S&P 500 FINANCIALS INDEX
| Value | 228.70 | |
| Change | 1.94 (0.9%) |
The MLP index was up 1 to the the high 369s, helped by the Kinder Morgan IPO (see below). The REIT index gained a fraction, good enough to set another 2½ year high. This week it has been crawling higher, slow but consistent. Junk bond funds were slightly higher. Treasuries rose, paring a weekly loss, as the Federal Reserve prepared to purchase more US securities as part of its $600B debt buying plan to bolster the economy. The yield on the 10 year Treasury bond sank 9 basis points to 3.62%, still above the 3½% plateau it had been on for a few months.
Treasury yields:
| U.S. 3-month | 0.11% | |
| U.S. 2-year | 0.79% | |
| U.S. 10-year | 3.62% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Crude oil fell after Egyptian President Mubarak defied calls for his resignation, sending equities lower & bolstering the dollar. Gold trading was little affected. Once again, the flight to safety concept is not in playing out for gold.
| CLH11.NYM | ...Crude Oil Mar 11 | ...86.42 | ... 0.33 | (0.4%) |
| GCG11.CMX | ...Gold Feb 11 | ......1,363.80 | ... 1.90 | (0.1%) |
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Confidence for US consumers increased in Feb to the highest level in 8 months. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for the month climbed to 75.1 from 74.2 in Jan. Increasing consumer optimistic could help drive economic expansion, supporting Federal Reserve Chairman Bernanke’s testimony that “the growth rate of economic activity appears likely to pick up this year.”
Consumer Sentiment in U.S. Increases to Eight-Month High
Photo: Bloomberg
Shares of Kinder Morgan (KMI) traded 6+% above the IPO price, signaling strong investor appetite for the pipeline company assets. Yesterday KMI sold 95½M shares for $30 each to raise $2½B, the largest US energy IPO since 1998. Backed by private-equity investors, KMI upsized its IPO from the original plan to sell 80M shares for $26-29 each. The IPO is seen as a means for the private equity partners to monetize their investment & an opportunity for investors to access its vast network of pipelines spanning the US & stretching 2500 miles into Canada. The stock is up 1.90 presently.
Kinder Morgan Raises $2.9 Billion in Biggest LBO-Backed U.S.IPO
Kinder Morgan Inc --- 1 day
Coca-Cola Enterprises (CCE) Q4 net income climbed 7% on improved results for its namesake drinks & sodas. The company transformed itself last year by selling its North American operations to Coca-Cola (KO), also maintained its 2011 earnings guidance below forecasts by analysts. It's also on track to buy back $1B treasury stock in the next 12 months. EPS for Q4 was $97M (28¢ per share), above $91M in 2009, & revenue rose 12% to $1.79B. CCE reported better sales of drinks including Coca-Cola & Coca-Cola Zero as well as Sprite & Dr. Pepper. The expanded distribution of Capri Sun & addition of Ocean Spray also helped its performance. Full-year earnings climbed 8% to $624M, $1.83 per share, from $576M in 2009 as revenue improved to $6.7B from $6.52B. For 2011, CCE still expects EPS of $1.95-2.00 & revenue is anticipated to climb in a mid single-digit range. The stock rose 25¢.
Coca-Cola Enterprises 4Q earnings rise 7 percentAP
Coca-Cola Enterprises --- 3 months
The markets are behaving extremely well with all the confusion coming out of Egypt. A weaker market would have seen substantial selling on stories which can easily become scary. The positive reception of the IPO by Kinder Morgan gave a lift to MLPs. Strong demand continues for energy securities. There is a major disconnect today between buying for Treasuries & an absence of significant buying for gold. Following gold's excellent run over the last 10 years, bulls are resting.
Dow Jones Industrials --- 2 weeks
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