Tuesday, March 16, 2010

Industrials/Materials/Energy $BUCY Financials $GS $MS

· Brokers – MS and GS both make strong gains today; MS ending up near 2%.
· Life insurers – green across the board in this group; PFG, PRY, MET all acting well today.
· Non-life insurers – the group has been under a bit of pressure for much of the last week as the more credit-sensitive financials take off on the upside; also the recent cat activities are seen as detrimental to earnings but not large enough to really impact pricing.

· Banks – one of the best performing groups in the whole market. C climbs >3% and resumes its march higher after pulling back Fri and Mon. today is the first day the Treasury can sell its 7B+ share stake in the company. Aside from C, the regional banks are outperforming the larger money centers…..BBT, PNC, RF, ZION among the strongest regionals.
· Best Performing sp500 financials (from Bloomberg): ZION, CBG, C, GNW, RF, PFG, PLD, KIM, SPG
· Weakest performing sp500 financials (from Bloomberg): AIG, FII, AON, ICE, NYX, CME, NDAQ, BRK’b, PRG, SLM


· Industrials: Industrials were one of the strongest spaces in the market today as the market finished at its highs of the day following the FOMC decision. GE continued to be the story here as positive comments at the Goldman conference and from JP Morgan helped push the stock up over 4.5% through $18. Institutional buyers showed up in mining names like JOYG and BUCY, while the long JOYG short BUCY trade continued to work for investors. Other machinery names outperformed as risk appetite returns and investors put money back into the higher beta names. We saw vanilla buying in aero/def names as the space moved higher. Education names outperformed today amid positive comments from some sell side shops.
· Transports: Transports were all stronger today except airlines which were mixed due to stronger crude. Rails were in line with the market although KSU outperformed after having its price target increased at Goldman. We saw HFs buy LTLs and vanillas bought freight as both outperformed ahead of FDX’s earnings on Thursday.

· Homebuilders: Homebuilders were much stronger today, up 2-4%, thanks to a positive housing starts number in the morning. The space continues to see good news and we’ll see if it can continue next Tuesday when KBH reports earnings.

· Materials: Materials were the best space in the market today thanks to a weaker dollar and a commodity rally that ended near the highs after the FOMC decision. We saw fast money buyers today in metals and chemicals thanks to a jump in the price of gold and other base metals as well as the bullish inventory decline POT reported overnight. Paper/packaging stocks outperformed after Goldman raised a few price targets and ahead of the box shipment data which is due out tomorrow (was originally due today but moved to tomorrow).
· Energy: Energy stocks outperformed the tape a bit, although it was surprising they weren’t better given yesterday’s underperformance and the fact that crude ended up nearly $2 today. That said, integrateds and drillers were up 1-3%, outperforming the space. Servicers were one of the strongest areas in energy, with many names up 2- 4%. Refiners were up, but only around 1% after yesterday’s relative outperformance. E&Ps were mostly higher although the big names (CHK, APA, XCO, COG, and EOG) were flattish amid continued weakness in natural gas. Coal stocks outperformed (except for CNX which lagged), up 2-5% after lagging yesterday. Solar stocks were mixed as the space continues to tread water over the subsidy issues in Europe and oversupply.

No comments:

Post a Comment