Cantor Morning News | Financials

The BKX +1.17% higher today after a 4+% rally on Wednesday, The regionals have put in a mixed performance with MI +2.8%, HBAN +3.84%, SNV +3.15% and CMA +2.22% among the standouts, while the likes of BBT +0.39%, FITB +0.51%, KEY (1%) and MTB (0.24%) have underperformed. The trust names have been the notable laggards today with STT (0.19%), NTRS (0.38%) and BK (0.6%). Recall that Goldman cut its estimates and price targets on the trust banks earlier this week, citing soft equity markets, continued rate pressure, weaker seasonal trends and lower FX volatility and volumes. Despite the recent pickup in risk appetite that has helped the banking group reverse some of last month's nearly 11% pullback, double-dip concerns continue to garner plenty of attention. CLSA cut 2011 estimates on its bank coverage universe by an average of 5% yesterday, citing its economist's recent downgrade of the US growth outlook. The firm noted that economic headwinds will dampen bank revenue growth and prevent charge-offs from declining as quickly as expected from cyclical peaks.

Macro/Technicals

Leaders: PNX+7.57%,OZM+6.92%,+5.74%,NFP+4.67%,NARA+4.63%,GFIG+4.28%,ETFC+4.21%
Laggards: HRB-2.86%,OB_2.64%,GLAD-2.52%,CBZ-2.32%PNFP-2.19%

Earnings

HRB : H&R Block reports Q1 results (12.57)

· Company incurred a pretax charge in the current period of $21.2M, or $0.04 per share, for the cost of termination benefits in connection with its realignment of field and support services announced 19-May. The net loss from continuing operations in the current period after the severance charge was $127.6M, or $0.40 per share.

· Tax Services revenues +4.2% y/y to $91.6M. The segment reported a pretax loss of $174.6M compared to $172.0M a year ago. Absent a $19.2M charge for severance costs and related payroll taxes associated with staff reductions, total expenses fell by $12.8M, or 4.9%.

Sector News, M&A, Capital Raises

Europe agrees to create new agencies to oversee banks, insurers, financial markets – BBC-

HSBC Holdings threatens to leave UK - FT

Research Away

FHN First Horizon National removed from the US Focus List at Credit Suisse

Cantor Flows

Big Banks - BAC, C, WFC, JPM, GS, FITB, HCBK, PBCT

Mid/SmallcapBanks/S&L- FBP, RBPAA, CVBF, PCBC, CARE, OZRK,SBIB,

Brokers AMTD, ETFC,SWS,LAB

Asset Managers/Inv co’s- FIG, AMP, FNGN, PZN

Insurance- GNW, HIG, ALL, LNC, CB, SBX

CreditCards- AXP, COF, MA, V, DFS

Specialty Finance/Mort Insurers- ABK, MBI, AGO, OCN,REXI

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