Change in Equity Market Character: Doug Kass' Views

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.

Position: Short TLT.
 
Originally published Nov. 15 at 6:18 p.m. EST
 
Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings. This week he blogged on:
  • How he is bewildered by the market's behavior
  • How Elon Musk is a rolling stone

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

 

 

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