OVERVIEW 02.23.10

·

Equities have been in the red pretty much since the open

. Some of the items

weighing: 1) a stronger dollar is weighing on commodity-linked groups (see below for

update on the dollar); 2) weak US eco data, esp. the consumer confidence reading at

10amET; 3) disappointing tech numbers last night (while not major companies, CTV

and BRCD are both off double digit % after earnings and weighing on the broader

group); 4) the FDIC Q4 banking report hit the financials when it hit @ 10amET today.

The first 45 min of the day were busy but things have quieted down on the desk.

Flows are pretty quiet. Seeing some long vanillas selling today and shorts a bit more

comfortable laying out exposure, but nothing aggressive; pretty orderly selling.

Volumes aren’t spiking on the weakness. All eyes on the Treasury auction at 1pmET

today.

·

Technicals

: update from M Krauss out last night: Be careful of bearish reversals,

and a sub-1097 close. Would risk the 1076.75-1079.13 Feb 17 hourly gap

·

Equity Sectors

– broadbased weakness today; financials, tech, industrials, health

care, energy, and materials are all off ~1% or more. Tech is off ~1.4% and one of

the weakest groups today; some disappointing earnings releases out of BRCD and

CTV are both weighing (BRCD is off 22% on the day). The semis/SOX is off close to

3% (it failed to sustian a major move north of its 50day MA a couple days ago). The

stronger dollar is hitting the commodity-linked groups (energy and materials are both

off >1%). There is strength in retail after earnings (ODP and HD are both up 2%+).

·

Best Performing SP500 stocks (from Bloomberg)

: EXPD, ODP, MIL, TMO,

WFMI, HD, GS, Q, APOL

·

Weakest performing sp500 stocks (form Bloomberg)

: THC, RSH, FSLR, MU,

MEE, TER, NVLS, S, CNX

·

Commodities:

Commodities are weaker across the board today, driven down by a

stronger dollar and a weak consumer confidence number. Oil is off just under $1.50

to $78.80 after falling below $78.50 following the consumer confidence number.

Natural gas is off around 7c to $4.83. Gold is off around $10 to $1103.40. Copper is

getting hit pretty hard today, down close to 3.10% on the day and near its lows of the

day.

·

FX:

USD (DXY) is up around 0.4% and sitting at its highs of the day. The dollar is up

0.65% against the Euro, 0.35% against the Pound (off highs), and down 1.00%

against the Yen (at lows). The Euro is off over 1.65% against the Yen and at its lows

of the day. Helping the dollar: 1) weak Eurozone eco #s (namely the German IFO

reading); 2) dovish comments from BOE’s King (discussing potentially expanding

QE); 3) more sovereign worries (prompted by Fitch cutting Greece’s 4 largest

banks).

·

Corp Credit:

Corp credit is down slightly more than the tape today as IG spreads

widen 2.25 bps and HY loses 5/8 of a point.

·

Treasuries:

Treasuries rallied across the board today as investors moved money out

of equities. Yields on 2s fell to 85 bps while 10s now yield 3.73 pct. The 2-10 year

spread flattened a bit to 289 bps, now 2 bps from yesterday’s all time high.