FINANCIALS UPDATE: $GS $ICE ; Activity in the brokers has picked up, with HFs establishing new shorts in both the large and mid-cap names

FINANCIALS: Sector slightly outperforms after underperforming by almost 80bps coming into today (S5FINL flat vs. SPX -0.4%). The market is trading in a tight 8-9pt range on a light newsday. Only a few unsurprising economic datapoints released this morning are providing any volatility to the market. Following an active week of trading, volumes today are trading in-line with their 20-day MA. Flows are very mixed, with mostly trimming/adding taking place. Vanilla accounts remain mostly disengaged, adding to regional banks, P&C and insurance brokers while trimming in life insurers. HFs much more active, being two ways (better buyers) of regionals. We're not seeing the resumption of short-selling today after yesterday's hiatus. Activity in the brokers has picked up, with HFs estabilishing new shorts in both the large and mid-cap names. Catalysts for the group remain light here in mid-August, however many traders are looking forward to next Tuesday's GSE Summit to provide some fireworks in terms of housing and possible refinancing of mortgages (this is the biggest catalyst of the summer)

· Banks – they are trying to rally today; BAC and C both strong (each up 1%); a lot of green in the regional banks – BBT, FITB, KEY, MTB, MI, RF, STI all higher. 

· Brokers – relatively quiet today in the space; more press about job cuts occurring at the big brokers b/c of sluggish summer trends (article on Bloomberg today); we are starting to get monthly volumes (SCHW’s DARTs were flat M/M).  GHL, LAZ both outperforming. 

· Asset managers – relatively quiet today; group trying to rally; BLK up ~2% (although was a laggard on Thurs recall).  AB, EV, JNS, IVZ, WDR all flattish-to-up. 

· Insurance – a lot of strength in the space today – non-life outperforming (TRV, ACE, CINF all up ~1%) although HIG also strong (up ~1%).  Aside from HIG though, life is for sale (AFL, LNC, PFG all in the red). 

· Best performing sp500 financials: BAC, TRV, ACE, C, HIG, XL, AIZ, KIM, COF, CINF

· Weakest: ICE, LM, NTRS, ZION, AFL, AIG, MCO, PNC, FII, HST