S&P 500 FINANCIALS INDEX
| Value | 196.65 | |
| Change | -2.81 (-1.4%) |
The MLP index was up ¾ to the 359s (from late day buying) & the REIT index rose a fraction in the 214s. The MLP index is up 90 off its lows 6 months ago, quite a run! Junk bond funds slipped a little. But Treasuries rallied on uncertainties about Euro debts. The yield on the 10 year Treasury bond fell 6 basis points to 2.81%, its lowest level in more than a week.
Treasury yields:
| U.S. 3-month | 0.12% | |
| U.S. 2-year | 0.46% | |
| U.S. 10-year | 2.80% |
Alerian MLP Index --- YTD
Dow Jones REIT Index --- YTD
10 Year Treasury Yield Index --- YTD
Oil recovered much of its earlier losses. Gold rose to a one-week high on speculation that Europe’s sovereign-debt crisis may spread, boosting its safe haven appeal.
| BRENT CRUDE | 83.86 | -0.48 | -0.6% |
| Gold | 1362.80 | +10.50 | +0.8% |
$$ Gold Super Cycle $$
Harrah’s Entertainment failed $531M IPO in this year’s biggest week for IPOs shows buyout firms will need more than a rising stock market to sell their largest investments. Harrah's, the world’s biggest casino operator, last week became the first private equity-backed company to pull its IPO in 6 months (citing market conditions) while others had successful public offerings. A strong stock market since the end of Jun has helped buyout firms sell shares in a dozen companies, with 10 trading above their IPO price. Harrah’s withdrawal suggests investors are still is inhospitable to private-equity IPOs of portfolio companies that are highly leveraged or whose outlook is too dependent on the economy. The bigger companies need to prove they can still increase revenue & profits, a tough sell in a shaky economy. IPO investors are looking for a growth story.
Harrah's Shows Leverage Matters as Largest Buyouts Miss Out on IPO Rebound
US commercial property prices rose 4.3% in Sep from the previous month, the biggest gain in a decade, according to Moody’s. The Moody’s/REAL Commercial Property Price Index climbed 0.3% from a year earlier as a small number of high-priced deals drove up values after the measure had fallen to an 8-year low in Aug. Moody’s said, “The relatively large swings seen in the index recently are due in part to the uncertain macroeconomic environment and the effects of a thin market with low transaction volumes.” Demand is rising for the best office buildings in major markets such as New York & Washington as investors seek returns higher than fixed income. But interest in well-leased commercial properties in smaller markets may also be starting to increase. However, the index is still 43% below its Oct 2007 peak. The gauge measures overall commercial property values on a monthly basis & breaks the numbers down by property type once each qtr. This data is encouraging news for REIT investors, but keep in mind that the percentage bounce was off a low base.
U.S. Commercial Property Prices Jump Most on Record
Commercial Property Index Prices - 1 year
Enterprise GP Holdings (EPE) & Enterprise Products Partners (EPD) have merged. EPE unitholders received 1.5 EPD common units for each EPE unit owned. “Enterprise GP Holdings is pleased to complete this merger,” stated Dr. Ralph S. Cunningham, CEO of EPE. “Our voting unitholders overwhelmingly supported the merger with over 99% of the votes cast voted in favor of the merger.” “The completion of this merger is a major event in the history of Enterprise Products Partners,” said Michael A. Creel, CEO of EPD. “The permanent elimination of our general partner’s incentive distribution rights reduces our long-term cost of equity capital which will allow us to generate more accretion in terms of distributable cash flow as we continue to grow our partnership. The merger also simplifies our ownership structure.” Basically there are cost savings behind the merger which will benefit unitholders. EPD is the largest MLP in the US. The units were flat today but trade at record highs, above the previous record levels in 2008.
Enterprise GP Holdings and Enterprise Products Partners Complete MergerBusiness Wire
Enterprise Products Partners --- 3 years
Markets put in a decent showing for the day. The Dow had been down 150 but a late day rally brought it back to near break even. NAZ was up most the day & ended with a respectable gain. However, internals, the advance/decline difference was minimal, not so good. The Euro worries are significant if for no other reason than a 3 day rally in Treasuries has seen the yield on the 10 year Treasury drop 15 basis points (a very big move). And the upward climb of Treasuries rates was halted, at least for the time being. High volatility in the next 3 trading can be expected.
Dow Jones Industrials --- YTD
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