Friday, January 29, 2010 – my comments are in italics

GDP QoQ annuialized Survey 4.7% Actual 5.7% Prior 2.2%

This is a pretty large beat, but keep in mind that last quarters GDP was subsequently revised down twice.

MSFT earns 0.74 vs estimates of 0.589. Windows 7 spurred the first sales increase in a year as
consumers increased personal computer purchases and the new version of Windows. Stock is trading
up ~3% in pre-market.

• SP500 finishes @ 1084, off 13 points/1.18%; The Nazz ends off 1.91%. SP500 breaks under 1080
earlier in the session before finding its footing and bouncing a bit; since the peak last Tues 1/19 @ 1150,
equities had pulled back 6.3% as of this morning’s trough. The ~1080-1085 range (on cash) remains
strong support and helped backstop the market again today (although we did break briefly through and
hit 1078). Similar to Wed’s close, the buying seen late in today’s session wasn’t high-conviction vanilla-
driven (more short covering) - as quick as longs are to sell on the first sign of weakness, shorts are
equally as nervous and fast to cover.
• Equity Sectors – tech vs. financials – tech hogged most of the attention today, dropping 2.5%+ on
back of a bunch of weak earnings (namely QCOM). @ 19%+ of the SP500, such poor showing from this
group has an outsized impact on the broader tape. On a YTD basis, tech is now off 6%. On the flip side,
financials outperformed, led by the banks. The SP500 bank index ekes out small gains and is up nearly
10% on a YTD basis (this group rallied hard Wed on short covering and extended the move today as buy
interest broadened).

Yesterday’s Performance broken down by sector on S&P 500

Top performers were Regional Banks

(RF, HBAN, ZION) and Diversified
Financials (BAC, C, JPM, WFC)