Friday, April 9, 2010

Financial Sector Stories In Play today $LM $BLK $HIG

·         FINANCIALS: The group is trading in-line with the market as Greece headlines dominate and credit tightens. Volumes and flows are light this Friday as the group remains range-bound ahead of earnings which kick off next Wednesday. Banks are outperforming insurers as non-life insurers continue to be used as a source of funds. Vanillas are quiet today, as HFs are our most active clients. The vanilla flows we are seeing are better for sale into strength in the group, while HFs are more balanced. We're not seeing much shorting being done today. The macro picture (mainly Greece) and earnings will be the main drivers of the group in next week's trading.
·         Brokers – GS falls into the red mid-day today (nothing all that specific out there; keep in mind the stock had a strong rally this week). 
·         Asset managers – the group is higher pretty much across the board.  LM, TROW, BLK, BEN among the best performing names. 
·         Exchanges – ITG falls ~4% today after releasing its Mar volumes. 
·         MIs/financial guarantors – the big story in the space has been in ABK, which is up ~70% after reporting earnings last night (a lot of it has to do w/a short squeeze; the CDS market has been much more stable today).  MTG, PMI, MBI, RDN, AIG, AGO all rallying in sympathy (keep in mind this space has seen huge advances in the last few weeks). 
·         Banks – still buyers in this group; the banks are up ~5% this week alone and ~30% YTD but continue to see buy demand.  C is leading things higher among the money centers (up ~2%).  Regionals are seeing some profit taking today (FITB, STI, TCB, USB), but the selling is pretty mild and its more an issue of buyers taking a break than anything else. 
·         Life insurers – the group is in the red today (LNC, PFG, HIG, PL, PRU are all off 0.5-1.5% on the day). 
·         Best performing sp500 financials: VNO, MI, AIV, C, AIG, IVZ, AVB, KIM, STT
·         Weakest performing: HIG, FITB, XL, LNC, PFG, NYX, HBAN, ETFC, ALL, MET
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