Closing Volume

- NYSE volume flat with its one-month average

- NASDAQ volume 4% below its one-month average

- VIX index: down 2.94% to 14.51

Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

Happy New Year!

Thanks everybody for reading my Diary today, all week and for the last 28 years.

I hope my input has been value added.

Enjoy the weekend.

Be safe.

 I shorted  (GRNY)  at $24.99.

Here are my disclosed longs:  (KMB) ,  (PG) ,  (PEP) ,  (NKE) ,  (NFLX) ,  (RACE) ,  (JOE) ,  (UNH) ,  (AMZN)

Here are my disclosed shorts:  (CVNA) ,  (PLTR) ,  (SNBR) ,  (CHGG) ,  (RICK) ,  (MPW) ,  (JOET) , FXLV,  (WOOF) ,  (RILY) ,  (ZM) ,  (JPM) ,  (MS) ,  (SHAK) , FRHC,  (MSTR) ,  (GS) ,  (FIGS) ,  (CRWV) ,  (GRNY)

I have not seen much about the debt rollover issue.

Yellen was among the worst Treasury Secretaries ever.

A third grader knows when rates are 0%, you borrow long. She kept issuing short-term debt as opposed to going out on the curve. Now that debt is due, and it will have to be refinanced at higher rates. Data below may not be perfectly right, but directionally correct. With all the tax breaks kicking in this year, even in a good economy the U.S. will have to issue about $2.5 trillion in new net debt. Foreigners own about 1/3 of the U.S. federal debt as well.

Around one-third (about $9 trillion or more) of the U.S. marketable debt is projected to mature in 2026, requiring significant refinancing, often at higher interest rates, creating a substantial "maturity wall" due to heavy short-term borrowing during the pandemic. This means the government must find new buyers for these maturing Treasury securities to avoid a significant spike in borrowing costs and potential market instability.

Key Figures & Details

• Volume: Estimates suggest over $9 trillion in U.S. marketable debt will mature in 2026, with some sources citing figures as high as $9.2 trillion or even $8 trillion that needs rolling over.
• Proportion: This represents roughly one-third of the total publicly held marketable debt.
• Context: This surge is a consequence of the U.S. issuing large amounts of short-term debt (like T-bills) during the pandemic when rates were near zero, which are now coming due.
• Interest Rates: These securities will need to be refinanced at significantly higher interest rates (potentially 3-4% higher), increasing the government's debt servicing costs.

Why it Matters

• Refinancing Challenge: The Treasury must attract investors to buy these new bonds, competing with other market forces and potentially higher yields, to avoid disruptions.
• Increased Costs: Higher rates on this massive volume of debt will substantially increase annual interest payments, adding pressure to the federal budget.

Today is the first day in history without Warren Buffett at the helm of Berkshire Hathaway. I have written more than 100 columns on Berkshire over the last two decades. Today, I want to look back and give a special thanks to Buffett for the greatest invite I have ever received. And I want to look ahead.

"I am going to Disneyland - I mean, Omaha! I will be Daniel in the Lion's Den, wading in a sea of Warren Buffett's strongest admirers."

- Buffett Picks Douglas Kass as His 'Bear' for Annual Meeting - The New York Times

I was named "the credential bear" by Warren Buffett in 2013 and shared the dais with him and Charlie Munger at Berkshire Hathaway's Annual Meeting that same year. Buffett assigned me to ask hard-hitting questions. I did, but at the same time I was respectful in my delivery. 

You can read about my adventures here:

* How Doug Kass Became Buffett's Bear

* My Pilgrimage to Warren Buffett's Omaha

* Nerves and Steaks in Omaha

* Conversing With The Oracle

In preparing for the meeting, I had researched heavily both Berkshire and "The Oracle" to come up with thoughtful, unique and differentiated questions that had never been asked of Charlie and Warren. This was not easy, as that history has been combed over in multiple books over the years.

Looking ahead, Buffett is a plain speaking man, so I will summarize my expectations of "Berkshire Without Buffett" in simple terms:

* Going forward, the Berkshire imprimatur (on their investments) and "halo" have been reduced in stature.

* The attraction of a company selling to Berkshire (without Warren Buffett "in control") has also been lessened.

* I expect Berkshire's estimated $380 billion in cash to be more likely to be employed in the purchase of companies and not for investing in companies.

Warren Buffett leaves Greg Abel with a fortress balance sheet and a solid and diversified revenue and profits base.

The biggest hurdle Greg Abel faces is the same one that I have expressed in the past, including at my 2013 Annual Meeting appearance. It's also one that Warren Buffett faced in the last decade. Berkshire Hathaway is too big to materially outperform overall U.S. corporate profits and too big to significantly outperform the S&P Index. 

This commentary was orginally posted in Doug's Daily Diary on TheStreet Pro.

At the time of publication, Kass had no positions in any security mentioned. 

Remember when talking heads said the December seasonality would be reinforced by corporate buybacks?

Challenge:

Software/consulting/security are death ( (CRM) ,  (ADBE) ,  (ACN) ,  (CRWD) )

Based on my experience watching (and reading) the business media the most over-owned equities are  (GS) ,  (C) ,  (UBER)  and  (AMZN) .

This would give me pause...

Scott Galloway's "No Mercy No Malice"... Slow Dopa. Slow Dopa | No Mercy / No Malice

Wolf Street howls about the downturn in Tesla unit sales: Tesla’s Deliveries Plunge, Worst Q4 since 2022. Annual Sales Drop for 2nd Year. Cybertruck now a Failed Model | Wolf Street

- NYSE volume flat to its one-month average;

- Nasdaq volume 13% below its one-month average;

- VIX index: up 2.21% to 15.28

On Tuesday (as posted) I reshorted  (PLTR)  (now -$6 on the day) at much higher prices.

I added to the short today.

With S&P cash now up by only 16 handles (a sharp drop in the last several minutes) I have taken off my short index calls for a nice profit.

I have converted my short index common to short Index calls.

As I suggested (that litigation lies ahead) on cannabis' rescheduling. 

Adding back to Index shorts with S&P cash +45 handles:

*  (SPY)  $686.28

*  (QQQ)  $621.52

I am also adding to longs:  (KMB)  $100.32 and  (PEP)  $142.60.

From Peter Boockvar:

What has really stood out to me over the past two weeks

I wish for you a happy and healthy 2026 and let’s get this started.

Full disclosure, we did trim some of our silver position last week due to the vertical move. My readers know we’ve been long and bullish precious metals for the last bunch of years.

With the stock and bond markets chopping around over the last two weeks, the biggest market behavior that really stood out to me was the strength in the Chinese yuan which is now trading at the highest level vs the US dollar since May 2023. It’s higher for the 9th day in the past 10. Keep in mind that this is a loosely pegged currency with a band that when it moves it’s mostly because the Chinese government wants it to in a particular direction. It’s thus clear that this strength is both tolerated and wanted likely due to their desire to address their $1 trillion trade surplus and give their consumers more purchasing power.

What this move also does, assuming it lasts, is give me more confidence that 2026 will be another year of US dollar weakness and that will now spread more to the Asian currencies which weren’t up as much vs the US dollar in 2025 relative to the euro, pound and other European and Latin American currencies. See the chart below of the Bloomberg Asia Dollar index where 46% is in Chinese yuan, followed by allocations to the South Korean won, Singapore dollar, Indian rupee, Taiwan dollar, Thai bhat, Malaysian ringgit, Indonesian rupiah, etc...

If I’m right about a broadening of dollar weakness, our position in local currency emerging market bonds should do well as should international stocks, again which we know had a big outperformance year in 2025. What could also happen is long term US interest rates could inflect higher again as foreign fund flows avoid a weaker US dollar and the same can occur with foreign buying of US stocks. Foreigners continued to maintain a strong pace of US stock buying in 2025 but did so with a heavy pace of dollar hedging relative to prior years.

By the way, the Bank of Korea Governor Rhee today expressed his unhappiness with the weak Korean won. He said “While it is difficult to identify a precise appropriate exchange rate level, the recent rise into the upper 1,400s appears to be substantially misaligned with our economic fundamentals.” A rise means weakness vs USD. We know too there is growing pushback within Japan to the weaker yen and the Indonesian central bank has kept rates high to help stem the weaker rupiah.

Offshore Yuan over past 2 years (the lower it goes, the stronger it is vs the USD)

Offshore Yuan over past 4 years

Bloomberg Asia Dollar Index (the higher it goes, the stronger Asian currencies are vs USD)

As you’ve read, from day 1 I’ve argued that it made no sense for us to tariff imported goods that we don’t and will never make in the US. I’m thus encouraged to continue to see that realization being addressed as I read a few days ago that US tariffs on upholstered furniture, kitchen cabinets and vanities will be postponed until January 2027 (and hopefully again as we approach it). For perspective, since March 2025 thru November 2025, furniture & bedding prices are up 3.2%, while kitchen & dining room furniture prices are higher by 4.5% according to the CPI data. This tariff move follows the reduction in tariffs in bananas, coffee and other items that we have no choice but to import. Hopefully we get more of this, like removing tariffs on imported sneakers and apparel that we will never make in the US.

This is what Gary Friedman, the CEO of RH, said back in September on their quarterly call:

“Tariffs, tariffs, and the possibility for more tariffs. Just when you might have thought the tariff conversation was complete, the announcement of a new furniture investigation and the possibility for additional furniture tariffs, on top of existing furniture tariffs, and incremental steel and aluminum tariffs were introduced with the goal of restoring furniture manufacturing back to America. We believe most in our industry hope that this investigation surfaces the difficulty of that task, as current manufacturing for high quality wood or metal furniture does not exist at scale in America.”

“It would require years of investments in building the facilities and workforce that most in this industry cannot afford to make. Not to mention the significant inflation that we believe will start to become evident in the second half of this year and accelerate into 2026 and beyond.”

“While strong brands like ours will benefit from the likely dislocation and consolidation more tariffs will have on our industry, many smaller companies will have difficulty surviving these levels of tariffs. Additionally, more tariffs on furniture could also result in US manufacturers moving production from the US to countries closer to their international clients, avoiding freight costs and the likelihood of counter tariffs.”

“God forbid they throw another tariff on furniture. I mean, like someone has got to come talk to us. Talk to me. Call me. I run the biggest luxury home brand in the world. Somebody call me and ask me what I think because it’s not really us I worry about. I don’t want to win because 50% of our competitors who are really good, hardworking people get wiped out. You lose 15% of the people that are presenting at High Point Market or Las Vegas Market, those markets will shut down. They’ll be bankrupt. I really don’t think anybody is thinking about the math.“

I bolded for emphasis, and I guess someone called and spoke to Gary Friedman.

Ahead of the December US ISM manufacturing PMI on Monday, we got a bunch of PMI’s overseas and the ones in Asia all are now back above 50 except in Japan.

South Korea 50.1 vs 49.4

Taiwan 50.2 vs 48.8

Vietnam 53 vs 53.8

Indonesia 51.2 vs 53.3

Malaysia 50.1 vs 50.1

Philippines 50.2 vs 47.4

Australia 51.6 vs 51.6

Japan 49.7 vs 48.7

China 50.1 vs 49.9

The Eurozone remains a different story with its final manufacturing PMI at 48.8 vs 49.6 in November. The UK PMI was 50.6 vs 50.2 in the month before and that happens to be the highest since September 2024.

I continue to find some of the cheapest stocks in the world domiciled in the UK, particularly the energy stocks. As a whole, the FTSE 100 trades at just 13x expected 2026 earnings with a 3.4% dividend yield.

I want to start the new year with a trading profit!

I have covered have of my early morning index shorts:

*  (SPY)  $684.35

*  (QQQ)  $619.60

From earlier today:

Moving Up to Medium-Sized

I am moving to a medium-sized short in the indices (5:20 AM):

* (SPY) $621.11

* (QQQ) $686.67

Position: Short SPY common (M), QQQ common (M)

By Doug KassJan 2, 2026 6:05 AM EST

Upside:

-IRWD +28% (guidance)

-SOC +19% (reportedly environmental group denied stay in legal battle, allowing restart of California oil pipeline to continue)

-BIDU +9.7% (confirms submission of HK IPO application for AI chip unit Kunlunxin)

-RH +5.3% (President Trump postponed higher tariffs on upholstered furniture)

-VRT +4.6% (Barclays Raised VRT to Overweight from Equal Weight, price target: $200)

-ONDS +4.3% (amends loan agreements to extend maturities until Jan 2026; plans company name change)

-BABA +3.8% (momentum)

-BITF +3.8% (announces complete exit from Latam with sale of its Paso Pe Site for up to $30M)

-W +2.9% (President Trump postponed higher tariffs on upholstered furniture)

-LI +2.6% (Dec vehicle deliveries)

Downside:

-OTLK -61% (gets FDA complete response letter, saying cannot approve the application in its present form for the treatment of wet age-related macular degeneration)

* Today is the first day (ever) without Warren Buffett at the helm of Berkshire Hathaway...

"I am going to Disneyland - I mean, Omaha! I will be Daniel in the Lion's Den, wading in a sea of Warren Buffett's strongest admirers."

 - New York Times Interview Buffett Picks Douglas Kass as His 'Bear' for Annual Meeting - The New York Times

I was named "the credential bear" by Warren Buffett and shared the dais (with him and Charlie Munger) at Berkshire Hathaway's Annual Meeting over a decade ago. Warren assigned me to ask hard-hitting questions. I did, but at the same time I was respectful in my delivery. How Doug Kass Became Buffett's Bear

* My Pilgrimage to Warren Buffett's Omaha

* Nerves and Steaks in Omaha

* Conversing With The Oracle

A special thanks to Warren for the greatest invite I have ever received.

In preparing for the meeting, I researched heavily both Berkshire and The Oracle in order to come up with thoughtful, unique and differentiated questions that had never been asked of Charlie and Warren. This was not easy as that history has been combed over in multiple books over the years.

I have written more than 100 columns on Berkshire over the last two decades on TheStreet Pro.

Warren is a plain speaking man so I will summarize my expectations of "Berkshire Without Buffett" in simple terms:

* Going forward, the Berkshire imprimatur (on their investments) and "halo" have been reduced in stature.

* The attraction of a company selling to Berkshire (without Warren Buffett "in control") has also been lessened.

* I expect Berkshire's estimated $380 billion in cash to be more likely to be employed in the purchase of companies and not in the investing in companies.

Warren Buffett leaves Greg Abel with a fortress balance sheet and a solid and diversified revenue and profits base.

The biggest hurdle Greg Abel faces is the same one that I have expressed in the past (including at my 2013 Annual Meeting appearance and one that Warren Buffett faced in the last decade — Berkshire Hathaway is too big to materially outperform overall U.S. corporate profits and too big to significantly outperform the S&P Index. 

Bonus —Here are some great links:

Buffett Exits Stage Left 

What Worked in 2025

Patterns Worked Again

Geeking Out on Charts

2026 Bull Market Case Increases

I am moving to a medium-sized short in the indices (5:20 AM):

*  (SPY)  $621.11

*  (QQQ)  $686.67

I entered the new year flat the indices.

That didn't last long as with the S&P futures +43 handles I shorted:

*  (SPY)  $686.44

*  (QQQ)  $621.06