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Wednesday, June 01, 2011


Relatively high equity prices for MLPS continue to drive some of them to the money tree and sell shares. This morning we see stock offerings on the tape from Inergy LP (NRGY) which is down 1.44 pre open. And we have shares being sold by Cheniere (LNG) which has had a nice run lately and now sells for double digits. In fact Cheniere raised the number shares as demand has been good and they priced it at 10.35. The stock is at 10.75 right now.

The mlp index managed a gain yesterday and we touched the 34 day moving average in the first half hour yesterday before pulling back.

Now comes the real test as to what happens from here. Is this the beginning of the long awaited meaningful correction? It will be a day to day battle to figure out the answer to this question. But i will say that its not a good sign that the overall market has held up quite well above support as mlps seem to be struggling here to make new highs. Of course we've had a terrific 3 year run. And if mlps are signaling a top in interest rates someone needs to tell the yield market as the 10 year today hits 3% and as of this post is looking to break under it.

No other news of consequence this morning and no upgrades or downgrades as the market heads in to the open under a little selling pressure.

1 comment:

Diego said...

how can MLPs be a leading indicator for the bond market and interest rates? given the insitutional investor base in one versus the other dont you think it would be the other way around? mlp's seem to be caught in a light market with little buying depth 1) just past div season 2) soft markets 3) a lot of issuance... wait till july and you will see the tape way above 370... yields dont lie... it's been a nice run, but we are just above 2007 levels with yields 40% higher and US treasuries 40% lower ...