Time for a bit of trading fun. 

We've witnessed a flight to safety over the past week as the emerging markets have been submerging. That flight only accelerated on Tuesday in the shadow of the rapidly deteriorating Italian debt crisis, sending the 10-year U.S. Treasury yield down some 16 ticks to about 2.77%. 

First, some broad observations:

  • The Italian crisis will likely result in a downgrade of global economic growth.
  • Global interest rates (and monetary policy) will stay lower for longer.

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  • The U.S. dollar will likely continue to be strong, putting 2018-2019 earnings forecasts for S&P 500 undefined companies under some pressure because multinationals with strong export businesses predominate the index.
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And as for specific sectors and stocks, what I foresee is:

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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.