Trader Talk

Financials Are the Weak Sector This Morning

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

Global markets are all lower as the Eurozone finance ministers decided to delay a decision on Greek aid until Tuesday. In addition, Italy’s markets are dropping 2.5 percent after Moody’s put that country’s debt on negative watch for a downgrade on growth concerns and the likelihood of higher interest rates.

Traders are also keeping an eye on whether the UK.’s FTSE 100 can manage to stay above its key support level of its March low. The benchmark index is just 1.5 percent above that level. But as that index manages to avoid a 6.5-month low for now, a number of European markets are already at multi-month lows.

Greece just off 14.5-year low

Portugal 11-month low

Finland 9.5-month low

Italy 6.5-month low

Austria 6.5-month low

Spain 5-month low

Additionally, the lows aren’t limited to European markets, with a few Asia-Pacific markets sitting at their lowest levels since late summer.

Australia 9.5-month low

China 8.5-month low

Hong Kong 9-month low

Snapping a 6-week losing streak last week with a gain on Friday, the Dow is looking to stay above 12,000 today. (UPDATE: The Dow remains above 12,000 as of this writing.) That comes on the heels of Goldman Sachs cutting its Q2 GDP growth estimate to 2 percent (from its 3 percent) and ahead of the Fed’s second press conference on Wednesday. Despite falling slightly at the open, stocks pared losses and have turned positive as the Euro has recovered from session lows, climbing back above $1.43.


1) Financials are the weak sector this morning. European banks were initially down 2-3 percent pre-open on the unsettled situation in Greece, but have cut their losses after the markets opened.

Meanwhile, many of the after Citigroup cut estimates on Goldman Sachs , Morgan Stanley , Bank of America , and JPMorgan Chase . In its note, the Citi analyst cited lower trading volumes, particularly at the financial firms’ commodity desks.

2) PNC Financial falls 1 percent despite news that it is buying Royal Bank of Canada’s retail operations in the U.S. The $3.5 billion deal will give PNC exposure to the Southeast region of the U.S. and make it the fifth biggest back in the country.

3) Nabors falls 3 percent after the oil driller warned that its Q2 and full-year earnings will far disappoint the Street. The company blamed weakness in overseas operations following the political turmoil in the Middle East and some slowdown in parts of North America because of poor weather.

4) Agrium is giving a boost to fertilizer stocks after it significantly raised its Q2 guidance to $4.10-$4.40, way above $3.74 consensus citing robust sales and strong pricing. The stock is jumping 4 percent, while rivals CF Industries , Mosaic , Potash are all up 1-3 percent.

5) Keep an eye on luxury retailers Coach and Tiffany after reports in China mentioned that the country is expected to cut or eliminate its current high taxes on imported luxury goods. That could stimulate domestic consumption for the goods in China’s fast-growing luxury goods market since the up to 60% luxury taxes have often pushed shoppers to buy the products outside the country in Europe or Hong Kong.

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