Is Citigroup’s (C) Massive Short Interest Putting Pressure On The Banks And The Financial ETF (XLF)

“Citigroup (NYSE:C) short interest rose in the second half of April, the same period in which Citigroup surprised analysts by turning in its first quarterly profit since the second quarter of 2007. Citigroup short interest rose to 482 million shares from 416 million during the previous two-week period. Citigroup is perennially the most actively shorted ticker on the New York Stock Exchange. That’s not surprising since the bank is nearly always the most actively traded name on the long side as well,” Dan Freed Reports From The Street.

Freed goes on to say, “Citigroup short interest had risen for several successive reporting periods spanning at least four months until that string was broken in the second half of March. Citigroup short interest had continued to fall since that time. The NYSE releases short interest data twice a month. Short-sellers borrow shares in the hope of buying them at a lower price in the future and pocketing the difference. Though Citigroup saw its shares pass the $5 mark in the days following in April 19 earnings surprise, the stock eventually fell well below the $4.56 close on April 18. Citigroup shares closed Tuesday at $4.17.”

“There are several possible explanations for investors’ renewed negativity around Citigroup. First, the markets overall have taken a beating. Citigroup is down 8.55% since April 19 and the widely followed financial sector ETF XLF (NYSE:XLF) has dropped 3% during the same time period, roughly equivalent to the S&P 500’s fall. European debt crisis fears are the main reason for the weakness in equities, though a civil fraud case and criminal investigation of Goldman Sachs (NYSE:GS) have also put traders on edge. Interestingly, Goldman didn’t make an appearance on the 100 most-shorted ticker symbols on the NYSE during the second half of April,” Freed Reports.

See more to the article: HERE

Despite the markets stellar gains in today’s trading, the Financial Select Sector ETF (NYSE:XLF) is basically flat with Citigroup showing red. Citigroup accounts for approximately 4.72% of the ETF (as of today) and would not move the ETF much based on it’s weighting.  Are the bearish signals from investors in Citigroup pointing to lower prices ahead for the banks and the financial ETF?  Time will tell as financials are lagging in today’s trading despite a surge in the market.

Here are some more details on the Financial Select Sector SPDR ETF (XLF) including a list of companies within the ETF below:

Financial Select Sector SPDR (XLF)

The investment seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Financial Select Sector Index. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. This fund has adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in its policy or its underlying index. It is nondiversified.

Components and weightings as of 5/11/10.

  Name Symbol Index Weight
1 Bank of America Corp. (BAC) 9.93%
2 Wells Fargo & Co. (WFC) 9.83%
3 JPMorgan Chase & Co. (JPM) 9.52%
4 Berkshire Hathaway’B’ (BRK.B) 7.41%
5 Citigroup Inc. (C) 4.72%
6 Goldman Sachs Group Inc. (GS) 4.31%
7 American Express Co. (AXP) 2.99%
8 U.S. Bancorp (USB) 2.94%
9 MORGAN STANLEY (MS) 2.29%
10 Bank of New York Mellon Corp. (BK) 2.16%
11 PNC Financial Services Group Inc. (PNC) 2.05%
12 MetLife Inc. (MET) 2.04%
13 Prudential Financial Inc. (PRU) 1.69%
14 Simon Property Group Inc. (SPG) 1.52%
15 Travelers Cos. Inc. (TRV) 1.47%
16 BB&T Corp. (BBT) 1.39%
17 AFLAC Inc. (AFL) 1.32%
18 CME Group Inc. Cl A (CME) 1.27%
19 State Street Corp. (STT) 1.22%
20 Capital One Financial Corp. (COF) 1.18%
21 Allstate Corp. (ALL) 1.01%
22 Charles Schwab Corp. (SCHW) 0.99%
23 Chubb Corp. (CB) 0.97%
24 Franklin Resources Inc. (BEN) 0.94%
25 SunTrust Banks Inc. (STI) 0.88%
26 T. Rowe Price Group Inc. (TROW) 0.81%
27 Progressive Corp. (PGR) 0.79%
28 EQUITY RESIDENTIAL (EQR) 0.77%
29 PUBLIC STORAGE (PSA) 0.77%
30 Northern Trust Corp. (NTRS) 0.76%
31 Vornado Realty Trust (VNO) 0.74%
32 Loews Corp. (L) 0.71%
33 Marsh & McLennan Cos. (MMC) 0.71%
34 Hartford Financial Services Group Inc. (HIG) 0.68%
35 Ameriprise Financial Inc. (AMP) 0.68%
36 FIFTH THIRD BANCORP (FITB) 0.67%
37 AON Corp. (AON) 0.65%
38 Boston Properties Inc. (BXP) 0.65%
39 Host Hotels & Resorts Inc. (HST) 0.60%
40 REGIONS FINANCIAL CORP. (RF) 0.60%
41 HCP Inc. (HCP) 0.57%
42 Principal Financial Group Inc. (PFG) 0.55%
43 INVESCO Ltd. (IVZ) 0.52%
44 Lincoln National Corp. (LNC) 0.51%
45 IntercontinentalExchange Inc. (ICE) 0.51%
46 Avalonbay Communities Inc. (AVB) 0.49%
47 Discover Financial Services (DFS) 0.47%
48 Genworth Financial Inc. Cl A (GNW) 0.46%
49 NYSE EURONEXT (NYX) 0.46%
50 UNUM GROUP (UNM) 0.46%
51 Ventas Inc. (VTR) 0.44%
52 KEYCORP (KEY) 0.43%
53 Comerica Inc. (CMA) 0.43%
54 M&T Bank Corp. (MTB) 0.43%
55 Kimco Realty Corp. (KIM) 0.38%
56 Plum Creek Timber Co. Inc. REIT (PCL) 0.36%
57 Hudson City Bancorp Inc. (HCBK) 0.36%
58 XL Capital Ltd. Cl A (XL) 0.35%
59 American International Group Inc. (AIG) 0.33%
60 PROLOGIS (PLD) 0.33%
61 SLM CORP. (SLM) 0.32%
62 People’s United Financial Inc. (PBCT) 0.31%
63 Legg Mason Inc. (LM) 0.31%
64 Health Care REIT Inc. (HCN) 0.31%
65 Marshall & Ilsley Corp. (MI) 0.27%
66 Huntington Bancshares Inc. (HBAN) 0.27%
67 Leucadia National Corp. (LUK) 0.26%
68 Cincinnati Financial Corp. (CINF) 0.26%
69 CB Richard Ellis Group Inc. Cl A (CBG) 0.26%
70 ZIONS BANCORP (ZION) 0.26%
71 Torchmark Corp. (TMK) 0.25%
72 Moody’s Corp. (MCO) 0.25%
73 Assurant Inc. (AIZ) 0.24%
74 First Horizon National Corp. (FHN) 0.18%
75 E*TRADE Financial Corp. (ETFC) 0.18%
76 NASDAQ OMX Group Inc. (NDAQ) 0.17%
77 Apartment Investment & Management Co. (AIV) 0.15%
78 Janus Capital Group Inc. (JNS) 0.14%
79 Federated Investors Inc. (FII) 0.12%

Chart forFinancial Select Sector SPDR (XLF)

Leave a Reply

Your email address will not be published. Required fields are marked *