MLPs, gold & 2 year Treasury notes reach new records

Stocks had another excellent day while 2 principal hedges against stocks, gold & 2 year Treasuries, reached record levels.  Dow gained 193 taking it within 56 of 11K (an important technical level to cross), advancers ahead of decliners 4-1 (it could have been more impressive all considered) & NAZ added 55 (but 100 below its 2010 high).  Naturally banks stocks were strong.  The Financial Index had a good day (up 5 represents a very strong day) but it's still struggling to top 200 which hasn't proved that meaningful.


Value    198.34
Change   +4.58   (+2.4%)






The Alerian MLP Index reaches a new record high!!

341.79 today's close
342.14 previous record   (Jul 13, 2007)

The Alerian MLP Index was up to 343 at 3PM setting a new record.  But then there was selling bringing the index below a record close. The index is up 20+% YTD after a 62% gain last year.  A 4 year chart below shows how far it fell during the recession & the rebound since then.  How many stocks wish they had that kind of track record?  The Dow Jones REIT Index gained 3½ to the 216s.  While far from a record, it's only 2 below its 2010 high.  Junk bond funds rose, generally up less than 1%.  The 2-year note yield touched 0.3987%, matching the record low set yesterday (i.e. a record price for the note taking it closer to par).  The yield on the 10 year Treasury bond inched up a tad to 2.48%, remaining just above its 2010 low yield & is nearing its record low just above 2% reached early last year.

2 Year Treasury yields




 Treasury yields:

U.S. 3-month    0.11%
U.S. 2-year        0.40%
U.S. 10-year      2.48%

Alerian MLP Index    ---   4 years




Dow Jones REIT Index --- YTD




10 Year Treasury Yld Index --- YTD





Oil surged to the highest level in 5 months on speculation that central banks will keep fueling economic growth as the Bank of Japan pledged asset purchases.  Gold looks like it wants to soar to the heavens.  OK, it won't but the bulls are not pushing that hard.  Demand is strong even though stock prices are rising to near their highest levels this year.

CLX10.NYM ...Crude Oil Nov 10 ...82.78 ...+1.31 (+1.6%)

GCV10.CMX ...Gold Oct 10 ...1,339.90  ....24.50 (1.9%)

** Gold Super Cycle **

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 GLD   (ETF)   ---   2 months






Gold, the 2 year Treasury & MLPs are the only securities with new record highs, making for an odd combination.  The worst recession in many years is sort of over (at least that's what the economists say).  But unemployment languishes near 10%, housing is going nowhere in the dumps & the Treasury is still running massive annual deficits.  It's easy to see why there is demand for gold & Treasuries.  Where are the stock (& MLP) buyers coming from?  The so called good news today wasn't really all that spectacular.  Dow broke above the plateau it was stuck on for weeks.  Now 11K looms as an important barrier as earnings season approaches.

Dow Jones Industrials --- YTD

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