FEELS HOPELESS OUT THERE
I was watching a few MLPS trade yesterday afternoon and i noticed some wholesale dumping of shares on some volume. It could be a climax in tax loss selling or perhaps not. Hard to say when the overall tape was under pressure. The MLP index is sitting now just a handful of ticks off the August lows in the 290 area.
Since November we've traded up on 8 days and down on 23. In terms of relative performance the big cap MLPS have fared much better then some of the newer issues and/or small caps. Still i have to believe the pressure comes off at anytime and when it does the bounce should be a nice one.
No upgrades or downgrades this morning and there are no corporate developements. I would expect things to be quiet on the news front until after the new year unless some stray equity offering comes along. over 2 billion is stock has hit the market this quarter which is a lot of pressure. Now with respect to the impact of the credit market issues we'll see if this move this morning by the European Central Bank this morning does something to bring risk takers back into the fold.
Headlines as they break. Stock futures are soaring this morning up 100 dow points. Energy is higher as well.
joseph cioffi's Source Page - Associated Content
3 comments:
if there is truely no connection between the sub-prime mess and mlps than it is just a waiting game when these stocks will turn. if for some reason, there is some direct connection other than mlps are rate "like" lower rated bonds, and therefore are weak along with the banking stocks than the recovery will be a very long time coming.
lf
i think the connection is there from the standpoint of the willingness to take risk and how much do you have to pay in yield spread for it. At nearly 300 basis points and in some cases even higher, that valuation is pretty stretched at this point.
I would say its 1/3 subprime and 2/3 stock supply.
It's always darkest before the dawn. MLP's are cheap and maybe they get cheaper still, but the yields are attractive and will provide support.
DS
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