S&P 500 FINANCIALS INDEX
| Value | 215.25 | |
| Change | 2.33 (1.1%) |
The MLP index rose 2+ to the 2567s, still near where it's been for the last 2 months. The REIT was up another 2+, climbing 10 in the last week to the 222s. Junk bond funds are slightly higher but little changed. There is little going on with Treasuries, the yield on the 10 year Treasury inched up a fraction of a basis point, still at 3.33%.
Treasury yields:
| U.S. 3-month | 0.13 | |
| U.S. 2-year | 0.61 | |
| U.S. 10-year | 3.31 |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Crude oil futures rose to the highest level in more than 2 years after the Energy Dept said oil stockpiles dropped 5.33M barrels. Nothing like cold weather to use up inventories. Gold was little changed after advancing 27% this year on demand for a haven from escalating European debt.
| CLG11.NYM | ...Crude Oil Feb 11 | ...90.60 | ... 0.78 | (0.9%) |
| GCZ10.CMX | ....Gold Dec 10 | .....1,386.80 | ..... 1.40 (0.1%) |
Gold Super Cycle Link!
Oil stockpiles -- 1 year
Photo: Bloomberg
Sales of previously owned homes edged up in Nov, the 3rd increase in 4 months after a dismal summer for home-buying. The National Association of Realtors sais people bought previously owned homes at an annual rate of 4.68M units last month, a gain of 5.6% from Oct, following the worst summer for home sales in more than a decade. Even with the gains, sales were about 10% below the 5.2M sales pace considered a healthy pace for housing. The national median price for a home sold in Nov was $170M, up a tad from the prior month. Purchases of single-family homes climbed 6.7% to a 4.15M annual rate from a month earlier but sales of condominiums & townhouses dropped 1.9%. The number of previously owned homes on the market fell 4% to 3.71M. At the current sales pace, it would take 9.5 months to sell those houses, compared with 10.5 months in Oct. A month’s supply in the 8-9 months range is consistent with stable home prices. Distressed sales, still a very important component of the total, accounted for 33% of total sales (similar to prior months). At best this can only be considered moderately encouraging.
Sales of U.S. Existing Homes Increase Less Than Forecast
Sales of previously owned homes - 1 year
The economy grew at a moderate pace lin Q3, reflecting stronger spending by businesses to replenish stockpiles & more recent barometers suggest the economy is gaining momentum in the final months of the year. GDP increased at a 2.6% annual rate in Q3 according to the Commerce Dept, up from the 2.5% pace estimated a month ago. While businesses spent more to build inventories, consumers spent a bit less. Predictions are for the economy to strengthened in Q4, perhaps at a 3.5% pace or better mainly because consumers are spending more freely again. Expectations are even higher for 2011, around 4%. However, the economy would need to grow by 5% for a full year to push down the unemployment rate by a full percentage point which compares with an expected rate of only 2.8% this year..
Sales of U.S. Existing Homes Increase Less Than Forecast
Constellation Energy (CEP), a troubled MLP, announced that it has acquired from a private seller non-operated oil properties in northern Kansas & southern Nebraska for approximately $5.9M. The properties produce approximately 126 barrels of oil equivalent per day from 36 wells. Proved reserves are estimated to be 170K barrels of oil equivalent, of which approximately 81% are classified as proved developed producing. The transaction closed Dec 21 & was funded with cash on hand. “This transaction expands our Mid-Continent asset base while at the same time adding oil to our production mix,” said President Stephen R. Brunner. He continued, “We’ll continue to look for opportunities to acquire assets with similar characteristics in transactions that are accretive to our unitholders.” This is the first sign of life & expansion at CEP in over 2 years. The units have been lumbering along near $3 (its annual distribution 2 years ago used to be $2.25) while unit holders wait for news about a next distribution. This purchase should stimulate the venturesome to buy on the hopes of a recovery next year. The units are up 8¢ to $2.95 on the news which was not well publicized.
Constellation Energy Partners Acquires
Constellation Energy 2 years
Not much to say with many traders off on holiday enjoying profits made this year. The story about CEP buying properties is of interest because it has been left behind during the huge MLP rally in the last 2 years.
Dow Jones Industrials --- 2 weeks
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