NEW YORK (Real Money) -- 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.
This past week, Kass had a lot to say about the pending flattening of the yield curve, unpleasant times ahead for Greece, and what he suspects will be the next "black swan" event to pummel the markets.
Is the Yield Curve Steepening Over?
Originally published June 24 at 10:12 a.m. EDT
If so, the run in bank stocks may be in jeopardy.
The chart between the five-year U.S. note and 30-year U.S. bond steadily has increased over the last few months to 1.48%.
A Fed rate hike, as suggested by myself in the past and by Peter Boockvar this morning, could result in a flattening of the yield curve. In turn, this could result in some concern that net interest margins and income may not recover as quickly as some expect.
For now this concern is forward-looking in a market that is oriented to the short term (and is providing the great momentum for bank stock share prices).
Prudence would indicate, as I also have warned, that the near-15% advance in money center and regional bank stocks might stall in the months ahead.
While I am keeping all of my bank stocks on my Best Ideas List and within the context of my cautious market view (I am adding to my Direxion Daily S&P500 3X EFT, SPXS, this morning), I am taking a bit more off the table in the group this morning.