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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Tue, 02/14/2012 - 11:29 | 2157375 pods
pods's picture

Blasphemy I say.  Those cannot go DOWN!


Tue, 02/14/2012 - 11:31 | 2157381 Clueless Economist
Clueless Economist's picture

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

Tue, 02/14/2012 - 11:38 | 2157402 redpill
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

Tue, 02/14/2012 - 11:49 | 2157452 Miss Expectations
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:


Tue, 02/14/2012 - 12:14 | 2157446 MillionDollarBonus_
MillionDollarBonus_'s picture


Tue, 02/14/2012 - 12:49 | 2157752 midtowng
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

Tue, 02/14/2012 - 11:31 | 2157378 fonzannoon
fonzannoon's picture

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

Tue, 02/14/2012 - 11:32 | 2157384 WonderDawg
WonderDawg's picture

The day is young.

Come on, Citi! TANK you sons of bitchez!

Tue, 02/14/2012 - 11:32 | 2157385 true brain
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.

Tue, 02/14/2012 - 11:33 | 2157387 LawsofPhysics
LawsofPhysics's picture

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

Tue, 02/14/2012 - 11:40 | 2157409 Conman
Conman's picture

BTFD 4 LIFE will be my next tattoo.

Tue, 02/14/2012 - 14:24 | 2158192 spekulatn
spekulatn's picture

Don't forget the "Bitchez."



Tue, 02/14/2012 - 13:21 | 2157931 true brain
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.

Tue, 02/14/2012 - 11:34 | 2157389 chunga
chunga's picture


Tue, 02/14/2012 - 11:34 | 2157391 Conman
Conman's picture

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

Tue, 02/14/2012 - 11:34 | 2157392 Cognitive Dissonance
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.

Tue, 02/14/2012 - 11:44 | 2157425 pods
pods's picture

This is Janet Napolitano ugly.

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

Tue, 02/14/2012 - 12:00 | 2157503 Cognitive Dissonance
Cognitive Dissonance's picture

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

Tue, 02/14/2012 - 12:03 | 2157521 pods
pods's picture

I think they were both rejected pledges of Omega Mu.

Tue, 02/14/2012 - 11:35 | 2157396 Dr. Engali
Dr. Engali's picture

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


Let them eat ipads.

Tue, 02/14/2012 - 11:40 | 2157410 Vergeltung
Vergeltung's picture

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

Tue, 02/14/2012 - 12:00 | 2157504 Vince Clortho
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.

Tue, 02/14/2012 - 11:39 | 2157404 battlestargalactica
battlestargalactica's picture

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

Tue, 02/14/2012 - 11:42 | 2157417 RobotTrader
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.

Tue, 02/14/2012 - 11:45 | 2157430 Clueless Economist
Clueless Economist's picture

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

Tue, 02/14/2012 - 11:44 | 2157427 RobotTrader
RobotTrader's picture

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


Not exactly the "bloodbath" everyone is reporting here.

Tue, 02/14/2012 - 12:06 | 2157531 slaughterer
slaughterer's picture

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

Tue, 02/14/2012 - 12:53 | 2157771 Tsar Pointless
Tsar Pointless's picture

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

Buy the rumor, buy buy buy the news!

Tue, 02/14/2012 - 12:55 | 2157785 Conman
Conman's picture

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

Tue, 02/14/2012 - 13:21 | 2157932 resurger
resurger's picture

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

Europe up 1% then US is up 2%


US=Eu X 0.5


US= EU X 2


Tue, 02/14/2012 - 19:13 | 2159685 LJFade
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?


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