Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.
My Takeaways and Observations
Originally published Dec. 1 at 5:48 p.m. EDTWhat a strange day -- maybe even ominous.
Closed-end muni bond funds and more.
- The U.S. dollar weakened.
- The price of crude oil rallied for a second day in a row, rising $1.50 to almost $51.
- Gold flat, no bounce.
- Agricultural commodities: Wheat up $0.07, corn down $0.05, soybean unchanged, oats up $0.05.
- Lumber up $1.
- Bonds got schmeissed but traded well off the day's lows (as the 10-year yield touched 2.5%).
- The 10-year and long-bond yields rose by 9 basis points.
- The 2s/10s spread rose by another 5 basis points to 130 basis points.
- Muncipals were lower.
- Junk bonds got hit badly, despite the rise in crude oil.
- Blackstone / GSO Strategic Credit Fund (BGB - Get Report) rose $0.08.
- Banks were powerful to the upside. I reshorted at reasonably good prices in the afternoon, after covering my small rental shorts in pre-market trading earlier.
- Insurance stocks flew. Long Hartford Financial (HIG - Get Report) , which rose.
- Brokerages so strong--Morgan Stanley (MS - Get Report) and Goldman Sachs (GS - Get Report) (up $7).
- Retail was strong led by Target (TGT - Get Report) , Foot Locker (FL - Get Report) , Nike (NKE - Get Report) and JC Penney (JCP - Get Report) (long).
- Autos were the "world's fair." I still have tag end short positions. I expect the upside move to get over-done short term, and I will reload on the short side.
- Energy stocks up, but small relative to the commodity.
- Old tech was clobbered. International Business Machines (IBM - Get Report) , Intel (INTC - Get Report) , Cisco (CSCO - Get Report) (short and working nicely) and Microsoft (MSFT - Get Report) got bashed along with the entire sector.
- Biotech was down 2%. Allergan (AGN - Get Report) and Gilead Sciences (GILD - Get Report) were weak. New lows Vertex Pharmaceuticals (VRX) . Spec weak again Portula Pharmaceuticals (PTLA - Get Report) , Sage (SAGE) , Intrexon (XON - Get Report) , FibroGen (FGEN - Get Report) , ACADIA Pharmaceuticals (ACAD - Get Report) .
- Big pharma hurtin' badly, once more. Merck (MRK - Get Report) , Bristol-Myers Squibb (BMY - Get Report) and Eli Lilly (LLY - Get Report) being liquidated, much like tech.
- Media mixed message. Disney (DIS - Get Report) lower.
- Ag equipment: Deere (DE - Get Report) up large on an upgrade, though Caterpillar (CAT - Get Report) still experiencing weak fundies.
- Consumer staples broadly lower. Campbell Soup (CPB - Get Report) excelled on a relative basis, though.
- (T)FANG a source of funds. Tesla (TSLA - Get Report) , Facebook (FB - Get Report) , Amazon (AMZN - Get Report) and Alphabet (GOOGL - Get Report) a collective mess.
- In individual stocks: DuPont (DD - Get Report) , new high. Radian (RDN - Get Report) up another up 2%. Oaktree Capital (OAK - Get Report) not so mighty. Apple hit.
1. Jim "El Capitan" Cramer on " Not What Bulls Wanted to See ."
2. "Meet" Brett Jensen on rotation.
3. Tim "Not Judy or Phil" Collins.
4. What happens when this extreme rotation ends? from Rev Shark.
5. And another from Rev Shark.
Short SPY, TLT small, KO small, DIS small, AAPL large, CSCO, CAT small, SBUX small, C small, BAC small, JPM small, GM small, F small.
As well, DoubleLine's Jeff Gundlach just announced he sees a top in the equity market and a high in yields/rates by January inauguration.
This could precipitate the "island reversal" in bonds and financials that I mused about earlier in the day.
I underscore Jim "El Capitan" Cramer's thoughtful comments and, by contrast, I reject the universal optimism I watch in the business media.
Finally, with stocks at their day's lows -- the decline seems to be accelerating -- a good thing for the ursine crowd and for our Trade of the Week (short IWM calls and long IWM puts).