Wednesday, May 12, 2010

Financial, $GS, $BBT, $FITB Credit Cards Goldman Looking better>?


· Brokers – GS actually starting to outperform as press reports indicate regulators looking at other firms.  WSJ this morning said MS being probed while Fox Business mid-day said Citi and DB are being scrutinized.  While GS is the only firm so far to have charges filed against it, as others are caught up in the probe, people seem to be more comfortable returning to GS shares.  MS off ~2% on the day and DB falls from its best levels.  Note that MS CDS is actually flat-to-tighter on the day and doesn’t seem to concerned. 

· Asset managers – strength across the board today.  AMG, AB, EV, JNS, LM, IVZ, etc, all up ~2-3%.  GBL up 6% and best performing in the group. 

· Life insurance – green across the board in the space.  LNC, MFC, MET, PNX, HIG, PRU all up 1-2%. 

· Banks – regional banks have a bid and continue to outperform.  Morgan Stanley upgraded MI and HBAN this morning.  BBT, CYN, FITB, MTB, RF, STI all strong.  STI one of the best acting regional banks.  Money center banks are bit more sluggish as people worried about investigations and the Dodd bill.  WFC outperforming – it is viewed as more insulated than other super cap money centers to Washington and the co also holding its first ever analyst meeting tomorrow  (buyers of the stock ahead of that meeting). 

· Trust banks - In the trusts, BK remains under pressure (recall stock lagged on Tues following the Cuomo Ivy investigation).  Trust banks in general weaker as FX volatility dies down (they were viewed as a play on volatility in the FX markets). 

· Student lenders – NNI is up ~3-4% after its earnings report. 

· Credit cards – seeing the networks rally as people anticipate the Durben amendment won’t have the support to pass (vote could occur later today or Thurs).  Among the credit sensitive ones, COF outperforms, climbing 4%. 

· Financial guarantors – ABK falls after delaying its Q filing.  AGO also remains under pressure (recall stock was weak on Tues after earnings). 

· Best Performing sp500 financials: XL, STI, HBAN, ZION, COF, GS, SLM, PLD, IVZ, COF

· Weakest performing: AIG, MS, BAC, BK, PNC, STT, CME, SCHW, C

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