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Tuesday, August 31, 2010

A SPECIAL REBALANCING!



You have to love it when a simple rebalancing of a stock index is called "special" meaning this has extra meaning to our lives i suppose...but out goes WMZ (Willams Partners ) which is being combined with Williams Partners (WPZ) and in goes Vanguard Natural Resources (VNR). For details on the weightings and all the rest of that sort of info head for the Alerian website. All of this takes effect this afternoon at the close.

Markets opened lower this morning and went below 10000 again and that held so now we're up on the Dow. The mlp index is down but off its lows off about half a buck. Winners and losers are split pretty much down the middle..50-50 and the moves so far are between minus 50 cents and plus 50 cents. The vast majority of mlps are within a few pennies of unchanged. No corporate drivers this morning on the news front and no upgrades or downgrades either. Crosstex (XTEX) and Crosstex (XTXI) are both up about 25 cents which is a nice move on a percentage basis. No news there.

Hurricane Earl will be threading the needle along the east coast Thursday and Friday and it looks like a near miss for the big cities. Eastern Long Island and Cape Cod may get a bit of a closer brush. All the latest from the National Hurricane Center.

Monday, August 30, 2010

2 points down on the mlp index as we digest lunch. Not much happening on this last day of the month other than an undoing of some of Friday's rally which for now, looks like nothing more than a dead cat bounce. Aliiance Resource Partners (ARPL) leads the losers list down 1 while Alliance Resource Holdings (AHGP) leads the winners list up 75 cents and over 40 dollars.
Do umbrellas cause rain? The answer lies here where someone takes issue with this concept when it comes to fed policy.
SEPTEMBER LOOMS!



Last day of August in a month where mlps pretty much went nowhere. MLPS are down off their highs at the beginning of the month when we got to 332 on the index; we are at 322 this morning. The dow industrials were at 10,700 at the beginning of the month and we are under 10,200 this morning before the open.

Question is whether that platform we are building right now is a launching pad or a diving board? We'll find out soon enough. 9800 held and i guess the fact that everyone is talking about all these bearish patterns like black swans and Hindenberg indicators is probably a good thing. Still its never easy picking which way we're going in theses short term moves.

Last week we saw the debut of the AMZ MLP index etf which is a simplified mlp etf. However read the piece about the tradeoff of getting a 1099 vs a K-1. Being taxed like a corporation could hurt longer term performance. Frankly turbo tax makes putting in k-1s so easy. Why trade off performance just because you need to hit a few extra keys on the keyboard?

Went to bed last night with stock futures up over 7 but they sold off overnight as the dollar rallies and rates fell. Stock futures are a little lower this morning ahead of the open. Crude is down but nat gas is up. Rates are down as well. Speaking of rates 2.50 on the 10 year and 3.50 on the 30 year provided a place for rates to bounce after the unrelenting decline that began in April when the 10 year was sitting at 4%. Not going to make any predicitions about where we go from here but stocks and yields have been moving together. No corporate headlines to speak of this morning. Nothing on the upgrade downgrade list either.

Hurricane Earl is becoming a major hurricane but its headed for the east coast and not the gulf coast so there is no energy impact. The hurricane is forecast to stay offshore...at least for now although weather computer models have shifted a little further west. All the latest from the National Hurricane Center.

Friday, August 27, 2010

Markets are apparently okay with the Bernake view that the fed stands ready to continue to push on the string if it needs to. That and he sees the US Econony growing in 2011 and beyond (try not to laugh)...dow after an initail drop is now up about 120 points. Rates are moving higher by 10 or so basis points and the mlp is lagging up up 1.66 at 321 and some change. Looks like markets finally have something to trade on to move higher and thats all it is so far. 9800-9900 was the last bottom on the chart so we did make it to the bottom of the recent range.
FRIDAY BOUNCE?



Its been one of those weeks where the market has been on a slow rollover and we're under 10,000 on the dow this morning but futures pointing higher to start thanks to GDP coming in a little better ( or not as bad) as expectations. But while the dow was pushing lower yesterday MLPS pushed higher at the close and is sitting at around 320 to start the day. With no news drivers on the corporate side we continue to be at the mercy of the market to some degree. But 7 percent yields vs a 2 handle on the 10 year and the money keeps coming.

No upgrades or downgrades this morning. We have stock futures up 60 on the dow pre open. Oil is a little lower. Nat gas is flat and Euro markets are higher. So maybe we can manage an up close today as the second to last week of summer comes to an end. Next week we leave August and head into September. Not the kindest of months.

Thursday, August 26, 2010

MLPS have turned slighty higher up .60 and over 320 in early afternoon trade.
Market crash coming soon if you believe the Hindenberg signal! It apparently works everytime...except when it doesn't!

Holding lower at lunch time. Not looking pretty out there but one never knows.
Market just can't hold on and i fear a breakdown below 10,000 is coming today on a closing basis..and of course this prediction makes a 100 point rally into the close a certainty! Hope im wrong on the breakdown.
Market can't get out of its own way. Averages all down along with mlp index.

Wednesday, August 25, 2010

Rally attempt off the lows!
Drip drip drip drip
ANOTHER DAY, ANOTHER DROP IN RATES!






The unrelenting drop in long rates continues and it appears we are on our way to the flight to safety lows of 2008 on both the 10 year and the 30 year. The first time was a run to the safety of treasuries but this time it appears to be more of deflationary spiral that is sparking the buying of bonds with both hands. The economy is in shambles and for all the trillions of dollars put out there, the bond market has been telling us for a long time that its not going to work. For mlps the unrelenting fall in rates has kept them floating above the rest of the stock market. Stocks look like they are going to at least re-test the 9800 low and with us going into the seasonal period of weakness, my guess is we're going to break below that, And at some point mlps will probably sell down as well, although not to the extent everything else does.
Not the prettiest looking chart but i guess our only help that 9800 holds on the dow and we form some sort of triple bottom. If only long rates would stop going down!!!

MLPS held up pretty well yesterday losing a little more than a point on the index while the overall market took gas. Stock futures are lower this morning and it looks like we'll be under 10000 at the open. Deflation continues. 2.43 on the 10 year and 3.48 on the 30 year! We have no corporate developements and no upgrades or downgrades.

Tuesday, August 24, 2010

MARKETS AND RATES SHARPLY LOWER


Just a brief post here as i have been running back and forth from work, daughter at college, daughter at soccer practice, daughter flying from California (three different daughters) and trying to catch up on day today. Dow down 120 at 2pm and mlp index down about 3 at 319 and change. Sunoco Logistics (SXL) the latest to do an equity offering with the stock down about 2. And look at those bond yields sinking to all time lows in some cases. Under 2.50 on the 10 year! Not looking good is it. Not much other breaking news to speak of.

Monday, August 23, 2010

Early rally attempt looks to be running out of gas. Mlps well off the highs.
NEAR ZERO RATES FOR SOME TIME TO COME!



This Paul Krugman (NY Times) blog piece this morning i think is actually worth a read since at least Mr Krugman is talking about economics this morning and not about his far left wing politics. I think he makes an interesting point here and argues that given the bleak outlook for the economy, we can forget about the bond bubble. Unless something unforseen happens (and it might) long term rates are going to reflect a zero interest rate enviornment for some time to come.


If we use the CBO forecast we're talking at least another 3 years. Now think about this. If long term rates are going to stay below 3% percent for the next 3 years and MLPS can grow their distributions by 2% a year for the next 3 years (not unreasonable), MLPS could enjoy bull market conditions for sometime to come. The short term chart is holding support. The dow chart does not look as good as we are below support again and we may come back down to the bottm around 9700. And we're in the last 2 weeks of August which usually means pretty boring trading on low volume.

The news front is pretty quiet this morning. We have no corporate headlines for MLPS and no upgrades or downgrades so far. Stock futures start the day higher. Energy is higher as well. Lots of M&A this morning giving the bulls some gas but not sure how long it will last beyond the open.

Moving daughter number 2 back to school so i will be posting from my phone when i get the chance.

Friday, August 20, 2010

WEEK ENDS SOFT AS MARKETS SEE DOUBLE DIP!



I guess with all the soft economic data lately and the fact that long rates have plunged to record lows could be a clue that a double dip recession looms. Im not sure who is really surprised by this but nonetheless markets are coming to terms with this. MLPS are holding up under the weight of the selling thanks to a 2.50% year and a 3.6 30 year as they approach all time lows. Stock futures this morning are soft but off the lows on an options expiration Friday. Usually we don't get much news to trade on as far as the corporate side goes and this Friday is no exception. Seeking Alpha has a positive look on Atlas Pipeline Partners (APL) and the company becomes safe to buy again once it resumes its distribution. The company told us a few weeks ago that they will be doing so in q3.

Stock futures pointing to a lower open so lets see this play out and then we'll revisit. 90 degrees and low humidity in NYC today which means pool and beach time!

Thursday, August 19, 2010

Late first post with the markets down thanks to horrible economic data. MLPS holding up as rates on the long end plunge yet again.

Dealing with basement flood repair so will try and post later.

Wednesday, August 18, 2010

Some green on the screen with Breitburn (BBEP) leading a short but growing list of winners albeit small ones. The mlp index is now down only 1 with the dow up 23 in what has been pretty watching paint dry kind of day. Other than Energy Transfer Partners (ETP) which is down on a stock offering there really isn't too much to highlight today.
2.59 on the 10 year and 3.69 on the 30 years as yields just fall through the floor. Meridith Whitney had it right.



Mlps down 2 and some change as the dow is down 70 points so far this morning.
RBC MAKING LOTS OF MOVES!



RBC Captial Markets is doing a lot this morning on the anal-ist front so here is a rundown.

Raising Breitburn Energy Partners (BBEP) to outperform from market perform
Cuts EV Partners (EVEP) to market perform from outperform
Cuts Encore Energy Partners (ENP) to market perform from outperform
Raises the target on Linn Energy (LINE) to 34 from 30 bucks
Raises the target on Legacy Partners (LGCY) to 26 from 24.

So far none of those stocks seeing any action in the premarket. I have often found that in some cases its good to watch the action of the stocks that are cut. If they wind up closing higher on the news, they tend to move to higher highs in the weeks that follow. Doesn't always work though. For example if the cut comes as a result of an earnings miss or (heaven forbid) a distribution cut.

Energy Transfer Partners (ETP) is going to the well with an equity offering this morning and the stock is down over a buck in the pre open. That will probably weigh a bit on the mlp index. Otherwise we're coming off yesterday's 2 point mlp index gain. Not exactly a rip roaring day to the upside but it was positive. And we continue to watch this relentless drop in interest rates as it appears that the fed is doing everything it can to lower interest rates on the long end, perhaps to bring action to mortgage refinancing to stimulate the economy. Good luck with that. I know im now within a few years of finishing off the monthly payment and frankly i want it to go away; even if i can get cheap money at 4 percent or less.

Stock futures are picking up a little steam ahead of the open. The energy complex is lower except for nat gas. The tropics should be heating up in the next week or 2 but whether that means storms in the Gulf of Mexico or not remains to to be seen. The dollar is down this morning and rates are a little lower.

Okay bring on the open. Frankly i continue to get concerned over the fact that mlps have pretty much stopped moving higher. Even on up days now we are starting to underperform. Could be just a short term blip but something to keep an eye on. How much lower can rates go? Are we getting close to a tipping point?

Tuesday, August 17, 2010

TUESDAY MORNING (AFTER MONDAY RACING!)


Back from a one day trip up to Saratoga where i left some money at the race track but not much, the world wakes up to the takeover offer of a shitty company, and dreams that we too could one day wake up to such news on an mlp or a gp and see a nice gain of 20 or 30 percent. Maybe Terra Nitrogen (TNH) which is the shit company in MLP land. Othewise its another typical Tuesday in August where we sit and watch interest rates continue their unrelenting march to 0% and mlps in turn hold their own just off the top of the range and hovering below new all time highs. Not much happening this morning on the news front.

The mlp chart is still looking a bit toppy in here but the support band below us held yet again so the bull market here remains intact although the move to new lows in interest rates is not coming with a move to new highs in mlps as measured by the index. It may be telling us something but this massiive pile on in bonds we're seeing seems nothing short of a frenzy and it has to come to an end eventually...unless of course we are really becoming Japan and heading for free money.

Monday, August 16, 2010

At saratoga today enjoying races.

Friday, August 13, 2010

Approaching a 6 point gain on the MLP index which is a nice way to finish a tough week and we are coming off the support area so 312 looks like the low for this move short term.
MLPS ON THE MOVE...UP 4 SO FAR



Now that we have all these leveraged ETFs and ETNs in mlp land we are seeing the result. Today is options expirations expiration and we're seeing a flat market overall but the mlp index jumped higher right out of the gate and the index is up 4 points. I knew something was up with Kinder Morgan(KMP) up 1.60 in the premarket on some volume. Kinder is leading the way higher along with Markwest (MWE) on a Citigroup target raise, Oneok (OKS) and Nustar (NS) all up 1 or more. As i type the index is approaching a 5 point gain as the dow is now moving higher.

Its a summer Friday and we're entitled to a bounce here. Lets see how far they can take it.

Thursday, August 12, 2010

Looks like a rally attempt is underway here as we opened near the lows of the day and the tape has firmed up. Mlps went to 312 and turned now at 315 and climbing.
Down 5 in here on the mlp index as the market works through the open. Sunoco Logistics (SXL) is the bigges loser down 1 and some change. Breitburn (BBEP) gets an upgrade from Citigroup to buy from hold. Stock is flat right now which is the best it can do on a day like today.
ANOTHER ROUGH START AHEAD!



Yesterday's market drop and mlp index drop comes with rates falling to new lows on the long end so its apparent that the rate drop gas that mlps were running on is not working right now. The focus is shifting to the idea of another recession coming so markets are selling and bond yields just keep falling. The dow is sitting right on the moving average cross and its going to break that at the open this morning. BTW the 200 day is at 10,266 on the expotential chart.



Mlps continue to flounder here and 310 is about as far as i would like to see this drop go. The 200 day sits at 295 so we are a couple of days away from there unless of course we get one of those out of control sell offs that we saw in 2008.

Martin Midstream joins the list of companies doing public offerings and the stock is down over 1 pre market. Citigroup downgrade Inergy LP to hold from buy which basically means you go ahead and hold while I sell.

Looking pretty bleak here at the start but lets see if support kicks in. Nat gas numbers coming at 10:30am. The tropics are dead right now so there is nothing coming from that angle.

Wednesday, August 11, 2010

Those of you wondering about the new leveraged MLP which is 2x the mlp index...symbol MLPL..it is down 5.66% right now while the mlp index is down 2.56% so pretty much in line. Sunoco Logistics (SXL) is the biggest mlp loser down 2 and change. Every mlp and gp is down right now.
Hit the lows at minus 9.25 ish in the low 316s. Market tone this afternoon dictates whethr we bounce now or go lower. We r in the support zone on the chart.
Down 7.78 and at the lows of the day at 317.95! Ugly in the group today with 1 to 2 point losses pretty much strewn across the lot of the big mlps. Another stock offering comes to us via EV Partners (EVEP) whose stock has nearly doubled since the last time they did this. Stock is down 1.50 today but given the tape..it would have been down that much anyway. Buckeye Partners (BPL) and Inergy LP (NRGY) are both down almost 2 points although Wunderlich upgrades Inergy to buy from hold.
In view of the WSJ piece i posted a few days ago about mlp risk here is a pdf with a little about it along with the components.

Down 6.50 on the mlp index with lots of mlps down 1 to 2 points. The tape is littered with losses and we are now in the support zone on the chart. 310 would be about as far as i would like to see any correction go.
Down 200 in a hurry and mlps down 6!
video
HIGH PRICES BRING PUBLIC OFFERINGS!



Two mlps are taking advantage of a robust stock price to sell stock Regency Partners (RGNC) and DCP Midstream (DPM) are doing secondary offerings. Both stocks are trading just below their 52 week highs and both stocks are down by more than a buck each in the pre market. nd from yesterday Markwest (MWE) put up earnings and they have a conference call set for late this afternoon. Those are the corporate news items this morning. The overall market is the story this morning as perhaps markets re think the fed move and stock futures are down 140 dow points pre open. However look at the dow chart and notice that the moving averages are crossing on the dow chart and are turning positive. This lends to the idea that the dow breakout above 10500 is holding and the rising moving averages will lend support here.




The mlp chart can be looked at 2 ways. Do we have a short term double top in place? If so watch support lines below and see if they hold this morning. On the upside notice that we have these selloffs everytime we go through the distribution cycle and (at least so far) they have been great entry points to take us to higher highs. The key will be what happens to long rates as lately we've been pretty much tied to the hip of long rates. I suggest you watch the 30 year rather than the 10 year (TYX) for clues to this as those rates have not gone to new lows just as mlps have not gone to new trading highs. If mlps break down from here it will be a sign that rates are about as low as they are going to get. Bulls at least will have the opportunity to pick up additional shares at lower prices. The open looms in 40 minutes.

Tuesday, August 10, 2010

Fed speak in half an hour. MLP and market off the lows but still down. Kinder Morgan (KMP) which is one of the 4 big AMZ index components was lower but has now turned higher by 43 cents. Rates are a little lower on the long end.
Both Inergy's are down 2 points this morning. Fast money appears to be getting out.
We're down 5 points on the mlp index as we quickly come into support around 322. Inergy LP and Inergy GP (NRGY,NRGP) are both down over a point and lead the losers list. Remember now with their merger announcement they are pretty much tied to the hip. Alliance Resource (AHGP), EV Partners (EVEP), Oneok (OKS) and TC Pipelines (TCLP) among the 1 point plus losers. Nothing much on the gainers list. Fractional losses pretty much across the board in early trade.
Wall Street Journal piece raises some red flags for mlps. Thanks Max for the heads up.

Down over 4 points at the open here.
FED MEETING AND A SEA CHANGE?



One of the dangers of reading too much into very short term moves is that you make decisions on events that are temporary before the primary trend moves on. On the other hand sometimes they ring the bell when there are only one or two people in the dining room. We have seen a breakdown in yields since April and in the last 2 weeks the 10 year has pushed itself down to new lows in yield as we sit this morning barely north of 2.80%



However take a look at the 30 year yield. There was a day when we actually paid attention to the 30 year instead of the 10 year but i think its time we look. Notice that the 30 year went to new lows on July 1st at 3.85 and has not sold down to new lows in yield and is holding the 4% level. This may not mean anything however with the fed meeting today and the feeling they may fire some more bullets out of the money gun, might this divergence be signaling a (final) bottom in long term rates? If their aim is to steepen the yield curve, what if bond traders finally decide they've had enough and begin to rachet long term rates higher?
And what of MLPS? Yesterday saw a 3 point plus loss after being down 5 at the lows on a day when the overall market closed a little higher. Again just one day but what if the stalling of MLPS in here is a signal that money may start to come out of yield stocks? Is the leadership of mlps finally coming to an end here or, as i said earlier, am i reading too much into this short term blip? I guess the key will be to watch what happens after 2:15pm when the fed announces what they are or aren't doing and see the reactions of the bond market.

Lots of red on the tape out there this morning with stock futures down and energy futures down ahead of the fed. No news on the mlp tape this morning. Gold is down and the dollar is up. Yields are a little lower this morning with weak markets. Credit Suisse ups its target price to 27 bucks on Western Gas (WES) from 24 while keeping the stock at a neutral.

So we have food for thought here this morning ahead of the open and ahead of what could be a decisive day.....or perhaps not!

Monday, August 09, 2010

INERGY BUYS INERGY







The LP buys the GP and the 2 become 1! Inergy Partners LP (NRGY) is going to merge with Inergy Holdings (NRGP) where holders of the GP will get 0.77 shares of the LP. The deal is neutral to earnings and holders will get $2.82 annual distribution. Both stocks are trading at or near all time highs going into today and the 2 stocks have been among the best performers in mlp land. Those 2 charts are ones that anyone would love and note that the move to all time highs here for both issues happened back around 9 months ago so both these issues have been on a tear for quite awhile. Judging from the takeover ratio it appears that the deal is being done pretty much at Friday's closing prices so there isn't much of a premium.

Elsewhere this morning Regency Partners (RGNC) announces earnings and is aquiring a gas services company for $185 million. We also have Energy Transfer Partners (ETP) putting up earnings numbers this morning. And with the LP reports so does the GP, as we have numbers from Energy Transfer Equity (ETE). And one more deal this morning as Targa Resources is selling assets to Targa Resource Partners (NGLS). And finally record earnings this morning from Quicksilver Gas. One anal-ist move this morning as Barclays ups the price target on DCP Midstream from 33 to 37 bucks and keeps it at an overweight.

Pre ope futures are higher after markets came back in the last hour Friday. Crude is up this morning but nat gas is down a little. Euro markets are up and rates are starting the day a little higher. So we wait for the open which looms in about an hour.

Friday, August 06, 2010

Mlps down 3 on the index in line with the overall tape which is down.
MLP index down 3 with the dow down 150. That 10500 breakout level along with support comes into question here. Mlps still doing relatively better. Friday afternoon in the summertime might bring buyers into the close but i think everyone may be just waiting to square things away for the weekend.

Quite the round trip. This one traded down to a buck in the great bear market. Back to 13.50 right now.
Judging from the pre market action the Crosstex news may be priced in. We'll know shortly.
ON TRACK FOR A PAYOUT!



Not pretty in the overall market this morning with the employment numbers being nothing short of horrible. Anyone who lives and works in the real world should not be surprised. This is driving the yield down to 2.85% and the 2 year is approaching 0.50% which would be a record low. Stock futures are down a little less than a hundred points. However the drive to yield will probably drive money to mlps as has been the case lately. There are some news drivers for MLPS this morning and the biggest one is Crosstex Energy (XTEX,XTXI) which posted earnings and distribution guidance. The company indicates its on track to resume the distribution next quarter at .25 on the LP and .07 on the common. Stock is up in the premarket.

Earnings and a distribution hike from Buckeye Partners (BPL) which makes it 25 payout hikes in a row. Stock is already trading near new all time highs. Cheniere Energy (CQP) also has earnings this morning and tells us that the distribution will be 1.70 this year. Nothing encouraging as far as the distribution goes from Constellation Energy Partners (CEP) which says in its earnings report that no distribution coming at least through the 4th quarter.

The open is approaching as rates drop, the dollar is being sold off hard, and energy is lower.

Thursday, August 05, 2010

NAT GAS VS OIL

Thought this was interesting.
Global Partners (GLP) and Martin Midstream (MMLP) are both one point losers today as they are both coming off earnings reports that were less than stellar. Global said they see the next quarter a little weaker while Martin Midstream's numbers appeared light to some. Nustar (NS) is down 75 cents on nothing in particular. Meanwhile Buckeye Partners (BPL) Suburban Propane (SPH) Enbridge (EEP) and Magellan Midstream (MMP) among the fractional winners. The mlp index remains basically unchanged.
Markets lower but not by much. Mlps higher but not by much!
MORE EARNINGS NEWS!



We're rounding off the end of the ex distribution cycle and we have more earnings news this morning on a few mlps. Spectra Energy (SEP) reports earnings and says they are well on their way to there distributable cash flow target for this year. Targa Natural Resouces (NGLS) says its DCF ratio is 1.4 and calls its results strong. Genesis Energy (GEL) says its DCF was a healthy 1.5. And Suburban Propane (SPH) had another good quarter and ups the payout by half a cent! I love those .005 distribution hikes.

Markets going to start lower on jobless claims and a few other things plus we are a little overbought here anyway. MLPS may catch a bid with the 10 year yield down to 2.92 right from 2.95% and remember that lately we have joined at the hip here with moves in interest rates. So we may see a run to yield again today after we get through the opening noise.

Wednesday, August 04, 2010

Mlps moving up as markets rally into the last hour.
Holding their own here in early afternoon with fractional moves on the tape split equally in both directions. Ex distributions mostly on the losing side and dragging the index abit which is up a fraction at 332 and small change. Looks like overall tape has some upside bias but so far its like watching paint dry in the summertime.
MLPS EYEING 340 WHILE DOW EYES 10900!





The numbers indicated in the headline are the next logical stop for both averages. The mlp index hitting 340 seems to hinge on the 10 year staying around 3% as the yield spread continues to drive money one way or the other. The dow completed its "w" bottom when it broke above 10500 and now 10900 seems the next logical place where a little resistence could occur. Ultimately 11,200 is the target short term (next 6 weeks or so).

More ex distribtutions today with Nustar (NS) being the biggest one to go by $1.065. Also going ex dis are Magellan (MMP) DCP Midstream (DPM) and Penn Virginia Resources (PVR). So far the selling on the ex-dis date has been pretty well contained. No reason to see why it should be any different today. Barclays raises its target price on Magellan to 52 bucks while keeping it a hold while Buckeye Partners (BPL) gets downgraded to hold from buy at Wunderlich.

Stock futures have turned a little higher ahead of the open as the ADP numbers where pretty much in line which i guess means relief they weren't worse. Energy is down just a little this morning ahead of oil inventory numbers. The dollar is catching a bid this morning and rates are down..2.88% on the 10 year!

Tuesday, August 03, 2010

OFF THE LOWS OF THE DAY!



Mlps pulled back a ouple of points on the index this morning as the overall market is a little softer. News items this morning include Magellan Midstream (MMP) rolling along with another good quarter. Magellan is down a fraction this morning. Buckeye Partners (BPL) is buying an additional interest in a pipeline. The stock is also down fractionally. UBS moving up target prices on Alliance Holdings (AHD) while cutting Nustar (NS) Nustar Holdings (NS) to neutral from buy. Nustars are both down...Alliance Holdings is up a little.

Otherwise not much else happening this morning as we watch paint dry. Crude is up nearing 82 bucks and nat gas is up as well. 10 year rates are lower this morning by a few ticks and that should support mlp prices.

Monday, August 02, 2010

Just a solid day here with the index up well over 3 and the dow up about 200. Lots of solid gains in the usual suspects. Kinder Morgan (KMP) is not doing much today so that mlp index gain is pretty solid among the rest of the group. Enbridge Energy Partners (EEP) is up nearly 2 points and is the leader today. Nustar (NS) is up a strong fraction on its earnings. Alliance Resource Partners (ARLP) is up 1 on the target raise at citi group. Overall a very good day and no notable losers on the list.
MONDAY MORNING RALLY



When you wake up on a Monday morning with a 100 point rally in Dow futures you know its going to be a good start to the day and a solid start to MLPS at the open. Friday MLPS staged a huge reversal from down 3 to up over 5 at the close. No coincidence that the 10 year dropped 11 basis points to 2.90% as the two have been attached at the hip lately. Where rates go mlps go so with the 10 year up a few basis points this morning it might cause mlps to pause after the open. At this point when you look at these charts you wonder how much lower can 10 year rates go.



The dow chart is coming off that W bottom and Friday's flat close after a 100 point drop tells me that markets want to go up overall so its another trip up to 11,200 and sell offs should be bought short term.


Just want to go back to the 10 year for a momment and i think this trade has probably burned more people as the talk by just about everyone is that rates have nowhere to go but up. That was with the 10 year at 4 pct back in April and rates of course have dropped 25% since then. So much for conventional wisdom. But unless we are about to go into a double dip recession its hard to see rates going much lower from year. No one wants to live in a world if the 10 year has to go back down to retest that 2% panic low we saw in December of 2008.

Nustar Energy (NS) posts record earnings and a distribution which is unchanged from last quarter. Distributable cash flow was a healthy 1.62 vs 2.27 a year ago which is lower but still well above 1 times cash flow. There are some one time items which lower the the net earnings number but the companys does provide a strong outlook for the rest of 2010. Western Gas (WES) is forking over 1/2 billion bucks for some Anandarko assets. The company says it will finance the deal with loans and a credit facility but do not mention a secondary. Barclays joins the Altas Pipeline Partners (APL) party as the upgrade the stock this morning going from overweight to equal weight. Atlas went from 12 to 18 last week on the prospect of the distribution coming back next quarter.

Thats it from the news front this morning. The open looms large in less than an hour. I have a basement flood to contend with as my hot water heater blew over the weekend. So its back to draining and mopping.