S&P 500 FINANCIALS INDEX
| Value | 223.61 | |
| Change | 0.11 (0.0%) |
The Alerian MLP Index fell 1¼ to 373, from its record high yesterday, while the REIT index was up a fraction in the 232s (near its yearly high). Junk bond funds continued flattish. But Treasuries declined, pushing 30-year bond yields to a 9-month high, as data showed the fastest expansion since 2005 last month in service industries which account for 90% of the US economy. The yield on the 10 year Treasury bond rose 5 basis points to 3.54%.
Treasury yields:
| U.S. 3-month | 0.14% | |
| U.S. 2-year | 0.70% | |
| U.S. 10-year | 3.54% |
Alerian MLP Index --- YTD
Dow Jones REIT Index --- YTD
10-Year Treasury Index --- YTD
Oil fell as the € tumbled the most since Nov against the dollar (down almost 2 pennies) after European Central Bank said inflation risks are “broadly balanced” dimming prospects for a boost in borrowing costs. Mideast uncertainties finally brought out gold buyers.
| CLH11.NYM | ...Crude Oil Mar 11 | ...90.60 | .... 0.26 | (0.3%) |
| GCG11.CMX | ...Gold Feb 11 | .......1,353.70 | ... 22.20 (1.7%) |
$$ Gold Super Cycle $$
US service industries in Jan expanded at the fastest pace in over 5 years, indicating the economic recovery is broadening. The Institute for Supply Management’s index of non-manufacturing businesses rose to 59.4, above the forecast of 57.2, after 57.1 in Dec (readings above 50 signal expansion in a gauge that covers 90% of the economy). Orders were the highest in 7 years, while companies showed more confidence to hire. Federal Reserve Chairman Ben Bernanke said today that the US needs to see faster job growth for a sufficient time before central bankers can be assured the recovery has taken hold. “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” Bernanke said.
U.S. Economy: Service Industries Expand by Most Since 2005
Kinder Morgan Inc, the pipeline company, said its parent company, Kinder Morgan Holdco LLC, plans to raise $2.2B in the biggest IPO by a US energy since Conoco's debut in 1998, when it raised $4.4B. Kinder Morgan, taken private in 2007, will sell 80M shares at $26-29 each & underwriters have the option to buy another 12M. If Kinder Morgan's IPO is priced at the middle of the expected range, the company would have a market cap of $19B, the largest ever for the IPO of a US oil & gas company. All stock will be sold by existing investors including: Goldman Sachs, Highstar Capital, The Carlyle Group & Riverstone Holdings. Kinder Morgan will not receive any proceeds. Kinder Morgan Holdco LLC plans to convert from a Delaware limited liability company to a Delaware corp & its stock will trade on NYSE under the symbol "KMI." Investors are in love with energy companies like MLPs & insiders are taking profits. Kinder Morgan Energy Partners (KMP), its large MLP, was up a penny.
Kinder Morgan Energy Partners
Markets were able to post small gains, generally to new post recession highs. But they are paying more attention to goings on in the Mideast. Nobody knows how that will turn out which has finally given gold prices a boost. High expectations for the economic recovery in the US & rest of the world bring higher bids for stocks. The jobs report tomorrow will provide more clues. Its bigger picture story is that unemployment is plodding along at high levels with no early relief expected. With deaths reported in Egyptian riots, it's hard to predict how the markets will react to tomorrow's news.
Dow Jones Industrials --- YTD
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