Allergan, Starbucks, Citigroup: Doug Kass' Views - TheStreet

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Increasing SPY, SBUX Shorts, AGN Long

Originally published Jan. 27 at 2:34 p.m. EDT

I have materially increased my SPDR S&P 500 ETF Trust ( (SPY) - Get Report ) short in this trading session.

I have also added to my growing Allergan ( (AGN) - Get Report ) long Friday morning and to my Starbucks ( (SBUX) - Get Report ) short Friday afternoon.

And it's a good day for my Ford ( (F) - Get Report ) / General Motors ( (GM) - Get Report ) pairs trade.


Note: Ford was raised to Outperform by RBC Capital this morning (with a $14 price target).

Position: Long AGN, F; short SPY, SBUX, GM.

My Takeaways and Observations

Originally published Jan. 26 at 4:08 p.m. EDT

"The Dow hit 20,000 and I am proud of it ... Now we have to go up, up, up. It's gone up a lot since I won. We hit a number that has never been hit before. So, I am very honored."
--President Donald Trump, ABC interview Wednesday night

If the market craters, will the President take responsibility? Raise your hand if you think he will... I thought so--no hands.

Another win for the bulls as Mr. Market traded well in light of the magnitude of the recent advance.

At 3:45 p.m. near the day's low--but not much movement.

I am getting this out early because there is a lot of EPS announcements to digest after the close.

I re-established my long in ProShares Trust UltraPro Short QQQ ETF (SQQQ) - Get Report and added to it.

Dow 20,000: So What?

I remain a Midnight Rider.

Housing hits a speed bump--and Hanson called it.

My plans for the yellow metal.

Sears on the brink.

Auction action.

Radian ( RDN) EPS in line, more in the next or two.

  • The U.S. Dollar strengthened.
  • The price of crude oil rose by over one dollar to $53.78/barrel.
  • Gold fell by -$8.60 to $1189.
  • Ag commodities: wheat +2.50, corn -2.50, soybean -7 and oats -5.5.
  • Lumber increased by $1.50.
  • Bonds rallied in price after an early morning spill. Yields dropped by two basis points.
  • The yield curve was flat.
  • Municipal bonds were flat, as were closed end muni bond funds.
  • Junk was unchanged, Blackstone/GSO Strategic Credit Fund  (BGB) - Get Report down $0.03.
  • Banks prospered, though Citigroup  (C) - Get Report was lower.
  • Insurance was mixed after a Metlife  (MET) - Get Report downgrade.
  • Brokerages solid, led by GS (short and on Best Ideas List).
  • Big pharma continues out of favor after large downside at Bristol-Myers (BMY) - Get Report . Johnson & Johnson (JNJ) - Get Report continues weak, after M&A announcement.
  • Retail continues to underperform and the possible 20% tariff from Mexico (that Sean Spicer just mentioned) won't help. Nor will the possibility of a Sears (SHLD) bankruptcy (plenty of discounted merchandise could cause some indigestion over the next few months.
  • Old media was mixed, awaiting Microsoft (MSFT) - Get Report EPS this afternoon.
  • Biotech continued its fade led by Allergan (AGN) - Get Report , Celgene (CELG) - Get Report and Gilead Sciences  (GILD) - Get Report . Speculative biotech also got hit.
  • Consumer staples faltered despite the currency weakness. Campbell Soup (CPB) - Get Report and Procter & Gamble (PG) - Get Report lower, along with Coca-Cola  (KO) - Get Report (which seems to have gathered some technical bulls lately -- I remain short, small).
  • Comcast  (CMCSA) - Get Report led a stronger media group. Up on EPS and buyback.
  • Autos clobbered by possibility of Mexican tariffs and more pressure to manufacture in the U.S.
  • Home builders a bit higher, but well off the highs after the weak new home sales report.
  • Ag equipment was lower after weak guidance from Caterpillar  (CAT) - Get Report .
  • (T)FANG mixed after recent strong absolute and relative performance. Alphabet  (GOOGL) - Get Report (pre EPS) and Tesla  (TSLA) - Get Report lower.

Here are some value-added contributions on our site today:


1. Jim "El Capitan" Cramer on how far we have come.

2. Ed Ponsi "scheme" invokes Madonna!
3. Dan Dicker does Goldman Sachs (GS) - Get Report . (I respectfully disagree with his conclusion on Dodd-Frank)
4. Mike Norman pounds it.
5. Tim "not Judy or Phil" Collins on missing out and fear.


Positions --
Long: HIG large, CPB large, RDN, SQQQ small, SDS

Short: SPY, QQQ, IWM small, CAT, MET, GS small, C small

Position: See above.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AGN, GOOGL, SBUX, CMCSA and C.