US Financial Stocks Catching Up To Credit Weakness

Tyler Durden's picture

We noted last week that credit spreads (particularly for financials in Europe and the US) were deteriorating rapidly. In Europe we saw financial stocks hold and then drop to catch up and once again today we see them holding up as credit drops further. In the US, from yesterday's gap up open exuberance, the major financials are significantly underperforming as they catch up to the ugly reality of the credit markets. Morgan Stanley and Citi are  down 6% from yesterday's opening level, BofA and Goldman are down 3.5-4% and Wells Fargo is tracking the financial ETF (XLF) down around 2%. Even JPMorgan is down 1.4%. Several of these names are retesting their 200DMAs from above and volumes are picking up.

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pods's picture

Blasphemy I say.  Those cannot go DOWN!

pods

Clueless Economist's picture

Don't worry Britney Houstons's tragic death in that hotel bathtub is BULLISH for financial stocks

redpill's picture

Is the bid/ask spread on gold spot larger than normal this AM?  I don't remember it being a full $2

Miss Expectations's picture

Clueless, I think that carbon monoxide could have been a factor, especially in light of Whitney's daughter having "fallen asleep" in the bathtub the night before.  Check out the number of stories on carbon monoxide hotel evacuations:

http://www.bing.com/search?q=carbon+monoxide+hotel+evacuation&qs=HS&form...

 

midtowng's picture

The pattern in 2007-2008 was:

1) credit markets starting with junk

2) bank stocks

3) general economy

4) general stock market

fonzannoon's picture

Today is another example of the market looking like it was about to fall off a cliff but then does not.

WonderDawg's picture

The day is young.

Come on, Citi! TANK you sons of bitchez!

true brain's picture

Everything is coming together in common sensical way: plunge in Dry Baltic Index, plunge in % population employed US, plunge in Fed Tax collection, plunge in retail sales, plunge in saving rate, maxing out in consumer credit, China hard landing.

Enough said: bomb shelter here I come.

LawsofPhysics's picture

They will print, and you will buy the fucking dip.  Same as it ever was.

Conman's picture

BTFD 4 LIFE will be my next tattoo.

spekulatn's picture

Don't forget the "Bitchez."

 

BTFD 4 LIFE BITCHEZ 

true brain's picture

Just before they print, i'll cash out my shorts and convert into gold; just in time for hyperinflation. Bitching baby, bring it on.

Conman's picture

Nevermind that, look at AAPL. Ipad 3, iphone 9, dividends, stock buyback, facebook, any of this working?

Cognitive Dissonance's picture

"In the US, from yesterday's gap up open exuberance, the major financials are significantly underperforming as they catch up to the ugly reality of the credit markets."

Is this a new ugly or just more of the old ugly? Just askin' cus.......well........cus it's all beginning to sound like a very very broken record.

pods's picture

This is Janet Napolitano ugly.

U.G.L.Y. you ain't got no alibi, you ugly!

Cognitive Dissonance's picture

I'll see your Janet Napolitano and raise you a Janet Reno.

http://en.wikipedia.org/wiki/Janet_Reno

pods's picture

I think they were both rejected pledges of Omega Mu.

Dr. Engali's picture

Yes but Apple is holding on to $500.00 so all is good no?

 

Let them eat ipads.

Vergeltung's picture

$500 for one share of stock. that's crazy!

Vince Clortho's picture

Good indeed.  Apple @ $500 can singlehandedly prop up the entire world economy.  Any move above that would signala Hyper-Rally buying opportunity.

battlestargalactica's picture

http://farm3.static.flickr.com/2259/1724837634_e63a2d64ec.jpg

And don't forget to save enough boxtops to get your own algo / bot decoder ring! 

RobotTrader's picture

The PigMen will wait for the market to get oversold, then they will get GOOG, PCLN, and AAPL to announce 4 : 1 stock splits.

 

Looks like the bears are getting sucked into buying puts right in front of options expiration, same Tom Foolery played out over and over again.

Clueless Economist's picture

Hey HomoTrader..what would you do if your Mother's basement ever floods out?  Where would you live?

RobotTrader's picture

KRE down a paltry 40 cents today, just off its 3-year highs.

 

Not exactly the "bloodbath" everyone is reporting here.

slaughterer's picture

If we say it is a bloodbath, it is a bloodbath.  

Tsar Pointless's picture

Yes, they're really catching up...to being on par for the day, that is.

Buy the rumor, buy buy buy the news!

Conman's picture

Wooo here comes the daily rip off the lows and close to the highs, attributed to..... nothing at all.

resurger's picture

Europe Down 2% then US is down 1% = Asia

Europe up 1% then US is up 2%

Red

US=Eu X 0.5

Green

US= EU X 2




 

LJFade's picture

What credit are you comparing financials credit to when derive the spread?

Is is against US Treasuries or against an index of similar corporate bonds?