leary is with us for three hours, mike santoli, dom chu will be here as well >> becky, thank you very much for that that futures market picture, down 430 we're back here on "worldwide exan" thchgewi much more analysis in a couple minutes

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the nasdaq down 30 points as well looking at about a third of a percent down for the nasdaq. a percent down for the s&p the best part of 2% down for the dow. let's bring in joe lavorge and daniel demarti danielle di mar te dimartino boh >> i think there was an overreaction on friday to the wage inflation number. there was a decline in the length of the work week that largely offset that. i have been intrigued over the past 24 hours or so to see the major pullback in bond yields. there's not much talking about given to that. at one point when futures were down at their lowest point

overnight, we saw that the 30-year dip below 3%, the two-year below 2%. that will complicate matters for jay powell he wants the markets to stay on the pathway of at least three rate hikes this year >> joe, we talked about interest rates being a spark for the telloff. do you think fed expectations for rate hikes have changed and is that justified? >> they have, and they will if this stock market correction continues. if you look at the friday wraj numb wage number, it got people nervous. the futures priced in about 100 basis points of hikes, we'll unwind that if equity markets soften i don't think the fed will do three hikes. my view is two there's no inflation and the fed has no choice but to see how these tax cuts play out, see if

the economy can generate productive capacity through more investment spending. this is the problem with qe and the legacy of the bernanke fed we'll see if we will get a jay powell put the market now will test that thesis, but as you said, we had a significant correction the data looks good, but this will test whether the fed can try to normalize the way some people think they can. >> joe, we did see the dollar strengthen on friday, strengthen yesterday, albeit not much given how weak it's been what is your take on where that goes from here >> to me, the dollar will find a base i'm not dollar negative. feels like the inverse of last year when everybody was long the dollar, positioning was extreme. to me it's moving back the other way. if you believe the u.s. is further ray long in the business cycle, the dollar should catch a bid and it will be okay. i don't look for significant dollar weakness.

>> when we look around the rest of the world, is the same true in what you said in your first answer about the u.s., the economic picture is strong, the fundamentals still support it? >> to joe's point, the reason the dollar is finding a base now is because the markets have begun to look ahead to the extraordinary strength out of the eurozone and the sustainable of that recovery the fact that a german will be running the european central bank, we'll know who that individual is by labor day and the market is pricing in tightening in europe the biggest question on my mind in the coming days, we all saw jay powell's video statement yesterday and his reassurances about financial stability and the fact that the financial system is more resilient today is whether or not this entire process, if there's an increase in volatility, keeps him with the pedal to the metal on quantitative tightening and shrinking the balance sheet. >> thank you very much for joining us >> thank you a check on futures before we go we were down over 600 points,

now down less than 400 points. that is it for "worldwide exchange." lots more coverage throughout the day onnb cc including next on "squawk box."

a global market selloff is in the works sharp drops in asia and europe after u.s. stocks suffered their worst loss in years. u.s. futures whipsawing all over the place, pointing now to another negative open on wall street it's tuesday, february 6, 2018, a special presentation of "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on

cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin sitting in with us this morning is kevin o'leary, a cnbc contributor. also mike santoli is with us for this hour. here's what you've been waiting for. the look at what happened after those huge declines last night if you were looking for relief this morning, you will not get it yet however, believe it or not, with the dow off 355 points below fair value we're off the worst levels of the morning. earlier this morning it looked like the futures were down by 600 points still you're looking at down 368 after the biggest point decline we've seen in history. yesterday the market was down by almost 1200 points at the end of the-day. t the nasdaq is off by 36. just in case you missed t you probl probably didn't, here's ho