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GM in Reverse; December Retail Sales: Best of Kass

I have been emailing back and forth with Stephanie Link and Jim Cramer and have read their comments on the guidance. They have convinced me, and I agree that GM should be bought.

I am buying at $39.50 in premarket trading now.

At the time of original publication, Kass was long GM.

Must Read: The Grim Fairy Tale; Don't Sweat the Catcalls: Jim Cramer's Best Blogs

Parsing the Data

Originally published on Tuesday, Jan. 14 at 9:35 a.m. EDT.

Retail sales in December were better than forecast, but if we include the November downward revisions, the two months taken together are about in line.

Sales ex-autos and gasoline were higher by +0.6% vs. the estimate of up +0.3%, but November was revised down to a gain of +0.3% vs. the original print of up +0.6%.

The core measure of sales, which also takes out building materials, rose +0.7% vs. the estimate of up +0.3%, but last month was revised down -0.3%.

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Within the report, sales of electronics fell in both November and December and were very mixed at department stores. Online retailing, of course, took more share with a +1.4% increase after rising +1.6% in November. Clothing stores saw a sales gain of +1.8% after dropping -0.5% in November.

Bottom line: Because the December beat was offset by the November miss, fourth-quarter GDP estimates should not change on this number. We know from many retailers that have spoken that the holiday was extremely competitive and challenging.

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Most important, today's retail data signals that Friday's December jobs report likely exaggerated the weakness in the jobs market.

Tactically, I am considering going back  -- yesterday I bought and sold ProShares UltraShort 20+ Year Treasury (TBT) -- and taking a small TBT long rental to hedge my interest rate risk in my closed-end municipal bond fund exposure, but I have not yet done anything.

At the time of publication, Kass and/or his funds were long/short XXX, although holdings can change at any time.

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.

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