Wednesday, March 17, 2010

Financials News and Potential Events that Move the Market Today $SPY


· FINANCIALS: Group continues to help lead the tape higher as comfort and sentiment around the group and macro picture continue to improve. On a light company-specific news day, the focus is on the testimonies of Bernanke and Volcker in front of the House Budget Committee at 2pm. Flows are much more active today than earlier in the week as we are aggressively breaking out to newer highs this morning. Flows do remain skewed to the sell-side for HFs, but the vanilla underlying bid continues to lift the group. This move higher is the result of the largest vanilla participation we've seen in two weeks. In banks, we're seeing HFs take profits in the money center and larger cap banks while vanillas are picking spots selectively to add to positions. In the insurers, we're seeing a strong vanilla bid to the life names, allowing for them to outperform. HFs have walked away from the sell-side in the life insurers, allowing for demand to lift the group aggressively.

· Brokers – AMTD actually higher despite reporting tepid DARTs last night and trimming its EPS outlook (after the SCHW warning last week, people weren’t too surprised that Feb volumes were on the soft side). GHL up ~6% after last night’s deal announcement and LAZ falls ~1% on the stock sale news. OPXS is off 3% after its monthly report (BoA/Merrill downgraded the stock this morning).

· Banks – the group is strong again today (although not outperforming to the extent it did last week). BAC leading in the month centers (up 1%). Regional banks continue to outperform – CYN +2.4%, KEY +3%, MI +3%, RF +2%, STI +2%, ZION +3%.

· Insurers – strength across the board today (both life and non-life).

· Asset managers – very strong move across the board; AMG, BLK, BEN, JNS, TROW, LM are all up at least 2% (BLK is up 5% on the Credit Suisse upgrade).

· Cards – mixed action in the space; DFS flattish on the day and COF falls small; AXP is outperforming. DFS reported Tues night (although the co had already preannounced earnings).

· CIT – the stock rallies 4% after earnings

· Best performing sp500 financials: LNC, CBG, PFG, ZION, MI, PGR, TMK, HBAN, LM

· Weakest performing sp500 financials: USB, SCHW, GNW, COF, BRK’b, MCO, DFS


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