Top’s In—Doug Kass Explains Why

I continue to believe that a 2018 high in the S&P Index was possibly reached in late January (call it “Peak Hope”) and will not be eclipsed for the remainder of the year. More importantly, I believe the market is now fully priced and vulnerable to much more downside than upside…..At the core of my near term concern are the deterioration (and worsening rate of change) in reward v. risk, the growing ambiguity of the trajectory of global economic growth, the pivot in monetary worldwide monetary policy, the likelihood of a steady move higher in short term interest rates (and a higher risk free rate of return), evidence of a loss of any fiscal responsibility (on the part of Democrats and Republicans), expanding policy risks in part based on the behavior of our President, the possibility of a “Blue Wave” in November and the evolution of a one sided (long) market structure (and a rising role of FAANG stocks).