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 Jan. 19 at 4:13 p.m. EDT
I had my most active day of the year trading. It was also my most profitable.
At 3 p.m. stocks are near the day's lows
- The U.S. dollar weakened.
- The price of crude oil rose by about two bits to $51.40.
- Gold fell by $8 to $1,203. I am buyer, to replace the half position I sold soon.
- Ag commodities: wheat down $0.08, corn up $0.02, soybean down $0.05 and oats up $0.01.
- Lumber was flat.
- For the second day in a row bonds got schmeissed iShares Barclays 20+ Yr Treas.Bond ETF (TLT - Get Report) down over a beaner, again. (Good sale in fixed income last week!)
- The 10-year bond yield rose by 7 basis points to 2.46%. The long bond yield rose by 5 basis points.
- The 2s/10s expanded by 4 basis points to about 124 basis points.
- Municipals got hit and so did closed-end muni-bond funds.
- High yield was junky--but Blackstone / GSO Strategic Credit Fund (BGB - Get Report) rose by a penny. Banks continue to be sold for a second day in a row--despite much higher bond yields and lower bond prices. Crickets from financial bulls--who seem to rationalize the large move this week and lack of correlation to bonds as a random act. Our "Trade of the Week" (short C) is now down by 5.5% or $3 since the trade was discussed in my Diary.
- Retail remains for sale. But my view is that a sentiment extreme is developing.
- Insurance stocks got whacked, including fav Hartford Financial (HIG - Get Report) .
- Brokerages got hit, too. Goldman Sachs (GS - Get Report) , put on Best Ideas List last week at $242, is down to $231.
- Biotech was lower, but not materially so (Celgene (CELG - Get Report) , Allergan (AGN - Get Report) lower). However, spec biotech roiled to the downside (Intrexon (XON - Get Report) , Ziopharm Oncology (ZIOP) , Acadia Pharmaceuticals (ACAD - Get Report) , Aerie Pharmaceuticals (AERI) ).
- Autos mixed. Ford (F - Get Report) up, General Motors (GM - Get Report) down. Good for our pairs trade from yesterday.
- Ag equipment sturdy. Caterpillar (CAT - Get Report) is a rock.
- Big pharma hit with losses at Merck (MRK - Get Report) , Bristol-Myers Squibb (BMY - Get Report) , Eli Lilly (LLY - Get Report) and Johnson & Johnson (JNJ - Get Report) .
- Consumer staples lower. Campbell Soup (CPB - Get Report) trades well. Coca-Cola (KO - Get Report) is still a loser.
- Transports big upside move--based on CSX (CSX - Get Report) takeover talk.
- Media was mixed. Disney (DIS - Get Report) downside feature.
- (T)FANG held up fairly well but well off morning highs. Tesla (TSLA - Get Report) , Morgan Stanley (MS - Get Report) upgrade and Netflix (NFLX - Get Report) on sub beat. But Facebook (FB - Get Report) and Alphabet (GOOGL - Get Report) were lower.
1. Jim "El Capitan" Cramer had a bunch of good columns today, including this one on Secretary of Treasury-designate Mnuchin. I liked this one alot, as well.
4. Mike Norman has a primal scream.
5. "Meet" Brett Jensen (who will be subbing for me tomorrow) on investment strategy in the Trump Era.
Long SDS, HIG large, CPB large, F, RDN, JCP large, AGN
Favoring the Short Side in a Bigger Way
Originally published Jan. 19 at 10:19 a.m. EDT
With interest rates rising over the past few days, banks and other financials shares have been quite weak after earnings reports.
From financial bulls we hear very little about this changing correlation.
As to the market I have a large net short exposure, having added to shorts in Caterpillar (CAT - Get Report) , Apple (AAPL - Get Report) and Lincoln National (LNC - Get Report) and going longer in ProShares UltraShort S&P 500 ETF (SDS - Get Report) this morning.