Monday, August 23, 2010

Color of the Tape – Financial Flows are showing us 2:1 better for sale, and that HFs continue to pressure regional banks (both selling and shorting). $XLF

Financials

· FINANCIALS: On a very quiet news and volume trading day, both financials and the overall market trade around the flat-line. A lack of economic data or company/industry headlines not giving much reason to trade. Technicals appear to be helping support market (low 1070's). Volumes in ETFs/Futures are slightly below their 20-day MA, however single stock volumes are much weaker. It appears most trades being put on today are being done so through more liquid and broader-reaching plays. Flows are showing us 2:1 better for sale, and that HFs continue to pressure regional banks (both selling and shorting). Vanillas also better for sale in the banks, but being seen putting money to work in beaten-down life insurers. Catalysts going forward are very limited. Look for macro data to continue to direct the sector/market, and for Friday's speech from Bernanke to be the highlight of the week.

· Brokers – pretty quiet action for the most part although JEF shrs rally 3% and outperform.  GHL and LAZ continue to trade well (both continue to be viewed as plays on a banking rebound). 

· Insurance – still some softness in the life stocks (PRU, AFL, LNC all pretty heavy today) although HIG up small.  AIG bouncing after IFLC pays back all its debt to the NY Fed and will now be self-funded.  Non-life continues to outperform life (MMC, CB, UNM, ALL, AON, PGR, ACE). 

· Banks – the group acts pretty well today; BKX up small on the day; C and BoA are each up ~1%.  Within regional banks, CMA, FITB, KEY, RF, STI, USB, and HCBK are all in the green. 

· Best performing sp500 stocks: NYX, RF, STI, VNO, BAC, COF, C, MMC, BXP

· Weakest: JNS, MI, GNW, MCO, BBT, ZION, TRV, NTRS, WFC, M

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