S&P 500 FINANCIALS INDEX
| Value 206.47 | Change -5.78 | % Change -2.7% |
European debt problems are bleeding over the high yield markets in the US. The Alerian MLP Index fell below that important 300 level, dropping 3¼ to the 297s (buying into the close limited losses). The REIT index dropped a very big 7+ to the 205s. Junk bond funds sold off 1-2% as investors are demanding higher yields on risky debt. But Treasuries were in demand. The yield on the 10-year Treasury bond plunged 12 basis points to 3.44%. And the VIX, volatility index shot up 5 to the 31s ( it had been around 25 on Wed). Investors are anxious & nervous.
Alerian MLP Index --- YTD
Dow Jones REIT Index -- YTD
VIX --- YTD
Oil dropped to the lowest levels in 3 months which in turn dragged down oil stocks. Traders were worried about a global economic slowdown, especially in Europe. Gold remained hot. As long as European financial markets are in turmoil, gold should be able to continue climbing to new heights.
| Oil | ...71.51 | __-2.89 | __-3.9% |
| Gold | ...1,232.40 | __3.20 | __0.3% |
The € just can't get no respect as it fell below $1.24. There is talk about parity with the US$ (i.e. its value would fall to $1.00). Europe has a huge disconnect between 2 groups of countries. The ones in the northern region are generally in better shape with stronger control over their finances. The Mediterranean ones lack controls. Taxpayers in the north are not happy about bailing out their southern neighbors. And that difference is striking home.
| EUR/USD | ...1.2387 | __-0.0136 |
Constellation Energy (CEP) reported Q1 earnings & they did earn money, $18M which was up from the prior year's total of $15M. They also reaffirmed there was no intention of paying a distribution this year (only 2 qtrs left). Instead they have to watch their borrowings closely. Their debt capacity is $205M, of which they are only using $185M presently. The units have not participated in the enormous rally for MLPs & today slipped 3¢ to 3.40.
Constellation Energy Partners Reports First Quarter 2010 Results
Constellation Energy Partners' Borrowing Base Reaffirmed at $205 Million
Constellation Energy --- 2 years
Bulls had been in charge but have clearly lost control late in the week. The Euro debt mess will drone on. This time there is no weekend conference to throw massive amounts of money at difficult problems. Greece has a May 19 deadline, it must refinance loans & now that is in doubt! In addition financial regulation is moving forward in the Senate. Every day of delay, the pols throw in more controls. And the oil spill in the Gulf needs to be fixed. These are major problems & the markets are not adjusting well.
Dow Jones Industrials -- YTD
Nasdaq --- YTD
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