Financials $XLF- shorts continue to be put on in regional banks at these fresh lows

· Financials - Sector underperforms the overall market as banks weigh most heavily following Non-Farm Payrolls and heading into a vote on financial reform from the Senate. Despite the 8:30 employment report, market volumes are very quiet as it was no major suprise. The upcoming holiday weekend is also pressuring volumes. Flows are lighter as well, but show us still better for sale. Overall, long-onlys continue to pressure the group (mainly in brokers and insurance) and are only putting money into money center banks. HFs are more balance, but are also better for sale overall. We're seeing shorts continue to be put on in regional banks at these fresh lows. Next week should bring about a flurry of sell-side earnings preview. With Congress out next week, expect lobbying to persist for more Senate votes on financial reform.