Takeaways and Observations
I spent most of the time in my Diary discussing banks.--and why I am now short the sector and have placed three money centers on my Best Ideas List (short).
And I consistently noted the correlation between yields and banks...and, in turn, a moderating rate of growth in the economy and (in theory) a vulnerable stock market.
At least one of those correlations held--lower bank prices. A good start for the multiple "Trades of the Week." JPMorgan(JPM) - Get Report , BankofAmerica(BAC) - Get Report and Citigroup(C) - Get Report all lower.
Stocks were downright boring with the narrowest trading range in weeks. Volume anemic. As an example, SPY usually trades 70 million shares daily. We will be lucky to do 30 million today.
But if you told me bond yields would be down by four basis points, iShares Russell 2000 Index (ETF)(IWM) - Get Report a beaner lower and Goldman Sachs(GS) - Get Report shares -$4+ I would have thought we would be down -0.5% to -1.0%.
No such luck!
* The U.S. Dollar continued to weaken.
* Ag commodities were a land mine today: wheat -8,corn -8, soybeans -15 and oats -3.
* Lumber -7.
* As mentioned, bond yield fell from low levels (-3 to -4 bps).
* The 2s10s 2-3 bps lower to 91 basis points. Growth slowing?
* Municipals and high yield caught bids.
* Banks suffered. Phew!
* Brokerages in pain, led by GS.
* Autos had a bid.
* Ag equipment was lower
* Old tech was mixed.
* Retail caught a small bid.
* Media weakened.
* Big pharma was slightly higher.
* Energy broadly lower.
Here are some value added contributions on our site today:
Position: LONG CPB large HIG large SDS large SDS calls SQQQ large XLE SHORT SPY small IYR small BAC JPM C.
Originally published May 30 at 4:11 p.m. EST
This will make seven financials on my Best Ideas List (short)--the others are Morgan Stanley(MS) - Get Report , Goldman Sachs(GS) - Get Report , MetLife(MET) - Get Report and Lincoln National(LNC) - Get Report .
Position: Short BAC, C, JPM.
Originally published May 30 at 1:30 p.m. EST
Jim Cramer and the AAP team hold positions in Facebook and Alphabet for their Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.
Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.
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