Wednesday, March 3, 2010

Financials 03.02.10 Updates


·         Financials: Financials are slightly outperforming today as US credit markets trade tighter and Greece concerns abate following announcements on fiscal decisions. A lot of correlation seen in the group today as banks, insurers and capital markets related names all trade up in-line with eachother. Macro stories are continuing to drive the group and the market in the short term, and should continue to do so through Friday's employment report. Volumes and flows remain light amidst a slow catalyst calendar. The group appears to be more ETF driven versus single-stock driven. In banks, we're continuing to see institutional selling in the large and small cap names into rallies. Buyers have less conviction at current levels, and are using limits and/or spreading out exposure over the day. Value buyers remain much lower in the group. In insurance, we're seeing a passive defensive rotation into non-life names from the life names, as the life group appears to be getting tired at current levels.

·         Brokers – some pressure in MS/GS (flat-to-dwn small) while electronic names catch small bid (ETFC, AMTD, SCHW). 

·         Asset managers – strength across the board in the group.  AMG and JNS are both up 2%. 

·         Life insurance – still see the smaller/mid-cap names outperform while PRU/MET lag; PNX, PFG, LNC all up ~1%.  HIG though is an exception – giving back some of its outperformance from Tues. 

·         Banks – the group is trading higher on the whole.  Money centers up across the board, esp. WFC, which is up another 2% on the day.  Within the regional banks, BBT, FITB, MTB, STI, and PBCT are all flattish-to-down.  KEY, PNC, TCB outperform. 

·         Cards – the group is higher across the board.  COF, AXP, DFS all up 1%.  The Discover U.S. Spending Monitor rose 2.3 points in February to 87.5 (based out of 100), as the economic outlook among consumers improved and discretionary spending intentions stabilized (DFS made the release this morning). 

·         NYX is trading up 1% coming away from its analyst meeting.

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