And that is the big question this morning. In this MLP rally we have seen the spread risk disappear in some cases and as rates continue to melt up will MLPS at least revert back to the mean with regards to spread risk...which in the past has been in the 2 to 3 % range.
Melt ups like this in the bond market don't happen to often.
Note the weekly chart on the 10 year rate is beginning to break out so to me it says we go to 5.50-5.75.
And of course the MLP index is sitting on the edge of the cliff this morning as we are back down to the lows of 2 weeks ago and the bet for me is that we are going lower.
News this morning on Spectra Energy (SE) as it has set the terms of the IPO of its MLP. There will be more MLPS coming out in the next few months. More choice but more supply. We're okay as long as demand from new investors remains strong.
No other corporate news this morning and no upgrades or downgrades. The pivot point is 5.30% on the 10 year. As bonds tick from the 5,30% level the stock futures are following. So that is what we'll be watching today. Any rate spike will bring in sellers.
joseph cioffi's Source Page - Associated Content
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