Doug Kass fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

  • How it's full speed ahead and damn the fundamentals.
  • How the middle of the earnings season means big moves for individual names.

Click here for information on RealMoney, where you can see all the blogs, including Doug Kass'--and reader comments--in real time.


 
Riddle Me This
 
Originally published Feb. 17 at 2:12 p.m. EST
 
There is a strong and growing consensus that the rate of global economic growth will accelerate in 2017-18 and that the pivot to fiscal stimulation (in large measure because of the policy thrust of the administration) will further accelerate that advance.

It is this presumption that has fueled equity markets.

However, the fixed-income market has a different verdict.

Today the 10-year yield is 2.42% (down three basis points on the day)--the exact level it was at year-end 2016.

This despite inflationary expectations at a multiyear high.

Meanwhile, the Atlanta Fed has reduced its forecast of first-quarter 2017 to a subpar +2.2%.

Which is correct--stocks or bonds? One incorporates a quite bullish scenario for growth and profits and the other incorporates a quite bearish scenario.

As it relates to fiscal stimulation required to boost a substandard domestic economy, the point of my opener today was not to make a political statement (see mentions in the comments section--and a note to those who disagree with my observations that my investment decisions have nothing to do with my political views).

The point of my opener was to emphasize that what is happening in the White House may hinder the ability of legislation that is pro-growth to be passed.

As David Brooks wrote in The New York Times, "To get anything done, a president depends on the vast machinery of the U.S. government."

David Brooks is a conservative and in this morning's editorial he uses many of the terms that populated my opening missive this morning.

It is a worthwhile read and his remarks are worthy of consideration.

Position: None.

 
Market Bends but Doesn't Break
 
Originally published Feb. 16 at 6:00 p.m. EDT

While I was away Thursday afternoon, the market bent a bit but didn't break.

I would describe the post-noon trading hours as relatively meaningless and "uneventful."

* Bonds improved in price--yields dropping by four to five basis points. The 10-year U.S. note closed at a 2.45% yield; 2.55% seems to be a formidable yield resistance.
* Oil was marginally higher (+$0.35).
* Gold continues its ascent--up by seven beaners on the day. Gold Shares (GLD - Get Report) closed $10 higher than the price when I put gold on my Best Ideas List.
* Ag commodities retreated "bigly." I continue to disfavor ferts and ag equipment.
* Retail remains weak and, in my view, uninvestable.
* Pharma and biotech reversed yesterday's strong performance.
* (T)FANG is continuing its uneven action.
* In miscellaneous stock action:

  1. Allergan (AGN - Get Report) retreated by $3 (I highlighted the stock in my opening missive this morning). Given my negative market view, I am a $230 or lower buyer. If one is not as concerned as I, the stock might be bought at current levels.
  2. Profit-taking in Radian Group (RDN - Get Report) , DuPont  (DD) and Campbell Soup  (CPB - Get Report) .
  3. Apple  (AAPL - Get Report) held surprisingly well (at least to me).

I was quiet on the trading side. I added to my UltraShort S&P 500  (SDS - Get Report) and UltraPro Short QQQ  (SQQQ - Get Report) longs today.

I sold my S&P 500 ETF  (SPY - Get Report) puts for a push (into the modest afternoon decline) as there is only one day left until expiration.

The shorts, already worn out--seemed to have waved the white flag today. In an informal survey I conducted this morning with my hedgehogger pals, most have abandoned the dark side (certainly in individual equity shorts but also in inverse ETFs).

Position: Long GLD, SDS, SQQQ, AGN large, CPB large, RDN, DD small; short AAPL.