DOUG KASS: Stocks Will Hit Their High For The Year By The End Of This Week

Legendary investor Doug Kass of Seabreeze Partners thinks that by the end of this week, investors will see the top in the S&P 500 for the rest of the year.

In his "15 Surprises for 2013," published today on TheStreet.com, Kass writes:

Once again, the bullish consensus is tightly grouped with the expectation that the S&P 500 will close the year at 1550-1615 (up from 1425 at the close of 2012) and that the 10 year U.S. note yield will trade at 2.50% or higher (up from 1.80% at the close of 2012).

These consensus views might prove too optimistic on stock prices and too pessimistic on bond prices. I believe that the U.S. stock market will make its 2013 high in the first two weeks of January, be in a yearlong range of 1275-1480 and close the year at 1425 and that the 10-year U.S. note will be below 2.00% in the first six months of 2013.

Kass cites the following reasons for his bearish outlook:

• No meaningful spending or entitlement cuts will be made;
• Unsustainable and diminished value of fiscal and monetary policy;
• An aging recovery and aging stock market;
• Investment narrative shifts to the earnings cliff and to the end of profit margin expansion;
• A market that starts the year at reasonable if not high valuations relative to headwinds;
• Full-year estimated S&P 500 range of 1275-1480 with a close of 1425; and
• Fade (sell/short) early January stock market strength.

Yikes.

Read the rest at TheStreet.com >

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