Matt has a magnetic compass which is pointing in the north-south direction. He brings a large magnet close to it. In which direction would the magnetic needle align?
It would align itself according to the resulting magnetic field of the Earth and the larger magnet.
Magnetic needles align themselves according to the field of the strongest magnet around them when freely suspended. In the absence of a magnetic field of a magnet, a freely suspended magnetic needle will always align itself with Earth's magnetic field. When a large magnet is brought close to it, the needle will align itself according to the resulting magnetic field of the large magnet and the Earth.