The Lesser Spotted…

Just when you thought negative bank earnings had gone the way of the Dodo (for this quarter anyway), they have arisen like a Phoenix from the ashes, courtesy of Morgan Stanley. On top of this, and confounding cynics and conspiracy theorists alike, MS have published a “Sell the Rally” strategy piece. The Chinese wall seems to be working well at 1585 Broadway.

Another resurrection, Phoenix like in form, comes in the shape of some 2007 CMBS. Last week, S&P had downgraded the rating on these bonds from AAA to BBB-, the bottom of the IG heap. Yesterday however, they backtracked on that and decided they actually are worthy of AAA status, for whatever that is worth, which probably isn’t much these days.

Volumes have been reasonably healthy today, at around 80% but the market is feeling a bit deflated. This, despite China hitting new 13 month highs and Japan, well, 2 week highs. The MS and WFC figures are overshadowing these events and indeed, the beats and guidance increases coming from the likes of Altria, Pfizer, Lilly and Boeing. Perhaps last week’s Chinese retail investor stock account opening spree has also served to caution institutional investors or maybe it’s just some profit taking.

In any event, and on the topic of things lesser spotted, it looks like we may see, shock, horror, a down day?!