Friday, February 26, 2010

Market Updates12:42pm

· Market Update – very quiet trading in the US; sp500 flat on the day. Equities are holding the gains earned in the latter half of Thurs session but still having a touch time breaking north of the 50day MA (on the sp500 cash, which is ~1108). Flowsquiet in both directions; short termtraders dominating activity; not a ton of buyingpressure but also sellers/shorts not very active. Stocks are keying off the FX
markets again (once the euro spiked higher today on back of a Bloomberg article
talking about German state-controlled bank KfW buying Greek debt, US stocks also
caught a bid, although there wasn’t a lot of “real” buying in equities and we are back
to flat as noon passes).

· Equity Sectors – the overall sp500 is up small on the day (essentially flat); no big
sub-sector is up/down more than 1% on the week. Financials are trading inline
overall, w/large money center banks outperforming while smaller regionals weaken
(BSX in particular is lagging in bank land). Insurance is weak on back of AIG’s
earnings (AIG shares are down 7%). Health care is the best performing group (led
by THC, CVH, MYL, WLP, GENZ, CAH – broad strength in several HC sub-groups).
Tech is flattish, as some strength in hardware and software gets offset by continued
weakness in the semis (SOX off ~0.5% - the group is down >2.5% on the week).
Staples are one of the weakest groups, falling 0.5% (LO, DPS, WAG, TAP, BR’b are
underperforming). Industrials, capital goods are up ~0.3-4% and outperforming
(within cap goods, FLR falls 5% after earnings but ETN climbs ~2% after boosting
guidance at its analyst meeting).

· Best Performing sp500 stocks: IPG, GPS, THC, JDSU, EK, JPM, ODP, CVH, BIG,
· Weakest performing sp500 stocks: AIG, FLR, PCS, MWV, SWN, LSI, TER, NOVL,

· Commodities: Commodities are stronger across the board as the dollar weakens
this morning. Oil is up over $1.50, nearing $80. Natural gas is slightly higher, up 4c to
$4.80. Gold is up $7.50 to $1116. Copper is also stronger, up around 1.75% and
near its highs of the day.

· FX: USD (DXY) is off almost 0.75% and pretty much at its lows of the day. The dollar
is off 0.8% against the Euro, near its lows of the day. The dollar is up 0.2% against
the Pound, but well off its highs. The dollar is also down 0.25% against the Yen,
moving towards its lows following the existing home sales number. The Euro is up
0.5% against the Yen, near its highs of the day. Euro strength sparked in part by a
Bloomberg article talking about German state-controlled bank KfW buying Greek
gov’t bonds. Also there is speculation that Greece could unveil more budget cuts
next week.

· Corp Credit: Corp credit is outperforming today as IG spreads narrow 2.5 bps and
HY gains ½ of a pt.

· Treasuries: Treasuries rallied a bit today. 2s now yield 81 bps and yields on 10s fell
to 3.61%. The 2-10 year spread saw another flattening and now sits at 280 bps, 11
bps below Monday’s all time high.

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