They started at 3 at the beginning of the year. Anybody looking for rates to go straight up has been completely confounded by this. A lot of different guesses as to why you would see the bond market still in a situation with the tenyear, below 2. 5 . Well talk a lot about that today. Central banks will be in his words, exceedingly on shortterm Interest Rates as markets emerge from the liquidity trap. He made the case for what he is calling the new neutral on cnbc yesterday. I dont think the worlds upside down. I think the world is pricing in and coming to grips with the fact that post the moment and post five years worth of healing in the economy and in the Financial Markets and in the banking system, that were on the cusp of emerging from a liquidity trap and that the fed and other Central Banks around the world are going to be exceedingly low on shortterm Interest Rates. Thats a brand new regime. We are calling it here the new neutral. Well be talking more about the new neutral with pimcos deputy cio within the hour. We had the question, was Paul Mccauley going to cut his hair within we came back . He did. He took the beard off. He chopped the hair a little bit, too. Do you think that was required. No. I thought he was going to be so cal, fit right in. A little shag going. He cleans up well. He does. What do you think about why were looking at yields below 2 . You have the gdp numbers that stunk. But thats not it. Thats not it. Its an issue of liquidity, assets going into being spread around. The risk assets still look okay. You want to be in stocks. On the rate question, i was talking to a fund 34ger. He told me he was at a Goldman Sachs round table recently, everyone there was concerned that the rates will stay this low. Theres too much of it. Its so heavily weighted to one side. Nobody is breaking from it yet but everybody is worried about it. Was that the gary cohen comment that made no sense where he said the whole markets make no sense . Its been a huge pob for them. They havent seen the volatility. For anybody who plays on the volatility, its affecting how theyre performing. Right. It could be a perfect spot, though, right now. If you look at the mark, im not sure what the new neutral is, what it really means. I think i get it. Im not entirely sure i do. I didnt know what the new normal was either. Easier than the new neutral. Right now, its quiet, everyone. But things are pretty good everywhere. If youre a bond trader, things might not be so great. But for the rest of us, right . A goldilocks moment. No one talks about it. Thats why were seeing the markets hitting new highs. Exactly. We were having this conversation yesterday in the editorial meeting. All the old guys are worried that there isnt a disconnect between stocks and bonds right now. One of my guys said you come into next week and get this data. Next week the data will matter. Next week if the data is mild, the market will float along like this. If the jobs number comes out strong, bang, then youre off to the races on equities. You get the disconnect that all the old guys have been hoping to see again, helps us sleep at night. Lets tell you what well be getting today. On the calendar personal income and spending, that comes at 8 30 eastern time. May chicago pmi and a final read on this months Consumer Sentiment. As dan mentioned next week, thats maybe when people will take more attention to whats been happening. Ill get your views on this next story. In corporate news, google now taking steps to comply with eu socalled right to be forgotten ruling. The company launching an online forum today that lets european consumers request to have personal information removed from search results. Google is not saying when it would remove the links. Is this doable . I mean, the links dont the sites dont disappear forever. Its that they link from google disappears forever. But it doesnt mean that this is going to happen at bing, for example or any of the other search places or yahoo . Does this make sense to you. Its a story that regulators are much more concerned about consumers. When have you heard consumers complaining about this . I think people understand the tradeoff. They know they have Great Services for free and they give up privacy. It bothers me from time to time. So dont buy anything online. Im not going to do anything online. It hasnt impacted me to this point but i dont like the constant collection of data. They havent figured out how to use the metadata yet. You trust the eu regulators to make that right . I dont know. I dont. I dont trust either one of them but i dont want these guys messing around with it. I dont Want Companies to be constantly able to gather that data to change the rules and requirements along the way. I dont mind them gathering the data, i just wish the rules were more clear. They change them. This is theater. Youre never going to get rid of those things. Theyll always be there. There are 10, 15 stories id like to get off of google. Really, lets bring some of those up right now. How is google going to decide . Are they going to have human beings sit there . That becomes an expensive pursuit. Right. I dont understand the whole thing. Forget the ruling itself. Like the forgotten ruling. He wish he could get rid of that link, the link of the story. Another story to talk about this morning. The u. S. Justice department wants bnp to pay 10 billion, issues that the french bank evaded sanctions against banks in iran and other countries. This would include some type of criminal charge or at least pleading guilty to a criminal charge. We saw credit suisse, this happened before. Do they pick on foreign banks . Do you see a trend here. You think thats a problem . No. I dont have a problem with that. Is 10 billion enough . Too little . For whom . 10 billion catches your eye. Do you care . Do i care . That they do this. Does this seem like an appropriate thing to be done . I think its appropriate, sure. Youre okay with it . Everyone here is all good . I dont know enough about it. Dont have a big opinion on this. Theyre transferring money, illegally transferring money from countries they shouldnt be transferring money from. Should they be in business at all . In the United States. Should they be in business at all. Paribas. Yes. Whats the magnitude of the business with iran they did . I dont know. You think theyre the only large Multinational Bank to do business somehow i would imagine to shut it down or revoke its license youd have to see systemic Business Plan around doing this. Lets work with the axis of evil. Absent that, 10 billion, a couple criminal charges, thats legit. Go Donald Sterling on them, ban them completely. We call them criminal charges. This is what happens. We say theres a criminal charge but none of the things that come along with the criminal charge actually happen which usually mean going out of business or revoking your license or whatever. Andrew has a stronger opinion than anybody at the table on this. Im just answering the question. Are you for or against. I was trying to stir up a debate but im failing. Nobody wants to play. You want real krirn charges, hang them in the Public Square or not do anything. I think either you do something with consequence or dont do anything at all but this is theater otherwise. Where does the money go . 10 billion not consequence. Where does the 10 billion go . Who gets the money . How is it used . For more enforcement . Its like academia, you get a degree to teach more people so they can teach that . Does it go to build highways in america . If its for highways in america, im okay for it. They should double the fine. Shifting to technology news, microsoft announcing that it will integrate rival sales force. Com apps into its windows platforms. This tieup will help microsoft in its pushed. The stock was up 1 and sales force. Com was up by 2 . The company was founded to have colluded to fix the price of ebooks. A july trial will determine damages. Lets talk about the buzz story the morning. You will have views on this. If you dont, i dont know what to do. Steve ballmer is buying the Los Angeles Clippers for 2 billion. The Purchase Price sets a record for an nba team. That deal needs to be approved. A lead group by david geffen. I want to say proudly that i think we might have mentioned Steve Ballmers name for the First Time Ever relating to the clippers on this program. The monday after the news first broke about sterling, having said that congratulations. Thank you. Do you believe this deal sterling, the man says hes not going along with this. The wife signed it. What is that about . Well, i mean, first of all, maybe this is gods way of telling you you have too much money when you can bid 2 billion for the clippers. The second thing that occurred to me, shades in the 45 bid for yahoo right, 2 billion for the clippers . Im just saying. If he was willing to do the clippers, he should have been willing to do yahoo . Do i see a trend here with over paying . Then you have to wonder, is it really going to go down . Because remember whos there by the way is dick parsons is in the mix, trying to make sure this thing happens. I would you think dick parsons is trying to steer this deal to someone else . No, i dont. The way this thing happened quickly, i think it means that adam silver and the nba are signing off on this thing. I think so, too. Sterling can say what he wants. The wife and Family Lawyers haven hadaled his objections. You think the wife and husband are in on this together . He has to pretend that hes no, no. He has to pretend hes not interested. I do. I dont know why. The wife is saying one thing, hes saying another, theyre in cahoots. They did this to get to 2 billion. Think of the taxes the man has to pay. I heard someone saying that. Not in jest. Good problem to have. Think of the taxes. How get is this for the nba . More importantly. You have two teams in one major market in new york. Now youll have two competitive teams, a real owner. Sterling lucked into this team he has now. Do you think that ballmer will be a good owner . The ceo of microsoft, hello. Here we go. Thats a sorkin rhetorical question. Im asking you. Im not asking wait a minute. You have to answer the question, youre a guest host. I think the record would show he was not a great ceo of microsoft. Why would you think he wouldnt be a good owner of the clippers . If you think he was not the greatest ceo of thats snarky. Im asking the question. Youre right. It doesnt necessarily translate that youre good or bad ceo or good or bad owner. This is a snarky conversation. It ends up the clippers get knocked out of the playoffs in the second round every year. Theyre not apple. Theyll be coming in right about here. I think this is going to happen. He was already vetted because he was going to buy another team. He wanted to bring a team to seattle is what he wanted to do. Thats an interesting question. Does he bring the team to seattle. His quote was in los angeles. How long, is that a wink, how long los angeles, four years, five years, do you try to get another arena . So youre not in the same arena as the lakers. Steve ballmer is an exciting personality, somebody who is incredibly enthusiastic. Thats for sure. I want to see him on one sideline, cuban on the other. Thats going to be great for the referees. Do you think hell complain to the referees at games . No. You answered it. I was hoping youd show the clip of him jumping around. Hell watch from the sidelines. Well pick the screaming shot for maybe the 7 00. Great, looking forward to it. Right now its time for the Global Markets report. Julia chatterley is standing by in london. Good morning. Good morning, becky. I was listening to you asking questions about what to do with bnp paribas and whats going to happen Going Forward. Investors asking the same question. Thats the key underperformer in the stoxx 600, the tiny square down here, down 5 right now. In an unchanged market for the stoxx 600. Ill give you a look as far as whats going on with the individual markets. Losing ground as far as the ftse mib is concerned. It wasnt a sell ain may and go away. The key outperformer, the german markets. Interesting to see whats going on italy, losing ground by 0. 8 . On the yeartodate performance, up 14 right now. But ill go back to what i started out, talking about bnp earlier, shares in bnp off around over 5 . A wall street journal reports that the french lender could be hit with a 10 billion fine over those allegations that evaded u. S. Sanctions against a number of countries, including iran. Weve heard from the french siene tall bank saying theyre watching the situation very closely. I spoke to the head of European Equity trading strategy at jpmorgan earlier today. He said even if we see a lower fine of around 8 billion, which is what bnp are fighting for, we could see a dividend cut Going Forward. They said, look, even with a 10 billion fine, this is still undervalued, theres still value at these levels. A whole host of different opinions. The key question is what does it mean for the u. S. Operations Going Forward . Well continue to ask these questions. Guys, thats it on the european wrapup. Back to you. Thank you very much, julia. Have a great weekend. Lets get more on the markets now after the s p notched another record close. Joining sus david joy, chief Market Strategist at ameriprise financial. What happened to the gdp. I think investors are comfortable with the idea that the First Quarter was a total laboration. Second quarter, maybe close to 4. The data seems to be telling us that its getting a little bit better. I think allowing stocks to drift higher along with the better data, plain and simple. We expect that things are getting better. Anthony, is that really the case . What does the economy look like right now . It really is, to expand on what david just mentioned, yesterday we saw much of the weakness was in inventories, inventory contribution was minus 1. 6 from a previous number of minus 0. 6. We know historically when the economy is expanding, when you see that kind of weakness in inventories it snaps back very sharply in the Second Quarter. I would not be surprised if you get a number thats sharply stronger than 3 in the Second Quarter. We probably will gravitate to 3 in the third and Fourth Quarters but thats still a pretty firm underlying growth trend over the next three calendar quarters. David, with the numbers weve seen with the latest gdp print, that keeps the fed at bay for now. Andy said this is a goldilocks moment. Is that what you think . I think it is for the time being. I would define that as maybe the next couple of quarters. Once we get within that sort of sixmonth time horizon of the first fed rate increase, youll see a market correction, simply as a result, the portfolio reconfigure ration. I dont think it means the end of the recovery or the bull market but i think theres a correction waiting for us out there. History would tell you that, but also history would tell you it doesnt have to be that severe. Maybe somewhere between 5 and 10 type pullback. I think we get it in the Fourth Quarter or so. Is that pull back that takes us below the levels were at today or do we run further ahead . And that pull back, if youre waiting for the pull back to jump in, you missed it because youll be looking at stocks. I think the upside is limited. Maybe we get to 2,000 on the s p. That implies about a 4 rise from here. I think we get that over the next couple of quarters. We end the year somewhere, i think, around 1850 or so. Wouldnt be a bad number. Below where we are today, were above 1900. 1920. Yes, yes. I think we end the year below where we are today. I thought things were supposed to get better at the end of the year and into the First Quarter. Everything has changed. If we were to go back and ask people a month or two ago, everyone felt lousy. Everyone thought, the Fourth Quarter. The market has moved. Hes saying the fed will act, rates will go up and youll have this pull back. Weve been talking about that for how many years right now . Its unbelievable. Anthony, what do you think . Weve been talking this morning. Rates and points hitting well below 2. 5 for the tenyear. Theres a couple things going on. First of all if you look at this economic expansion, its been about half as strong as the typical economic expansion that weve seen in prior cycles. So that means that in this kind of an environment, the Federal Reserve when they normalize Interest Rates, they may not have to go as high as they historically have gone. If you look the aa normalized fed funds rate of 4. 5 , this economy cannot withstand at this time a 4. 5 fed funds rate. If you are going to so a fed funds rate that rises not only slowly but maybe not reaches that very high level, then youre going to see these tenyear treasury rates perhaps being weaker or perhaps not going up as much. Then of course youre seeing the noneconomic buyers. Yesterday we saw another number where foreign Central Banks increased their holdings of u. S. Treasuries by another 8 billion. Again, theyre holding over 3 trillion worth of those treasuries. So those noneconomic buyers that are not in there just to look at Interest Rates are in fact holding down Interest Rates. But having said all that, at some point the forces of gravity will really overrule. And that is when you see Economic Growth starting to increase, you will see those tenyear treasury rates going higher. Ive done research that finds when you see a 3 acceleration in real gdp, thats good for about 34 basis points increase in the tenyear treasury rate. Will you get that . Of course not. Because youve got all these other forces going on. Youre