Consumer finance stocks have been among the worst financial sector performers in the last six months creating a negative divergence with bullish macro drivers. For instance, relative performance has far undershot the level implied by…

A dovish Fed bought the bounce a bit more time, but there is little incentive to add portfolio risk. Buy consumer finance, especially vs. banks, and expect communications equipment outperformance.

Greater safety for European taxpayers and bank depositors necessarily means more risk for bank equity and bond investors. We provide some detail, and also initiate two new short-term positions.