Friday, March 26, 2010

Financials,Brokers,Asset managers Hedge fund stocks Top Stories $SPY

· Financials: The group continues to help take the market higher following support overnight for an agreement by Eurozone officials for a deal on assistance for Greece. In addition, the White House released its mortgage assistance program which will assist unemployed workers and pricipal reduction; this mild positive is helping markets as well. Large cap banks continue to barrel higher this morning, followed by their regional peers. Insurers, namely life names, are catching a strong bid and are the best performing sub-sector within financials. Capital markets related names continue to lag as Dodd's financial regulation bill hangs in the wings. Flows are healthy, and remain sell-side skewed. HFs continue to be the most active.
In banks, we're seeing vanilla profit taking in the large caps, and HF selling into strength in regionals ahead of a potentially busy FDIC weekend. Non-life insurance names continue to be a source of funds to add to life insurance positions. In the brokers, online names are our most active. We're seeing van llas add while HFs take some short-term profits.

· Bank stocks continue to rally – the group continues to see strength. The trend of the week has been a rotation into the larger cap names and this is persisting today – BAC, C, WFC all up around ~2%. The smaller regionals are also strong (although bulk of up less than 1%). MI and RF outperforming in regional land while MTB and HBK are lagging.
· Insurance – non-life stocks are outperforming today. PGR is up 3% (JPMorgan upgraded the stock today) and ALL is up ~3%+ too (optimism around auto insurance helping rally the stocks).

· Brokers – GS is a mild underperformer today after Bernstein trimmed ests on the company.
· Financial guarantors continue to rally on back of the news around mortgage modifications – MTG, PMI, GNW, MBI, RDN all higher on the day. ABK continues to sink (off another 7%).
· Student lending stocks rallying – SLM and FMD both up ~5-6%. FBR Capital was out today raising its PT on SLM. The clarity provided by the bill passage (despite it being a neg) is helping sentiment in the space.
· Asset managers – mixed action in the space. AMG, AB, EV are higher while BLK, BEN are in the red. Pretty quiet today. Sterne Agee had a bunch of initiations (IVZ is up ~3% after being started w/a Buy and $26 PT).
· Hedge fund stocks rallying on back of the FT article talking about MAN Group talking to US funds. GLG +16% and OZM is up 3%.

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