Yearly and blackberry Ceo John Chen. So much to discuss with each of these guys. Toll brothers this hour and uber and blackberry after the bell. Pulling for john chen and that blackberry. Turn that thing aron. So you ask, i know what youre wondering. Who is the most powerful woman in the world right now . A new list is out today, and heres a hint. Its not janet yellen. I mean, some on wall street might argue that point, but well have an exclusive look at the worlds most powerful women list coming up, and well see if you agree with the results. Okay. Heres where we stand in the markets. An hour to go and the dow is off seven points and the s p off a couple and nasdaq roughly unchanged. See if things turn around as we head into the close. Lets get into our closing bell exchange, amy wu from rbc capital markets, Larry Mcdonald from new edge usa. Were very pleased to welcome one Arthur Cashin from ups, here at the trading desk and Jack Bouroudjian from index Financial Partners and, of course, our own rick santelli. Arthur, im going to start with you. The feature for you, havent mentioned that the tenyear yield has collapsed again. We got down to 2. 44 at one point today. Whats going on in your view today . Well, i think the scramble for yield is getting more and more desperate. Its interesting that even with the tapering going on, actually getting to a spot where it should begin to work against yields, in essence push them up, its not. Its not a simple answer like a flight to safety. I think its a global scramble for yields. People pensions and other people undervested and desperate and paying anything they can to buy that tenyear. Yeah. How much of this would you put down to flows or demand coming out of europe, to whats happening with german rates . In other words, is the tenyear, which is important here, of course, to the future of where the Mortgage Market heads and everything, is that reflecting as art is suggesting something thats emanating out of europe as opposed to fundamentals here in the u. S. . Well, i think the catalyst for this goround is definitely the ecb meeting one week from tomorrow, and i think when you have a tenyear spanish yield at 2. 80 which is basically 40 over 10s theres your answer right there, you know. If i were an investor heres what i would do. I would look at all the yield throughout the globe that make no sense and would i sell those securities, but then i would think to myself, uhoh, what if a central bank tries to manipulate the rates even lower right in my face. I know what i can do. Buy a bund or treasury against it. And that epitomizes what goes on and if you want icing on the cake, look at job seekers in france. That reached an alltime high. Look at the unemployment numbers in germany released today. 24,000, on a month over month basis, one of the largest numbers since april of 09. I dont think you have to look far. I think there is a scramble. I agree with art, but i dont think its a scramble for yield. I think its a scramble for a relative value gps that has been robbed from the marketplace by global central bankers. Having said all that though, Larry Mcdonald, you have been pu bullish on bonds and now youre turning bearish, right . If it was a stop they would stop t. Bonds are crushing stocks in 2014. The 30year total returns, near 17 . The tlte up 15 on the year versus 4 for the s p, but i think this is a capitulation moment. I feel theres a tremendous amount of capitulation, Short Covering thats creating an opportunity to get short bonds or sell bonds here. I think you want to do the opposite of what we were recommending clients do in january. Ill take the other side of that one. Hold on just one second. Amy, i want to ask you something related thats been a topic of much interest and its about where the volatility is or isnt in these market. Im wondering, because we talked to bob pisani yesterday and it generated a lot of discussion after hours, overnight and continues now. What role are structured notes, which are owned by pension funds, which are owned by High Net Worth individuals, what parole is the proliferation of these products playing and people basically betting on stocks staying in a range and having to be short increasingly short volatility . Kelly, thats a very, very interesting question, and one thing i would tell you, especially for structured notes issuance, a lot of what happens, especially in the european market, as well as in the u. S. Market, is a lot of the people who are owning these notes are trying to be short volatility because they are collecting yields. Exactly. And that has very interesting parameters to the dealer community, and one of the reasons where people are trying to explain why we see that suppression. The other thing i would just say is were talking about the tenyear and the level. What is more interesting is how low the volatility has been in rates. Right. And in fx and commodities and equity options. People say to me, look, the most interesting thing is that volatility is the lowest, cheapest asset class right now and none of us have a timing or trigger of when this will change. Is this a coiled spring, amy, that were building here with everybody winding up on the short vol trade like they are . You know, to me its sort of we have to get to a point, and the point is we have the fed tapering, but we still have ecb out there. Yeah. The problem is people have a very difficult time caring this timing, right. They have been holding long ball positions and know the regime is low. Just dont know when and if it will spring any time soon and a lot of people get burned holding it for a long time so you still continue to see people selling puts or using notes to be short vol because thats how they get yield right now, and its not that they dont know that it can end. Its just that they dont know when the party will end. Lets add Keith Fitzgerald to the fun. Keith, i know youve been bullish on stocks. Weve been sitting at these highs. Weve got this lack of volatility here. Do you still think that the next best move is to the upside . Well, i tell you, im becoming very, very concerned now for the first time in several weeks. I think were buckling up like a pilot says weve got turbulence ahead. I think a summer swoon is coming, a leaderboard changed dramatically up on the dow it investment only 1 in 19 stocks having 52week highs on average. A year ago that was 101. We got overbought readings consistent with what we saw in 2007 and a percentage of gdp in terms of market capitalization which is what we saw right before the dotcom crisis. Im careful and im cautious right now. Hang on, jack, there in a second. What do you think, art . I think thats dead right. Saying for some time youre seeing the indices go up with fewer and fewer players supporting it. A smaller percentage of the s p and when the dow is kind of a distorted index, but the s p and a variety of the other indices, they dont see the same number of 52week highs that youve had and an old fogey like me doing this for 50 years you tend to look towards tops or bott tomorrows or turnaround points when you get that nonparticipation. Fewer stocks are hitting those highs. Low volatility that many natives say when the birds stop singing thats the time to be cautious. I learned from you, art, by the way, so thanks very much for teaching me. Jack, are we still going higher here . A lot of people getting sweaty palms . How about if i told you not only am i on the side of that trade but i have a feeling well see a bit of a meltup over the course of the next few months and let me explain that. If you listen real carefully, and ricky, i hope youre listening, wish i had one of your props right now, you can hear that sucking noise coming out of the bond market which is just sucking in longs and it is a trap. You can see it. It feels it, and it is eerily like a blowoff top today. Having said that, what is the real story for me is the fact that were looking at a stock market that went sideways. It corrected in a sideways fashion, and right now, lets go through some numbers. Im looking at a market that has 115 of forward earnings for the s p which has given it roughly a 17 multiple. One if it spanned one single multiple, all right . From 17 to 18, thats 200 s p points and it will happen in a flash. Youll have a lot of people reluctantly that will be wondering why they are losing equity purchasing power parity. Just a quick question, art f. Rates, if its europe to some extent, are lower than they perhaps ought to be based on how the u. S. Is doing, what does that ultimately mean . To go back to jacks point of a market meltup. Could that put us in a situation where it does stimulate asset prices, overshoots it to some extent because theres other forces holding down here . A great many things going on. Im not a technician or chartist. I work with cocktail napkins. If you look at the movement in the tenyear, down below 1. 47 which was kind of an important point, that could go down to 1. 35, maybe even 2. 25. That could begin to influence as you said at the opening Mortgage Rates, and you could get refinancing. You could begin to see a lot more activity and that might give jacks premise a little bit of a boost here. Theres a lot at stake, and i want to see where they go first. The last couple of times that rates were sinking, you saw financial conditions generally tighten and thats not happening this time around. The credit markets are still strong. Just had a billion dollar issue. Youre not getting the warning signs that were losing momentum here, are we . Not yet. I think things continue to move in the right direction but the old phrase may you live in interesting times, i think the next three weeks will be very interesting and what mr. Draghi does may set all these markets a kilter because you cant do the kind of qe that we do. Everybody is nodding. Well leave it there. Hey, art go ahead, rick. Rick santelli here, do you really think the difference on a 30year mortgage between 4. 50, 4. 25 and 3. 50 is why the Housing Market isnt delivering the goods in. No, i dont think thats the entire reason, but i do think theres still a line of people trying to turn that house back into an atm machine. Ah, yes, yes. And if you can get rates down to, you know, 3. 25 2. 25, 2 , they will be in there for that extra quarter of a percent. All right, folks. Always enjoy the conversation. Thank you all for your contributions today. Appreciate it. Thank you. My pleasure. Lets get back to watching the ebb and flow as we get set for the close of trade. Dow slightly negative and the s p adding a point, significant because we could be closing for a third day of record highs. And the Toll Brothers talks about the luxury Home Builders profit doubling in the next quarter. How long he sees hitting toll earnings out of the park, especially if rates continue to move lower here. Yes. Plus the ceo of uber and blackberry will take some time out of the code conference and we eel get into soaring valuation estimation and blackberrys ceo giving us the scoop on winning back customers who have defected to iphones and android. Keep it right here. Youre watching cnbc, first in business worldwide. We were just discussing gold during the commercial break. Some interesting moves lower for that metal today. Jackie deangelis keeping an eye on things over at the nymex. Not another great day for gold prices, breaking through another key Technical Support level of 1262, closing down around 6 today at that 1259 mark. Of course, this is after the slide yesterday of 25. So the key issue to watch here, traders are saying, its the equity market. If equities continue to climb and make new alltime highs, gold will continue to slide if theres any hedging or any safety protection out there. Investors are running to the bond market. They are not looking at the gold market. Meantime the miners saw a little bit more of the losses steepening and intensifying today as well. It wasnt just the precious metal itself and when traders are asked about the next stop they say technically were looking at 1247 but could go as low at 1210 or 1200 if the dow continues to climb, if it hits about 17,000, and were not that far off from those levels at this point. Back to you. An important signal to watch is we try to figure out whats happening. Tenyear treasury yield falling to a new 2014 low coming with the Interest Rates just as investors were creating an uptick. Leaving people confused where rates are headed next. Whats going o. Cnbc senior contributor larry kudlow and deutsche banks chief international economist. It is the question of the hour, guys. Why are yields going down when the fed is tapering and the yields we were all expecting to go up . Whats your version, larry . Basically i think the Treasury Bonds are telling you, a, moderate growth in the economy. Most of the drop, as weve discussed is real Interest Rates. Can you see it in the t. I. P. S market. B, 2 inflation, maybe slightly higher, nothing to get excited b. Bonds are probably overshooting on the downside. Would i rather buy stocks. This is the stock market that everyone loves to hate, and i just would rather buy stocks period. Thats where id be right now. Youre alone on that one. Next five years, just stay with it. Isnt it the case that weve worried about the yield on the tenyear following and on the tenyear rising and the equity markets and credit markets churn ahead. Is that an important signal in the Global Financial significant until, is it not a signal anymore . The Economic Data is Getting Better and better and numbers on the inflation front, bpi and cpi and even the cleveland fed is predicting will go up and rates continue to go down. Right. Whats most peculiar about this is no one has a real expectation of whats going on and thats when markets step back and say, wow, we dont really know whats going on and you get all the explanations thrown at you and you say i think its this and someone else says i think its this. The move itself is the information. That makes you somewhat worried because its so disconnected from the economic recovery. Bonds overshoot, stocks overshoot, no big deal, gold is crashing, how big is that . Yields are dropping, not because of whats happening here but overseas, and youve got a number of investors over there who are coming to the safety of the u. S. Treasury market. Who knows. As their economies slow down. Id want to be long european stocks. The central bank is going to ease the treasury over there. Just get into the stock market. Profits are going to improve. Might see some buying from the emerging markets. If the u. S. Was more of a closed system and rates were starting to rise and that would act as a governor on activity and instead for whatever reason yields are too low relative to where they quote, unquote, should be. Kelly, kelly. This ends badly again. This is a this is a downsized goldilocks. Not real goldilocks which is 3 to 4 . This is a miniature goldilocks of 2. 5 growth and low inflation, and and whether they are right or wrong, we wont know for years, the fed is not going to tighten, as ive said, in my lifetime. They may normalize you. Ive been kwoegt you and a lot of flinches when i say that to people. Doesnt mean they wont raise rates, but thats just modern normalization. Im talking tight money. You are years away from tight money, and, meanwhile, profits continue to slog their way higher. I dont care about bonds. Davis i think theres certainly been slowing in growth and the rewound wasnt as strong as we thought after the crisis but banking is better and housing is better and that process will create tighter markets which will create inflation eventually. Mario draghi no, no, no. Growth doesnt cause inflation. Growth does not cause inflation. Thats why i said tighter markets. Draghi is widely expected to cut rates next week in the European Central bank. Do you think he will . Hes been threatening it a long time and hasnt done a thing. Certainly playing a very Important Role in psychology, if you look at the values as talked about earlier, certainly the u. S. Rates look relatively attractive compared to what youre seeing in europe. The outlook is the any stinks in europe, lets just call a spade a spade. So buy stocks. Even germany. But the central bank is going to backstop the economy. Thats what they are going to do. The same thing will goin a here. Ive got one for you. Why dont you buy india. Buy the indian stock market. Theres a lot priced into that market right now. Had an incredible rally. Gone from some free market capitalism in india, get out of china which is probably not going anywheres, and i want to say, dont underestimate this fed policy thing, okay . Look, right now the tailor rule says the fed should be at 1 and the old fed funds rate and they are not, and they are going to take their time. Look at the futures market. Doesnt even happen next year. That experts an northern effect all the way up the curve. I think we all agree on the u. S. Economy but the question is should we or shouldnt we be paying whats happening in the bond market, not just as a signal i hate bonds right now. Bonds are so boring to me i cant stopped it. We need to abolish the Corporate Tax. I thought were you going to say abolish the bond market. Get rid of the Corporate Tax and bring the 2 trillion here thats overseas, back here, and put some torque into capital goods and jobs and then well have ourselves a good economy. Right now thats not happening so bond rates are dont worry about it. Go into the stock market because the economy will surprise everybody. Its a mini goldilocks. This from the man who when he got up on the set said im low energy today, i dont know whats wrong. I knew you would take off. Everything is fine. This is people are looking for reasons to be pessimistic. Stop it. Stop it. Its going to be okay. The political situation is going to improve. Jobs are going to improve. Larry, always good to see you. Thorsten, thanks for joining us. My pleasure. Well, larrys favorite market is starting to come back here a little bit. The bond market. Yeah. The dow is very close to turning positive here. Down four points with about 40 minutes left in the trading session. Were still though about 35 points away from an alltime high on that. The s p, if we get a positive close there, it would be our fourth consecutive record close. Is it four now. It would be. And in fact were positive right now. Merge