NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among the posts this past week were items about whether the economy is in a recession and signs of a market topping process.
Please click here for information about subscribing to RealMoney Pro.
The U.S. Economy Is Not in a Recession
I have respectfully (and strongly) disagreed with Roger Arnold on his assertion that the U.S. economy is in recession on Columnist Conversation. All the high-frequency economic data point to an above-2.5% second-quarter 2014 real GDP print. Another example today is the manufacturing ISM, which came in at 54.9, slightly better than 54.3 expectations and above the March number of 53.7. The beat was driven almost entirely by the employment gauge, which was up from 51.1 to 54.7. New orders were flat, production was basically flat, inventories inched up very slightly, and backlogs declined from 57.5 to 55.5.
Short in May and Go Away
Originally published on Wednesday, April 30, at 7:44 a.m. EDT.
- As at previous market tops, signs of bubbles and excess speculation are ubiquitous.
- Market leadership is changing, consistent with two other periods that presaged market corrections (1972-1973 and 1999-2000).
- Bank stocks are typically a good market bellwhether, and they are falling both absolutely and on a relative basis in 2014.
- Bullish investor sentiment remains elevated and overly optimistic. (Note: Investors Intelligence bulls remain at about 50% while bears have only risen from 15% to 21%.) The buy-on-the-dip mentality continues to be the overriding investment mantra, with few expecting a serious decline.
- Market participation has narrowed this year while the overall averages have climbed, a classic technical divergence.
- Bears are an endangered species after dealing with a five-year period of ever-rising stock prices. There are no (except for perma-bears) emboldened bears out there now, because their ranks have been diminished. As a result, there is no apparent market cushion provided by the ursine cabal.
At the time of original publication, Kass was short TSLA.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV