Strategic investor Doug Kass tells us he just paid $13 for the XLF . He thinks banks can rally a quick 10-15 percent. The selling is overdone, he says.
”I can see where Doug’s coming from,” adds Fast trader Brian Kelly. “They have gotten beaten up so much.”
When Kass and Kelly say overdone and beaten up, they’re not kidding.
For the month the Bank ETF is more than 10% lower. And that kind of pullback is hardly unique to the banking sector. Over the past month or so, investors have punished many, many stocks; consumer discretionary names have slipped about 10% and industrials are down more than that.
”Across asset classes there’s a bear market in risk,” muses trader Brian Kelly.
Largely all the selling is tethered to concerns that the US may be slipping back into recession. The funny thing is -- someone forgot to tell Corporate America.
Companies from Deere to Target reported better than expected results. And Staples CEO Ron Sargent says "I'm not an economist at all but from what I see we have no chance at another recession... I don't have any worries about a double-dip at this point."
Nonetheless stocks rolled over on Wednesday, providing a catalyst for Doug Kass to hit the buy button. Are the market’s concerns about a double dip over done – should you buy when so many others are fearful?