Salient to Investors:

  • The flow of funds into the Financial Select Sector SPDR ETF turned negative for the year following its biggest withdrawal last week since 2009.  Its short position is the highest since June 2002
  • Todd Rosenbluth at S&P Capital IQ said investors should have less exposure to financials than the broader market because of poor prospects for interest rates.
  • Charles Peabody at Portales Partners said the upside for financials is taken away if the Fed keeps rates low, and we have moved to bad volatility, which makes tougher. Peabody said the jump in mergers and acquisitions has probably peaked.

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