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Monday, February 27, 2012


The unrelenting march to new all time highs continues for mlps and we are but another 10% away from seeing a triple of unit prices since the October 2008 low at 145. The movement of cash into anything paying yield continues and it has been totally justified if your mlp has been growing distributions at 2 to 3% quarterly clip with no signs of stopping. Otherwise you wind up like Inergy LP which has seen its stock price cut in half as the distribution appears unsustainable. There are plenty of reasons to worry that the march higher could come to a halt at anytime or even (gasp!) drop for a few days in a row. You get the sense that everyone thinks markets can only go up these days. And that alone should be cause for concern.

Nat gas and oil continue to go their separate ways though nat gas at least seems to have stopped going down. Brent on the other hand has been up 6 out of the last seven days and is trying to breakout of this base that has formed in the past year. If 125 goes than look at above. I would think an event like that will be news driven and probably negative for equities overall.

In mlp land Holly Partners (HEP) is buying back its senior notes in a tender offer. The stock has been one of the better mlp performers of late. El Paso Partners (EPB) is putting up earnings this morning and DCP Midstream (DPM) will put their earnings up after the close.

Stock futures this morning are following Europe lower as the never ending Greece saga continues to...well....never end! Crude is pulling back a dollar on West Texas at 1o8 and Brent at 124. Gas here in the people's republic of NY is hovering around 4 dollars. Nat gas is flat at 2.55. The 10 year yield continues under 2%. Markets are due for some sort of pullback but betting on one lately has been a rather fruitless affair.

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