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Thursday, May 05, 2011


Looks another one of those critical spots on the chart for the 10 year has developed as we are pretty much at the very bottom of the range we've been in since December. For all the talk of inflation the bond market has not broken out to new highs and has pretty much treaded water while commodities have moved higher and higher. If the bond market vigilantees are around they sure are being quiet about it.

MLPS of course have benefited as rates have gone sideways and as the companies themselves have done a good job of getting back on track since 2008. The distributions continue to move up and the average yield has moved back toward the historical range of 2 to 3 points above treasuries. Earnings this morning driving news in many mlps. Exterran Partners (EXLP) puts up earnings this morning as well as Williams Partners (WPZ). Williams is highlighting a 62% increase in distributable cash flow. El Paso (EPB) is also putting up earnings which show an increase of 67% of distributable cash flow. And Targa Resources (TRGP) and Targa Natural Resources (NGLS) rounds out the earnings parade this morning.

Fractionation is the word de jour and a trinity of companies is building a new one! And the father of mlps is getting bigger this morning as Kinder Morgan (KMP) is buying midstream assets from Petrohawk.

Cramer has reassured the group what has been mentioned on this blog by a few of us...that is that the prospect of MLPS getting taxed has almost no chance of happening. And when you think about it he is right. Too many interests in Congress on both sides of the aisle will prevent that from happening. Maybe the trip down to 364.95 on the index was the climax low of the sell off from 390.

Stock futures are selling off after a rise in the jobless claims number which was higher than advertised. Energy stocks are selling off as well so look for MLPs to have a strong headwind this morning as trading gets underway. Oil is down nearly 3% and nat gas is also down about 1% as nat gas numbers are due out at 10:30am. The european central bank kept rates steady at 1.25%.

1 comment:

j_deeble said...

Thanks for the blog. I have 8 MLP and am very concerned about the tax question. Please let us know if you hear any thing.