S&P 500 FINANCIALS INDEX
| Value | 191.73 | |
| Change | -3.46 (-1.8%) |
The Alerian MLP Index fell 2 to the 325s while the REIT index was off almost 2 to the 212s. Junk bond funds were flat to higher. On increased nervousness in the markets the VIX, volatility index, shot up 2+ to the 23s. The € fell almost 2 pennies on increased worries about European bank problems. Treasuries are back in demand. The yield on the 10 year Treasury bond dropped 6 basis points to under 2.65% & may be headed back for the sub 2.50% recent lows.
| U.S. 3-month | 0.13% | |
| U.S. 2-year | 0.49% | |
| U.S. 10-year | 2.64% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
VIX --- 2 weeks
10-Year Treasury Yld Index --- 2 weeks
Oil was lower related to minimal storm activity in the Gulf (which could disrupt oil production). But gold keeps moving higher, getting with a few dollars of its recent record prices as stock market averages sold off.
| CLV10.NYM | ...Crude Oil Oct 10 | ...72.92 | ... 1.68 .......(2.3%) |
| Gold | 1259.40 | +8.30 | +0.7% |
Many stocks have yields that exceed bond yields, more than at any time in at least 15 years. Even some Dividend Aristocrat stocks have yields that top the 3.8% yields available in the bond markets. Johnson & Johnson (JNJ), a Dividend Aristocrat, sold bonds last month with a yield of 2.95% while the stock offers a 3.7% yield. The last time the number of S&P 500 companies offered stock yields above the corporate bond rate was in Mar 2003. This makes for a strange combination, stock yields and gold are king.
Dividends Beating Bond Yields by Most in 15 Years
Enterprise Products Partners (EPD), a midstream energy services MLP, wants to buy Enterprise GP Holdings (EPE) for about $8B to reduce its capital costs & simplify its partnership structure. EPE owns the general partner of & limited partner interests in EPD. EPE unitholders would receive 1.5 EPD units in exchange for each EPE unit. EPE jumped 6.10 to 56 while EPD fell 38¢ to 38.07. The merger will lower EPD long-term cost of capital through the permanent elimination of the general partner's incentive distribution rights. Since EPD is the largest MLP, this may be a signal for other MLPs to buy out their general partners that manage the businesses.
Enterprise Products to Buy Pipeline Partnership for More Than $8 Billion
Enterprise GP Holdings (EPE) -- 2 years
Enterprise Products (EPD) --- 2 years
After markets close in Aug, they had a mini rally in early Sep. But volume was low. Now traders are back & today's sell-off may be a better indicator about where stocks will go in Sep.
Dow Jones Industrials --- 2 weeks
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