Friday, March 19, 2010

Financials -Exchanges-Asset managers updates $BLK


· Financials: Group slightly undperforming on a lack of company-specific headlines. A combination of macro stories (India rate hike, HC legislation concerns and EU summit next week) combined with some technical factors are leading the group to sell-off this morning. Volumes are heavy thanks to index rebalancing and quad-witching. Cash trading volumes are not necessarily reflecting this, as flows are lighter than they have been earlier this week. We're skewed to the sell-side in today's activity, with HFs dominating the flows again today. Vanillas were very active earlier in the week but have been inactive over the past two days. We still aren't seeing many shorts being placed (only in pairs trades). Most traders continue to be simply taking profits thanks to recent strength. With a lack of catalysts in the group in the near-term, they will be driven by the macro events and technicals.

· Exchanges – some strength in the group today – NDAQ is up ~1% and CME is flattish.

· Asset managers – the group has had a strong week but is seeing profit taking today along w/weakness in the broader tape; AB, BLK, JNS all off ~1%. AMG is up on the day and outperforming.

· Banks – the group is selling off w/the broader tape but is still outperforming on a WTD basis and esp. YTD. BXS, PNC, TCN, PBCT are all up on the day. CYN, FITB, MI, RF, ZION, MI, STI are lagging.

· Non-life insurers outperforming today (as they usually do in a general downdraft b/c of their safer-haven status). ACE, PGR, ALL, CB all flattish-to-up.

· Student lenders coming for sale as it looks increasingly likely that student lending legislation will be bundled w/HC.

· Best Performing sp500 financials: PGR, FHN, NDAQ, PBCT, AON, CME, MMC, MCO, CINF

· Weakest performing sp500 financials: SLM, HBAN, ETFC, MI, ZION, HIG, PLD, HCBK, XL, BAC

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