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.