GO
Loading...

Morning Note: Accelerated Recovery or Double Dip in New Year?

Catherine Holahan of CNBC's "Fast Money"
Monday, 20 Dec 2010 | 11:13 AM ET

Will the New Year bring a more robust recovery or another recession? That’s the central debate between bulls and bears this week, with each side interpreting rising treasury yields in a starkly different manner. The bulls say bond yields near seven-month highs are a sign of economic recovery. The bears, meanwhile, assert the rising rates are a clear signal that QE2 has failed and another recession is around the corner.

Fast Money trader Brian Kelly is solidly on the bulls’ side. Kanundrum Capital’s founder maintains that the rise in the dollar index and bond yields is evidence that investors believe U.S. economic growth is accelerating. “Our view is that bond yields are rising because the market is correctly anticipating stronger economic growth,” Kelly said in an email.

>Halftime: Small Sign Of Trouble Emerging?
>
Jon Najarian: Icahn Raising Stake Creates Options Stir In This Name

Kelly maintains that positive consumer data supports his case. The Leading Economic Indicator Index released last week showed that economic activity was the strongest since the first quarter of this year. Early holiday retail sales also beat many forecasts, indicating that the consumer is healthier than many anticipated.

His view is supported by recent GDP raises by several prominent economists. Michael Feroli, JPMorgan Chase’s chief U.S. economist, raised his GDP forecast to 3.5 percent from 2.5 percent last week. A Wall Street Journal survey released Dec. 13 found that 55 economists had raised their projections for gross domestic product.

The test of the bulls’ case may come on Wednesday when the U.S. will GDP estimates.

For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On December 20, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Zachary Karabell Owns (AAPL), (GOOG), (IBM), (GS), (C), (CSCO), (FCX), (RIMM), (FXI), (GE) and (BRCM). Jon Najarian owns (IBM), is short (IBM) calls. Jon Najarian owns (GS), is short (GS) calls. Jon Najarian owns (JPM), is short (JPM) calls. Jon Najarian owns (CME), is short (CME) calls. Jon Najarian owns (CBOE), is short (CBOE) calls. Jon Najarian owns (V), is short (V) calls. Jon Najarian owns (PCX), is short (PCX) calls. Jon Najarian owns (MEE), is short (MEE) calls. Jon Najarian owns (CHK), is short (CHK) calls. Jon Najarian owns (FCX), is short (FCX) calls. Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MHY). (NDAQ), (PFE), (PRST) and (S).

GE is the parent company of CNBC
NBC Universal is the parent company of CNBC

Checking Gartman and Tilson SOT's for disclosures

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (AKAM)
Accounts Managed By Kanundrum Capital Own (JEF)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (SWC)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Own (CLF)
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short The Euro

ZACHARY KARABELL
River Twice Capital Owns (CSCO)
River Twice Capital Owns (GS)
River Twice Capital Owns (MSFT)
River Twice Capital Owns (MA)
River Twice Capital Owns (FDX)
River Twice Capital Is Short (SMH)
River Twice Capital Is Short (SPY)
River Twice Capital Is Short (QQQQ)
River Twice Capital Is Short (XLF)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (AMGN)
Stuart Frankel & Co and its partners own (BP)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GE)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (OPEN)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (TLM)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UNM)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

ALEX HAMILTON
Hamilton has no disclosures.

CHRIS BRENDLER
Stifel, Nicolaus & Co. Is A Market Maker In (ADS), (CBOE), (AXP), (DFS), (NYX), (V), (CME), (CIT), (MA), (ICE), (COF), (NDAQ)
Stifel, Nicolaus & Co. Expects To Recive/Seek Investment Banking Compensation From (ADS), (NDAQ) In Next 3 Months

WHITNEY TILSON SOT
Funds Managed By Whitney Tilson Were Short (NFLX) On 10/29/10

DENNIS GARTMAN SOT
There were no disclosures on 12/1/2010


CNBC.com with wires.

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report