This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Best of Kass

Stocks in this article: AAPL FXI

On the negative side, the turn in China's economy likely reduces the odds of further monetary easing anytime soon.

On any weakness in iShares FTSE/Xinhua China 25 Index Fund (FXI), I plan to add. (I initiated my long a few days ago.)

And in the Eurozone

The euro area composite (manufacturing and services) flash index for November was released Thursday morning. The index was 45.8 vs. expectations of 45.7 and October's 45.7. The manufacturing sector was strong, with that component lifting by 0.7 points in November, and the service component was modestly weak, declining 0.3 points. The improvement in the manufacturing component was broad based, as the employment/new orders/production metrics all increased in November.

As I pointed out a week ago, the euro area composite index has been about flat since April. Despite the hyperbole, the region's economy is contracting at a very modest pace, and the weakness is no longer accelerating. The November composite index is consistent with quarter-over-quarter real GDP growth of minus-0.2%, in line with the prior few quarters.

Not great but not the end of the world either.

Bottom Line

The various purchasing managers' indices in the U.S., Europe and China are indicative of a global economy in which growth has either stabilized or is slightly accelerating. Global real GDP growth in 2012 should be about +3%, and the rate of growth in 2013 should increase very modestly from those levels.

Salient conclusions:

  • The odds of a U.S. recession are still low (despite the threat of a fiscal cliff).
  • The odds of a hard landing in China have materially diminished.
  • The rate of contraction in EU economic growth is decelerating.
  • Global economic growth will be on the order of +3%, providing a tailwind to earnings growth (my one remaining concern).
  • Weak earnings growth will be somewhat countered by global easing, insuring that excess liquidity provides a cushion to downside in risk assets.

At the time of publication, Kass was long FXI.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

2 of 2

Select the service that is right for you!

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
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,574.57 +217.70 1.25%
S&P 500 2,034.30 +21.41 1.06%
NASDAQ 4,697.1520 +52.84 1.14%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs