The Best of Kass
Among his posts this past week, Kass offered a good investment choice if you believe in a self-sustaining global recovery, provided details on why the U.S. economy is not as rosy as some think and showed how he viewed the market ahead of Friday's action.
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Originally published on Thursday, March 14 at 10:57 a.m. EST.
- If you believe in a strong, self-sustaining global economic recovery, the lagging FXI is a good long.
For those who believe in a strong global economic recovery that is self-sustaining in 2013-2015, the lagging China market makes sense on the long side.
The iShares FTSE/Xinhua China 25 Index Fund (FXI) is a good proxy for China, and it has been a significant laggard vis-a-vis the developed world markets.
I am passing, as I don't subscribe to that outlook, which, thus far, is a view that has been embraced by many these days.
At the time of publication, Kass had no positions in securities mentioned.
Originally published on Friday, March 15 at 10:09 a.m. EST.
Interestingly, bond yields are not rising in the face of a better industrial producction number for February.
I am not surprised, though, as I have been writing that the recent strength in the domestic economy should not be extrapolated.
February production rose by nearly twice the expected +0.4%, and January was revised to flat from -0.2%.
As I have been emphasizing, fourth-quarter 2012 real GDP was understated due to inventory disaccumulation.
This disaccumulation has reveresed in first quarter 2013, and we are seeing an inventory/production bounceback.