Monday, March 8, 2010

Market Updates $AIG $M $YHOO


·         Market update – equities remained quiet into the afternoon; not much changed from the morning session.  Buyers on the sidelines, digesting the strong Fri close; buyers remain price sensitive and aren’t chasing stock higher, but use any dip as an oppy to add long exposure.  Longs aren’t taking profits and shorts aren’t laying out fresh exposure (shorts continue to be more interested in using any dip to cover).  “Flat” characterized most asset classes today for the most part (not just equities); the most interesting action occurring in IG corp credit (IG13 tightened more than 3bp today to ~82; note that IG was north of 100 back on 2/5).  

·         Equity Sectors – similar dynamics as mid-day.  Telecom stocks held their gains, ending the day up ~15  (S led the group higher, helped by some encouraging comments by mgmt at the Raymond James conf).  Consumer discretionary also outperformed, finishing up ~0.4%, as retailers extended their gains from last week (ODP, M, ANF, and MCD led discretionary higher; MCD was boosted after reporting strong sales this morning).  Staples, industrials, health care all end down 0.4-0.5% (within industrials, capital goods fall 0.6% and underperform).  Tech was an outperformer, led higher by networkers (CSCO rallied 3% ahead of tomorrow’s product launch; JNPR was strong too; storage hardware stocks EMC and NTAP were strong too – helped higher by the XRTX upside preannouncement).  Financials ended in the green, mild outperformers, helped higher by insurance (MET/AIG) and REITs; the BKX/banks were flattish today.  Materials lagged, w/AKS the worst performing name in the group (on back of the Goldman downgrade).  Coal stocks gave up some of their strength from Fri today and weighed on energy. 

·         Best Performing SP500 stocks: MET, ODP, S, CSCO, AIG, X, MFE, EMC, M, YHOO

·         Weakest performing sp500 stocks: AKS, CHK, DVA, CNX, SPLS, AMT, SUN, BTU, PCP, RRC 

·         Commodities: With the dollar mostly unchanged from the morning, commodities strengthened in the afternoon (with the exception of Gold) Oil came off its lows around noon to finish the day at $81.80, up 0.35%. Natural gas also came off its lows to finish at $4.55, down 1% (compared to down 2% midday). Copper finished the day down 0.1%, again off its lows. Gold was the outlier - after selling off in the morning, it traded flat to close at $1122.10, down 1.15%.

·         FX: USD (DXY) came off its morning lows and traded sideways into the close; finishing flat, along with all other currencies. After coming off its morning lows, the dollar finished flat vs. the Euro. The trend continued in the Pound, with the dollar coming off its morning lows and finished near its highs, up 0.5%. The dollar fluctuated vs. the Yen throughout the day, and finished flat.  After coming off its morning highs, the Euro finished flat vs. the Yen.

·         Corp. Credit: Corp. Credit was mixed in the afternoon was IG outperforming and HY trading inline w/equities (flattish); IG narrowed to 3.25bps (going out the day at their tights) while HY spreads were flattish.   

·         Treasuries: With Equities finishing giving back some small gains, TSYs were mostly flat. The 2s continued to yield 90bps and the 10s weakened slightly to 3.71% The 2-10 year spread steepened a bit to 2.82bps.

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