Top thoughts on stocks and the markets from TheStreet's Doug Kass.

I've Moved to a Large Bond Short
 
Originally published Sept. 8 at 9:48 a.m. EST
 
By my calculus the 10-year U.S. note is now discounting 0.5% to 0.7% real GDP growth over the next one to two years. This is an unlikely print.
 
iShares 20+ Year Treasury Bond ETF ( TLT) is being mispriced too high even though central bankers hold most of the cards.
 
But I believe market forces will influence interest rates and move them gradually higher in the next year.
 
With the 10-year note yield at 2.05% -- the lowest level in 10 months -- and the long bond at 2.67%, I am moving to a large TLT short (at $129.05).

I am also putting on a ProShares UltraShort 20+ Year Treasury ( TBT) trading long at $33.30.
 
Position: Long TBT small, short TLT large
 

 
Kroger Goes on Sale After Earnings
 
Originally published Sept. 8 at 8:44 a.m. EST

Kroger (KR) meets earnings expectations but the shares are falling in premarket trading anyway, down nearly 8% as of this writing.

 
The problem is that company will hit headline consensus estimates only by reducing its 2017-18 capital expenditures by $600 million. For 2017, capex now is expected to be between $3 billion and $3.3 billion, which is lower than previously announced.
The earnings release provides a terrible narrative of the company's profit future.
No wonder Kroger no longer plans to provide secular growth projections.
Meanwhile, Kroger repurchased $1.7 billion in shares during the interim interval. This is poorly advised in light of the company's existential threat and shaky and uncertain sales and profit outlook.
Position: None.

Action Alerts PLUS, which Cramer manages as a charitable trust, has no positions in the stocks mentioned.

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