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Financials Have Worst Day Of Year As Fed Is Faded

Tyler Durden's picture





 

We noted last night that heavy and large average trade size was going through after the cash market close in S&P futures and it seemed overnight we needed one more push to flush out some more chasers before today's less than euphoric macro prints (aside from CFNAI's market-centric index) stalled the Fed-induced excitement. Financials had their worst day of the year (worst performing sector 2 days in a row), down just under 1% as did the Tech and Energy sectors as Utilities were best once again. Volumes were up with ES at its 50-day average and NYSE volume second highest of the year as ES (the e-mini S&P 500 futures contract) slid 20 points or so from opening highs up near 1330. Equity and credit markets tracked on another closely all day (as did broad risk drivers) with a last-30-minutes ramp (once again on high average trade size) just for good measure taking ES back to Tuesday after-hours swing highs. The late swing up looked like a recovery from being modestly oversold relative to risk assets as TSYs, FX, and commodities all trod water as stocks pulled up 5-6 S&P pts into the close. TSYs all rallied on the day with 2s-10s all at week low yields and 30Y starting to catch up to the excitement at the end of the day (though 2s10s30s remains notably 'low' relative to ES currently). Gold and Silver continued to outperform (up around 3.5% on the week) and Copper held onto its gains while Oil dropped back below $100 after getting above $101 early in the day. The correlation of EURUSD and risk has re-emerged recently and post-Europe's close today, USD strengthened though EUR remained just above 1.31 as we closed.

 

 

 

With only their 6th down day of the year, financials dropped almost 1% (and Energy more). Interestingly Wells Fargo is -4.3% from the start of Bernanke's press conference yesterday (the worst performer of the majors). Morgan Stanley, Bank of America and Wells Fargo all sold off 3-3.5% from the early peak this morning and we note that CDS have widened also in the last two days. Volumes today were not dismal with ES at its 50 day average volume and NYSE volume its second highest (second only to OPEX).

 

 

Broadly speaking risk assets have remained highly correlated with ES the last day or two with ES a slight drag on them as today wore on. The small end of day rally in ES seemed to be a pullback to CONTEXT (green oval) as most risk assets were calm as we went out.

 

 

Commodities took their fiat-money lead from yesterday and pushed higher with Silver the biggest winner on the week so far (and from its lows yesterday obviously). Oil fell back close to its USD-equivalent shift before lifting a little into the close but failing to reach $100.

In FX, EURUSD closed just over 1.31 as JPY strengthened relative to a broadly stronger USD - especially post Europe.

Record low 5Y Treasury yields and 7Y outperforming (auction) on the week (-12bps) saw the curve steepen but even 30Y started to crack lower in yield into the close, pushing it to being down in yield now for the week (by only 1bps).

In secondary corporate bonds, financials were net sold (something we haven't seen absent decent issuance) for a while (and CDS were also wider) as it appeared a focus on buying in the belly and away from short-dated and long-dated corporate paper was evident from the buy-side (reflective of the moves in TSYs). IG and HY traded quite tightly together in CDS land but the decompression trade appeared to show its head a little as IG closed very modestly tighter while HY was down in price (only the second time in the last nine trading days!).

Charts: Bloomberg and Capital Context

 


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Thu, 01/26/2012 - 17:41 | Link to Comment achmachat
achmachat's picture

financials are going to have "worst day of year" quite often from now on...

just a wild guess!

Thu, 01/26/2012 - 17:48 | Link to Comment Ruffcut
Ruffcut's picture

Worst days are on the horizon. Hope some of these banksters set some cash aside for the rainy day, down pour.

The severance packs will be plenty to shut the fuck up, and they will do better than most. Crime does pay. Just got to be smart about it.

Thu, 01/26/2012 - 17:56 | Link to Comment redpill
redpill's picture

Of course they tried to bang on PMs all day after their run overnight, and as soon as the market closes they start popping back up again.  The "buy before the close, sell at the open" trade seems as legitimate as ever.

Thu, 01/26/2012 - 17:59 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

 

 

dimon is the new cramer

http://www.youtube.com/watch?v=gUkbdjetlY8

 

dont move your money from bear, dont be silly!

 

Thu, 01/26/2012 - 20:44 | Link to Comment The Monkey
The Monkey's picture

I'm in 30 year US treasuries and 3X short the S&P 500 with 96% of my assets. Come and get me!

Thu, 01/26/2012 - 21:51 | Link to Comment pemdas
pemdas's picture

On margin too, right?

Thu, 01/26/2012 - 23:50 | Link to Comment The Monkey
The Monkey's picture

No margin. But lot's of patience & no fear.

Fri, 01/27/2012 - 01:37 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

^^^^^^^^^^^  hey dude no sarc , youre the first person ive seen on here with balls; you fuking go boy!

fuk em ! take em down!

straight up

Fri, 01/27/2012 - 00:39 | Link to Comment Red Raspberry
Red Raspberry's picture

Do they get their $400 a week unemployment too?????

Thu, 01/26/2012 - 17:49 | Link to Comment johnu1978
johnu1978's picture

The real question is when is Sears going to go bust???

 

-John
http://piratemyfilm.com/projects/311

Thu, 01/26/2012 - 17:54 | Link to Comment john39
john39's picture

many companies getting starved to death out there.  margins getting crushed, consumers struggling...  heard today another small example, quiznos almost went under.  Instead a creditor took over operations.  good luck with that.

Thu, 01/26/2012 - 18:06 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

i havent gone to quiznos in maybe 4 yrs.

the last time i did it was probably my 2nd or 3rd time EVER in there, and between my last time and my first, it was probably 3 yrs between visits.

even in waikiki on the kuhio strip, where it's busy all the time, they were empty and sucked.

 

Thu, 01/26/2012 - 17:50 | Link to Comment SAT 800
SAT 800's picture

It isn't any kind of "worst day of the year": it's just nonsense from a dis-affected Bear.

Thu, 01/26/2012 - 17:55 | Link to Comment homersimpson
homersimpson's picture

Or you can argue that there are bulltards who think that Financials will rise throughout the year.

Thu, 01/26/2012 - 18:04 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Dat U, Robo?  Did ya git a new moniker for gold +1% days?

Thu, 01/26/2012 - 17:53 | Link to Comment Silver Bug
Silver Bug's picture

Financials have another horrible day, Gold and Silver have another fantastic day. Get use to it, it will be happening a lot more in the future.

 

http://davidmorganblog.blogspot.com/

Thu, 01/26/2012 - 17:54 | Link to Comment Saro
Saro's picture

"Every day . . . is worse than the one before it for financials.  So that means that . . . every day that you see them . . . that's on their worse day of the year."

"What about today?  Is today their worst day of the year?"

"Yeah.  Yeah . . ."

Thu, 01/26/2012 - 18:33 | Link to Comment zorbathefreak
zorbathefreak's picture

Deeper and deeper. Deeper and DEEPER! Now Deeper Still!!!

Thu, 01/26/2012 - 17:59 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

This is bullshit. PURE MANIPULATION. There is NO WAY financials can perform so badly after a dovish FOMC.

Thu, 01/26/2012 - 18:07 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAHHAHAHAHA

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA to eternity....

 

Thu, 01/26/2012 - 18:08 | Link to Comment Jack Napier
Jack Napier's picture

Of course it's pure manipulation. The entire market is manipulated. It's manipulated in both directions though, don't get it twisted. Guess what, gold and silver are both up 1% today even though financials are down. That's what the dovish FOMC was good for. Stocks don't give a crap about fundamentals.

Thu, 01/26/2012 - 18:22 | Link to Comment STP
STP's picture

Sure they can perform badly!  The Fed can be Dovish all they want, after they flattened the yield curve and the banks are making little hoarding it at the Treasury.  What do you think the banks and financials did with all the QE's?  Where's the STIMULUS?  Just how many jobs did they create?

Thu, 01/26/2012 - 20:20 | Link to Comment Stack Trace
Stack Trace's picture

Gotta love that flattened yield curve. Banks don't know how to make money without stealing it from tax-payers. They cry for QE instead of making loans. :-)

Thu, 01/26/2012 - 21:31 | Link to Comment DeadFred
DeadFred's picture

I looked hard but couldn't find what was in the Fed announcement that made so many euphoric. The manipulation occured on the day of the announcement, this is just the post manipulation inevitable fade response.

Thu, 01/26/2012 - 23:46 | Link to Comment Bruin4
Bruin4's picture

god....is your head completely up your ass?

Thu, 01/26/2012 - 17:50 | Link to Comment RazorForex
RazorForex's picture

The NQ and the ES are showing weakening signs. There are some nice bar formations on the 4h and daily that are very suggestive of a near term reversal. Keep your eys open! And yes the volume on the ES was pretty heavy!

http://www.youtube.com/watch?v=ukgoNRBgMbg

What I find hard to believe is how the market, especially the NQ is making these highs when the financials are a complete mess. I guess the FED is propping up the markets through any means possible. INSANITY!

Thu, 01/26/2012 - 17:46 | Link to Comment El Oregonian
El Oregonian's picture

"with Silver the biggest winner on the week so far"

Get used to reading that in the coming months ahead...

Thu, 01/26/2012 - 18:13 | Link to Comment Jack Napier
Jack Napier's picture

More than likely silver will be the biggest winner and the biggest loser more than any other commodity this year, but it will also likely have the biggest YOY % gains. Joe Granville, Lindsey Williams, and the DOW/Gold ratio all agree, stocks will not outperform gold until the DOW equals the price of gold. Silver will outperform gold thanks to its unique dual role monetary+industrial status.

Thu, 01/26/2012 - 17:51 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

 

 

ZH READERS ARE WRONG ABOUT OBARRY HE IS SAVING MONEY!!!!!!!

http://www.youtube.com/watch?v=UDDRiGIUYQo

 

very economical words and even the gestures are efficient. say the same words and turn head in the same direction. 

i must have missed the japanese building the obamabot and the willard-o-5000.

 

Thu, 01/26/2012 - 17:48 | Link to Comment SAT 800
SAT 800's picture

BAC is at $7.30 today; kind of hard to worry about when you bought it at $5.76 like I did; you sure do have a lot of pretty charts, tho.

Thu, 01/26/2012 - 17:53 | Link to Comment Ruffcut
Ruffcut's picture

IF you are a trader then good for you, but if you are an investor going long out, then you are a moron.

You own a ticking time bomb turd, so I wish you well, or better yet, go to hell with your bank of shitmerica.

Rock on market makers!!! There are still morons who "believe" in your bullshit, til their life expectancy of zero.

Thu, 01/26/2012 - 17:53 | Link to Comment homersimpson
homersimpson's picture

Hang on to it for 2 months.. you'll see $5 - esp. after Greece defaults.

Thu, 01/26/2012 - 18:12 | Link to Comment SAT 800
SAT 800's picture

Stop loss is at $6.00 even; trading only; I never understood what stock market people were talking about when they said "buy and hold"; three months is a long time for me; I always sell too soon; like the original John Pierpont Morgan. Cheers.

Thu, 01/26/2012 - 18:26 | Link to Comment Saxxon
Saxxon's picture

SAT 800 Bernard Baruch said that, not Morgan.  BB was one of the few who were positioned short before October 1929; others that I know of being Joe Kennedy and Jesse Livermore.  Kennedy said at the time, "only a sucker hangs on for the last dime".  J.P. Jr. and Rockefeller got hurt in the '29 crash.

Thu, 01/26/2012 - 18:35 | Link to Comment homersimpson
homersimpson's picture

Whatever, Robo.

Thu, 01/26/2012 - 18:57 | Link to Comment catacl1sm
catacl1sm's picture

Now would be a good time to sell, take your profit, and find a new trade. Assuming you  trust that there is ANY rationality in this market.

Thu, 01/26/2012 - 20:57 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

whats the market cap and P/E for rationality these days?

 

Thu, 01/26/2012 - 17:54 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

"today"

Bought my first oz of Au 8 years ago.  I think I'll still have it long after you've thrown your BAC out.  But enjoy your high.

Thu, 01/26/2012 - 18:36 | Link to Comment STP
STP's picture

Why don't you mouse over to OCC.Gov and see what kind of leverage BAC has on their Derivatives?  Last time I looked, BAC has in $1,451,387 millions is assets and $52,504,829  in Derivatives.  Also, they aren't done choking on Countrywide yet, by a long ways.  Somebody waaay on high, must've twisted their arm hard to soak up that pile of crap.

Thu, 01/26/2012 - 23:16 | Link to Comment jm
jm's picture

...or ICICI or Woori or Handelsbanken or HSBC or...

Thu, 01/26/2012 - 23:48 | Link to Comment Bruin4
Bruin4's picture

oooooooh

Thu, 01/26/2012 - 17:50 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

The Bernank shot a blank as far as equities go.  Oopsie.

In other news...Jamie Dimon was on CNBC this am spouting off about how a Greek default wouldn't harm the TBTF.  Maybe what he was really sayin is that they were going to be deep-sixed of their own accord before Greek declares an actual ISDA-recognized default.  :D

Thu, 01/26/2012 - 17:57 | Link to Comment niktamere
niktamere's picture

but they told us to get out of fixed & into equities 

Thu, 01/26/2012 - 18:02 | Link to Comment Savonarola
Savonarola's picture

I'll bet Jan Brewer doesn't own any financial stocks.

Thu, 01/26/2012 - 18:06 | Link to Comment kill switch
kill switch's picture

OT,, Did Hugo Chavez get his gold?? ALL OF IT?

To all others,,,get your gold out of the U.S. ASAP!!!!

Thu, 01/26/2012 - 18:09 | Link to Comment yogibear
yogibear's picture

QE 2 was a flop. Why expect anything else from the Fed Banksters.

We are drowning in liquidity and debt. Banks are still holding a lot of the fed's money.

Thu, 01/26/2012 - 18:09 | Link to Comment ilovefreedom
ilovefreedom's picture

Macro Economy? Who cares!! Apple is #1 and has a quadrillion in the bank!

 

Thu, 01/26/2012 - 18:23 | Link to Comment gangland
gangland's picture

 

 

"The FOXCONN suicides are about average for the Chinese population as a whole....plus they have swimming pools" - Steve Jawwwbz

 

the bestest and greatest human being ever and ever! RIP Steve Miss you  : ' - (

"almost 100 of Apple’s supplier factories force (but it's not slavery! they have pools!) more than half their workers to exceed a 60-hour week.

The company announced responsibility for aluminum dust explosions in Chinese supplier factories that killed four workers and injured 77.

Hundreds more in China have been injured cleaning iPad screens with a chemical that causes nerve damage.

Tens of thousands (HUNDREDS OF THOUSANDS) of Apple workers live in factory dorms on-site, where they are woken in the middle of the night and forced onto 12-hour shifts when Jobs decides a product needs tweaking."

 


Thu, 01/26/2012 - 19:01 | Link to Comment catacl1sm
catacl1sm's picture

I vacilate on China's workforce. On one hand they have shitty jobs, but is a shitty job better than no job? Would the US look the same way without regulations? If it's so bad, cant' they just quite and go back to an agrarian lifestyle?

Thu, 01/26/2012 - 20:54 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

so its either work without dignity like a slave, like property, sort of like the us army did away with its draft and now is a 100% "volunteer" corps full of new grads that only joined to be able to feed themselves and pay off student loan debts, only to lose half a brain in afpakiraq, OR go back to the agrarian (you make it sound so bucolic) life where you cook with wood.

that's a hell of an option to offer another human being just because they have the nerve to want a better life, only because consumers want the option to buy the newest icrap and jobs wanted the option to maximize his margins because the money isnt enough.

i really long for the day that we stop seeing things through this lens, but i hold out no hope.

so to answer your question from a personal pov, i'd rather have no job and have my dignity and freedom and starve and freeze, than to be owned with chump change in my pocket.

in fact given the stark choices above, there is more honor in theft than in slavery.

 

Fri, 01/27/2012 - 07:35 | Link to Comment Pemaquid
Pemaquid's picture

Pay of $17/day. What will that buy in China? How much is a typical meal, etc.?

Thu, 01/26/2012 - 18:17 | Link to Comment vs an army all alone
vs an army all alone's picture

A little off topic but I thought ZH's might enjoy a little HOPE? - CHANGE?

http://giveusliberty1776.blogspot.com/2012/01/exclusive-breaking-newsjud...

Thu, 01/26/2012 - 18:22 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Don't get your knickers in a twist. The "Financials" were stinking it up because of Etrade, then Schwab, State Street and BoNY. I didn't even know Etrade was still in business (joke, sort of).

The House of G-d's Work was actually up today.

"Don't fight the FED" is like a ball pean hammer.

It takes a while for it to sink in.

Thu, 01/26/2012 - 18:38 | Link to Comment chump666
chump666's picture

slight USD bids in re:

*CDU/CSU Kauder threatens Greece with stop payment, can not always give money without something changing (Der Spiegel)

Thu, 01/26/2012 - 18:39 | Link to Comment vocational tainee
vocational tainee's picture

Last word of the hanged man was,this is not my worst day..

Thu, 01/26/2012 - 18:48 | Link to Comment Quinvarius
Quinvarius's picture

Being forced to eat your own puke will do that to you.

Thu, 01/26/2012 - 18:52 | Link to Comment vocational tainee
vocational tainee's picture

Isn`t that yuor one pefered meal?

Thu, 01/26/2012 - 18:57 | Link to Comment Heroic Couplet
Heroic Couplet's picture

Well, it's only the 26th day of the year, let's hope Financials are completely gone by the end of this month. Morons who want deregulation are too dumb to realize that deregulation leads to increased risk. The more private bank cartel families busted over this, the better, although they may not suffer, only their balance sheeets. The more bankers, hedge fund managers, day traders, and Central Bank jackals gone, broke, destitute, unemployed and on food stamps, the better. No one on Main St gives a rat's butt.

Thu, 01/26/2012 - 21:07 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

that's the entire point. the raison d'etre of this site.  these too smart for their pants arseholes want to completely eliminate risk.

as if they can force the universe into some new law by virtue of their phds.  

theyre either too stubborn, greedy or stupid to see and accept this.

 

Thu, 01/26/2012 - 19:27 | Link to Comment GernB
GernB's picture

Everyone is hearing "low interest rates for the next two years." Somehow I don't think it has sunk in to investors yet that the Fed just said they won't allow the economy to grow faster than 2%. Doesn't that translate into the total equities market (i.e. S&P 500) growing at only 2%. How is that good news for the S&P 500?

Thu, 01/26/2012 - 19:51 | Link to Comment mammoth mo
mammoth mo's picture

Anyone see the volumn on the TVIX today?  Could the downside move be on the way?

Thu, 01/26/2012 - 21:03 | Link to Comment dcb
dcb's picture

I can't predict things, but the channel has been rather cleear. the markets are overbought, but looking atthe last hour of thye day I see a short squeeze

Fri, 04/06/2012 - 03:01 | Link to Comment kevin22
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