Keep a close eye on the financials this week as lawmakers enter the final phase of Wall Street reform.
We're hearing a handful of brokers could sell off once it's passed.
Ticonderoga Securities analyst Doug Sipkin tells us investors are missing a key component to the reform; an amendment which compels brokers who offer financial advice to adhere to a higher client-care standard.
"I don’t think the Street has priced that in; that the new legislation could force them to operate under a much higher fiduciary standard," says Sipkin.
As a result a few stocks may have a rough ride ahead.
"Raymond James stock may be vulnerable in the near-term," he says. "And on a lesser scale Morgan Stanley (could be hurt) because of the Smith Barney venture. And I’m also concerned about Schwab and TDAmeritrade , but that's also due to a lack of retail activity," he adds.
Like we so often say, one company's pain is often another's gain. Who wins to this?
"The name that's best positioned for the new world is BlackRock," reveals Sipkin. "It has a lot of exposure to passive products (ETFs); it purchased iShares."
When will it go info effect?
A joint Senate-House panel could complete final legislation as soon as Thursday. There are only 3 big points left to reconcile. According to Time magazine they are:
- Prop trading; Blanche Lincoln’s amendment requiring banks to spin off their derivatives desks.
- Volcker rule; named for former Fed chairman Paul Volcker, the move bans banks from trading their own holdings.
- New fees on firms; A house provision that would create a $150 billion fund to pay for the cost of dealing with bankrupt financial institutions, paid for with new fees on firms worth more than $50 billion.
Once the new legislation is reconciled it goes back to both chambers for another vote where it’s expected to pass quickly. Then it goes to President Obama for signatures.
The chatter in Washington is that the White House wants the whole thing signed into law by July 4.
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Trader disclosure: On June 21, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (IPSU), (BX), (PFE), (GMCR), (RSX), (TER), (AXP), (KO), (BMO), (BBY), (DIS), (XCO), (SWN), (AAPL), (IPI), (AGU), (SU), (XOM), (RDS.A), (FXB), (V), (TEVA), (COP), (OXY); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Finerman’s firm own (AAPL); Finerman & Finerman’s firm owns (BBY); Finerman’s firm owns (BP) calls; Finerman’s firm owns (C); Finerman & Finerman’s firm owns (CVS); Finerman owns (FRO); Finerman & Finerman’s firm owns (GOOG); Finerman & Finerman’s firm owns (IBM); Finerman owns (JPM) and calls; Finerman’s firm owns (JPM); Finerman owns (RIG) calls; Finerman’s firm owns (RIG) calls; Finerman owns (TGT); Fienrman owns (WMT); Finerman owns (TK); Finerman is short (IJR); Finerman is short (IWM); Finerman is short (MDY); Finerman is short (SPY); Finerman owns Russell puts; Finerman is short (IYR); Finerman is short (SPY); Finerman owns (IWM) puts’; Grasso owns (ABK); Grasso owns (BAC); Grasso owns (BGP); Grasso owns (C); Grasso owns (DYN); Grasso owns (JPM); Grasso owns (LPX); Grasso owns (NDAQ); Grasso owns (PRST)
For Scaramucci
Scaramucci & Skybridge Capital own (AAPL)
Scaramucci & Skybridge Capital own (C)
Scaramucci & Skybridge Capital own (GOOG)
Scaramucci & Skybridge Capital own (GS)
Scaramucci & Skybridge Capital own (JPM)
Scaramucci & Skybridge Capital own (WMT)
Scaramucci & Skybridge Capital own the S&P 500
Scaramucci & Skybridge Capital own the U.S. Dollar
For JoeTerranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (AMKR)
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Virtus Investment Partners owns more than 1% of (DBV)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLV)
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Edwards owns (BBY) for clients
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David Riedel
***No Disclosures***
Gene Munster
Piper Jaffray makes a market in (AAPL), (AMZN), (BIDU), (DRIV), (EBAY), (GOOG), (IACI), (SINA), (YHOO)
Mike Khouw
Cantor Fitzgerald makes a market in (LEN)
Doug Sipkin
Ticonderoga Securities LLC Is A Market Maker In (SF), (MS), (RJF), (BLK)
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