This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Kass: My 'Fast Money' Recap

This column originally appeared on Real Money Pro at 9:18 a.m. EDT on April 26.

NEW YORK (Real Money) -- It was a fun segment with Scott Wapner, who subbed for Mel last night on "Fast Money."

Let's go straight to the tape!

At the start, I reminded everyone that when discussing the markets on "Fast Money" during the first week of April, I suggested that we faced a correction of about 5%.

At the low on Monday, we got close to that loss.

What makes me more constructive now is that we have had a panoply of concerns but the market has only bent it has not broken. Some of the obvious concerns include an economic contraction in Europe, an Italian and Spanish debt crisis that shows few signs of stabilization, renewed questions regarding austerity in the EU as a solution to its fiscal woes, a potentially upsetting French presidential victory by Fran├žois Hollande, a cut in the outlook for India's sovereign debt, a sudden and ominous drop in the yield on the 10-year U.S. note (from 2.38% to close to 1.90%), and a technical breakdown in the S&P 500 under important technical moving averages.

It's important to remember that, at times, it is how stocks react to news that is sometimes as important, or more important, than the news itself.

So I have concluded that the correction in April has discounted the known economic and market headwinds that I fretted about nearly a month ago on the show. (Interestingly, AAII reports this morning that investor sentiment remains sour (a contrarian signal) with bulls 27.6 vs. 31.1 and bears 37.4 vs. 33.8.)

But it's not just price action that is bringing us back to the land of the living (at least from an investment sense). It's also that:

  1. Overall earnings and forward guidance have been far better than I (and others) have expected. In fact, the earnings beat thus far in the first quarter is almost 600 basis points above consensus. This is serving to offset the squishy macroeconomic releases.
  2. Since we operate in the NBA -- nothing but Apple (AAPL) -- market, Apple remains a pivotal stock and an important contributor to aggregate corporate profits, and its blowout results cannot be overstated in consequence and effect on investor sentiment.
  3. The general concerns regarding domestic economic weakness might have been overstated -- my baseline expectation of a muddle-through 2% real GDP trajectory is now looking low, as first-quarter 2012 real GDP is trending close to 3% and second-quarter 2012 real GDP is tracking at around 2.5%.
  4. And I am looking at the bond market, which today went down on a weak durables number, which follows other ambiguous economic releases. This means that the important reallocation out of bonds and into stocks might have already started. It could be a powerful catalyst for equities.

From my perch, the U.S. stock market might now be heading back to new yearly highs.

To be sure, the ascent may be uneven, and the move higher could resemble more of a grind than a swift rise.

Scott asked me where I would put money to work and why financials have been underperforming.

I responded that banking industry net interest margins were squeezed in the first quarter by an across-the-board reduction in bond yields -- something I see reversing in the months ahead (as central to my thesis is a durable multiyear recovery in the residential real estate market).

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
Back to Nasdaq


DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs