Thursday, September 23, 2010

Financials - It was a Broke Back Mountain Moment for some Brokers

Brokers – the group was under pressure for most of the session; more sell-side number cuts (BoA/Merrill and Rochdale today and Deutsche Bank yesterday) and the disappointing JEF earnings continue to weigh.  JEF falls nother 2%+.  GS finishes off nearly 2%.  MS was a mild outperformer.  PJC is one of the few brokers that outperformed (stock ended up nearly 1%).

  • Asset managers – the group sank in trading today; AMG, AB, BLK, EV, BEN, JNS, TROW, LM, all finish off 1-2% while IVZ drops ~3-4%.
  • Credit cards – the group acted OK today; MA and V both eke out gains.  DFS rallies >1% (the stock hits multi-month highs and has had a very strong week since reporting earnings).

Banks – the regional banks had tried to rally earlier in the day but they came for sale into the close; the money centers spent the day in the red across the board.  BoA and WFC both ended off 2-3%.  Within the regionals, USB, FITB, KEY, RF, STI, and ZION were some of the weakest (the USB selling received a lot of attention – the stock has been heavy really since its analyst meeting last week)
Insurance – the life names were for sale for most of the day (adding to their losses from yesterday); MET, PFG, PRU, GNW, AFL, and LNC all end off nearly 4%.  HIG was an outperformer for most of the day following today’s pos. comments from Morgan Stanley, although the stock sank in the afternoon (ended off 2%).  Some of the non-life guys outperformed, but most closed lower (TRV was an exception).

·         Best performing sp500 financials: FHN, DFS, SLM, PNC, TRV, BBT, ETFC, HCBK, PBCT, COF

·         Weakest: MET, PFG, IVZ, AVB, KIM, PRU, GNW, USB

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