Here are Doug Kass' top thoughts on some of the biggest stories of the week.
Trouble in the Credit Markets
"Just one more thing."
-- Lt. Columbo
The bond market closed at its highs. (iShares Barclays 20+ Yr Treasury Bond ETF (TLT) +$1.44).
The 10-year U.S. note yield dropped by six basis points -- the yield is right on 2.32% support.
The long bond fell by seven basis points and the 2s/10s curve contracted by five basis points, closing at its year's low of 65 basis points.
This is not a friendly development for asset sensitive financials -- nor is it an economically friendly event.
If I am correct that domestic economic growth is slowing, with elevated valuations, withdrawal of the liquidity spigot by the Federal Reserve, rising inflation and elevated bullish investor sentiment -- stocks could have a long way to go on the downside.
I continue to view the character of the equity market as changing.
Depending on one's risk profile/appetite, a defensive position should be considered as an option.
- How he is bewildered by the market's behavior
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