A sea of red. Dow open 133 points off. S p 500 off. And nasdaq off 37 points now. Lets look at the ten year treasury. The yields hitting the highest level since early december. Looking at 2. 338 there. And also you should Pay Attention to the german bund driving a lot of the action in the global bond market lately and especially overnight. 2. 3 . Didnt we close yesterday at 2. 2 . Pretty big move. It was a big decline of more than one point yesterday in the ten year. And the bund last time it bounced. We couldnt figure it out. Remember that morning we were here early. This chart is incredible. That was the one that went there and the markets were covered. Its going to test the recent highs in yield. It was because the economy was going. Its what we talked about that day. We live by the sword, die by the sword. When rates finally start being normalized in europe we were staying low. Lets show everybody whats going on in the European Equity markets. Theres a big sell off going on this morning. You can see the dax off almost 2 . The cac off at least over a percent and a half. And ftse off 1. 7 . Those are improvements. A lot of them have been off by 2 . 2 here is 360 points 1 is 180 points on the dow. Here are the other big stories. Greece making a 750 million euro loan yesterday. A day before its due. But reuters is reporting athens tapped emergency reserves at its Holding Account to make that crucial debt payment to the fund. So going from one fund to another. Greece is close to running out of cash. Unclear how much time they have. Still hasnt reached a deal with its international kred tors. Goldman sachs says the market should get ready for another oil price dip. Crudes rally over the last couple of months derailed the rebalancing of the commodities price and goldman is downgrading its 2016 production for oil. And bill dudley is saying a rate hike will happen this year speaking at a policy conference in zurich today. He says policy tightening will depend on the u. S. Economy. Morgan stanley is selling its physical oil business. That unit has attracted some heavy regulatory scrutiny. Reports say the deal is likely valued at slightly more than 1 billion. More trouble for lumber liquidators. The company is facing a ton of wall streets and investigations over allegations of high levels of. They have sued nine carriers for breach of contract. Lets show you the World Markets again this morning. Its a pretty big move in a lot of the major markets. The dow would open lower and s p and nasdaq by 38 points. Europe is off of its lows but still weaker. German dax is now lower by more than 2 but france is lower by 1. 6 . The ftse is lower by 1. 7 and greece is lower by. 5 . We did see the nikkei call it flat. Hang seng lower by 1 . The price of oil in the wake of this goldman call oil is higher by nearly 2 . 114. Trading just above 66. Okay the ten year yield, if you look at the front page of the wall street journal this morning, 2. 2 . Already were at 2. 34 this morning. So another big back up in yields at this hour as we continue to see a sell off in the bond market and you can see the yields rising sharply to the right there. Heres whats going on with currencies. Heres going to cost you a buck 12. And the price of gold is higher by half a percent. Joining us to break down the economy, bruce ill start with you. Its the backdrops in the yield and the economy thats the dog here wagging the stock markets tail. What do you see happening in yields in europe and then here . Were fading extremes. If we think about what happens we came into the year with a fear doff deflation and came into it with weakest growth globally in this expansion and one of the two or three weakest global quarters weve had outside of recessions the market responded to that. Central banks responded to that. Fears doff deflation. Fears of secular stagnation and as we move through the Second Quarter were starting to see more normal outcomes. The one thats clearest is prices prices. Inflation was almost 0. Commodity prices were moving up. Were starting to see wage pressures in the country that were more advanced. The thing we havent seen is whether the growth was rebounding. We do think thats happening although the data is not clear here. We got to extremes in terms of pricing and bonds and fixed income. Im not sitting here trying to tell you im an economist and i can tell you how the market is going to value this specifically but were unwinding the extremes. What is the german bund going to key off of . Growth or inflation . Both. So when it got down to almost 0, how wrong was that in terms of where it should have been and now where it is right now . What do you think the real rate should be just based on fundamentals . Where we are now from a fundamental 75 basis points is good . Its about right. Really . Pretty slow growth isnt it . Were in a world of low inflation and where the ecb is buying debt. Bond yields will be lower. If you said 3 sequential inflation, 75 basis points makes no sense. Thats the normalization of oil prices coming back. Were in a world where globally inflation is going to settle somewhere around where it was in the middle of 2014. Were going to make a round trip. Were in a world in which the fed is going to be starting to tighten. Theyre going to have low inflation but were taking on the extremes on the low side. The stock market is always smart and we have gone sideways since the beginning of the year as if it was like looking at all of these things were talking about and saying im not sure im heading higher. A agree with what bruce was saying too. It seemed to swing a little bit too much to the negative and now were seeing the normalization in yields and oil prices so the market has been trying to digest that and theyre looking at earnings because it always comes down to earnings. It was negative at the beginning of First Quarter. Now it looks like it will squeak by with a positive so the market is trying to digest that. So a little bit too negative and things are coming in good and were seeing the normalization. Fairly valued . Is this a time where its really to get another up leg or at this point is it sort of reflecting all of this . I think were going to have another up leg. Second quarter again were seeing negative expectations. I think well go higher. I dont think were going to see a year like we saw last year but i think we could see high single digits. 5 Earnings Growth is what youre talking about. Anticipation was for negative. At the beginning of the year are we looking for 5 year over year growth. We get 8 . Weve been at 8 and then we go back down and negative and up too. Its been tough it habit been last year or the year before for equities. Right. It has been tough because we saw the Higher Oil Prices and pull back and First Quarter gdp was negative or could be negative after we get our trade report so i think that the market is trying to digest that but i think things were a little bit too pessimistic so well see better growth in the Second Quarter and earnings are going to continue to move forward and at the end of the day that moves markets. Well see. The market right now is nervous about Interest Rates and thats a low number but compared we were just at 18 and if its 26 27, if the german bund gets back over a percentage point i would imagine some investors would say this is it. But weve seen that before. Its to their detriment. Theyre trying to get in and out and try to get in front of that and really when the economy is Getting Better earnings are Getting Better theres no reason to not be in the market. A lot of people try to time the market and theyre afraid of bonds. What are you make something you build into your model that the ten year yield is where over the next six months . Above 2. 5 but i dont think its going to go that much more. We have a policy through the rest of the world pulling things back in here. But we will see it go higher and be predicated on better growth. Will we have the First Quarter 2 . What will we do in this quarter . Trend higher to be over 3 . Running over 3 by the end of the year . We dont think so. Note that the First Quarter looks like it will get revised into negative territory. Negative territory. Well get better growth but thats not saying much. I think 2. 5 feels right. And i think one of the key questions is whether that underlying growth rate is being held back by really weak productivity performance. Were starting to see them tighten in a way that wage pressures are going to come. Theyre coming against weak secular moves. We get up at 3 45. What do you want us to do to increase our productive. I have a couple of suggests. 3 45. I havent seen a 48 hours at 10 00 p. M. Much less whats this guy . Who is he . Is he retiring . If i did stay up that late i would watch johnny carson. Is he still on . I dont know. I dont know. Wait a minute leno. Just think about this. The First Quarter of this year was the weakest quarter of the expansion. The strongest quarter globally in terms of employment growth. Wow. Okay. All right. Thanks. Lady and gentleman. Good to see you. Thank you. Among our stocks this morning, shares of pall corp. Scoring. Theyre in the late stages of an auction this week. An estimated price tag is put at well over 10 billion and you can see the huge move in the stock there on premarket trading. Shares getting slammed. Warning the Current Quarter estimates will fall. Gap reporting same store sales dropped 12 last month. Cites also negative effects from foreign exchange. Another big story were focused on this morning. Details about the raid that killed osama bin laden. Sources telling cnbc nbc. Nbc, cnbc. Why dont you know what you said. Think about what youre saying and then youll know what you said. A socalled walking asset from pakistani intelligence told the cia where the most wanted man in the world was hiding. Sources also say the government knew where he was hiding all along. John harwood joins us with the news from nbc. This is a story by seymour hurst. He wrote in the london review of books. And essentially he stitched together a story that suggested the white house was fabricating the story of how bin laden was discovered and how the raid was pulled off and it involved the idea that the government knew where he was and intelligence ageneraldy knew where he was and the audis had in effect financed bin ladens exile and the white house pushed back very strongly from this. They said that this story was riddled with inaccuracies. Heres josh earnest responding. The Obama White House is not the only one to observe that the story is riddled with inaccuracies and outright falsehoods. The former deputy of the cia has said that every sentence was wrong. So i think that sums up the administrations view and i do think you have to make a distinction between the larger story that is woven together by him and some individual aspects of it. For example, is it possible that a walk in intelligence asset provided information that helped lead them to bin laden and it wasnt all about tracking the courier who had been delivering things to bin laden. Sure its possible that somebody had information like that and that fuelled their effort to find bin laden and often times intelligence agencies will try to cover the tracks of an asset who is providing them information. Is it possible that someone in the pakistani government knew where bin laden was, sure. But does that mean that the u. S. And pakistani governments were in on a conspiracy to spin out a false story about this . Im skeptical. John youre so soft. Nbc news determined not just that the pakistanis knew but determined that at least two pakistani sources told the United States he was there. So jessica all of that obviously we figured out that he was there. Thats why we struck the compound. I know. A year before and it wasnt from someone with a cell phone call in the middle of a crowded marketplace and identifying in the car like we saw on zero dark 30. People said wait a second hes a mile away from a Pakistani Military inflation. Now we know that they knew but we also knew that we knew john and the picture in the war room of how is this going to play out, it causes him to question it plus the media gauntlet this is the perfect story for you joe. The media gauntlet was already killing the messenger and then i saw nbc confirm it too and i was like holy spoke they better take a step back on killing the messenger and totally giving the white house cover on their story of things and then it make mess think the rest of it could be true too. No . Its hard to imagine a story that is more perfectly suited to starting your engines joe. I saw you retweet someone that he also determined that mad men wasnt filmed in the 60s. There you go. Undermining him. And let me just ask you one other thing. Wheres the New York Times and the Washington Post . A on the Clinton Foundation and everything that were now seeing that seems at least would raise some questions, where are we on that and it had to be si hurst that found out that we knew that bin laden was there . Are they going to get involved now . Either of these great print organizations . Are they going to get involved or no . Hands off of this administration. Joe, have you not read the stories that the New York Times and Washington Posts have been doing about the Clinton Foundation. Yeah, based on what they read in the book. Why didnt they have any information on that before he wrote it. You are so full of it this morning. Its unbelievable. They did a ton of independent reporting. Certainly the New York Times did and thats where the biggest sort of earthquake from the book came. Maybe theyll go and look into some of these things. See if there is a quid quo pro. Youre not affair of the fact that they broke the relationshipstory of clintons relationship four years ago. Yeah. Thats the most explosive allegations in the book. So it was so youre way off base on in terms of the New York Times and the post. All right. Well see how this plays out. Hold on a second. And then the other thing i like is brady wont turnover personal emails. Brady. Tom brady. Oh. Im just saying thats pretty bad. To not turnover your personal emails during an investigation or any of your phone records. But these news organizations are getting him for the same hes she might get a four game suspension. He can run for president and get the democratic nomination but he cant play in the first four games. Andrew you cant disentangle all the threads in joes head. Theyre too woven together. Having sat with this man for many years i can. You got your work cut out for you. Good work. Let me just say toen cob collude on the bin laden story, i think the New York Times and Washington Post are skeptical of the hurst story and thats when you ask why havent they covered it i think thats why. I wish i had been skeptical, remember that time how could he be living so close to the Pakistani Military for so long but nobody bothered to dig into that . Thats a core failure on the part of many news organizations at the time. Coming up a big sports story with bigger money attached. Patriots Quarterback Tom Brady suspended without pay for four games. The team fined a million for deflate gate. First heres a look back at this date in history. [male announcer] if youve served in the military, certain habits may be hard to shake. For reintegration and adjustment issues big, small and everything in between, visit easter seals dixon center. Org. Jo nes. Zero, three, two, six. Here to make a deposit. [bell chime] ting i think their suspension will be reduced. Brady will probably serve 2 to 3 games. They will go down 2 or 3. The 4 i like from a tv perspective. If he serves four he comes back against indianapolis. The team that ratted him out apparently. Do you think when the commissioner hands down a penalty like this its almost a negotiation with whoever is going to arbitrate the ultimatedyultimate decision. So it would have gone down to one. I think that comes into the thinking. Thats been the history recently. I think it always undermines the power of the mission customer. But the reason this was handed down in the first place, look at the last year of what the nfl dealt with. I would be like my case was decided with all of this history in the past year that influenced goodell. I think what happened last summer with the ray rice controversy was a seminole moment for him. It was a Market Correction for nfl discipline. Is this also punishment for not cooperating . Yeah. Its clear. His cell phone. Didnt turnover the personal server. That was clearly a factor. They made it clear in other investigations they dont like stone walling and this was partially a stone wall by brady. Bob krafts response read incredibly harsh. Considering the relationship between kraft and goodell historically. He has been one of the biggest backers it stood out as being harsh. He said we are prepared to accept just about any discipline but this went even too far for us us. Does this have impact on brady as a spokesperson . Under armour . Their image . So me that is minimal. In the places he is popular, hes as popular as ever. Hes hated as much as ever. We are here in the month of may and it tells me how far ahead they are. Does that change . The kraft was a great supporter could you see the whole kingdom un unravel . It could shortterm. Theyre all in on it. They know what both sides need to do. So youre saying it was no its not as board of directors as boxing. At least football and hockey the puck bounces around. You cant plan everything. Crucial to all of this theres still no doubt that they would have won otherwise, right . Theres no doubt about that. If that was if there had been doubt, if there was any doubt that would have been whoa. Theres no doubt about that particular game however the fact of the matter is this had been going on for awhile. Everybody wants him as down every quarterback would probably say i want it down to the minimum