Dow advanced 48, advancers over decliners almost 5-1 & NAZ added 33. The MLP index exploded 21 to the 519s on Kinder Morgan news (see below) & the REIT index went up 2+ to the 305s. Junk bond funds gained & Treasuries saw selling. Oil climbed higher & gold was flattish.
AMJ (Alerian MLP Index tracking fund)
Greece’s hopes of a 2014 exit from its deepest recession in a half-century may hit a stumbling block after Russia banned EU food imports in retaliation for sanctions stemming from the insurgency in Ukraine. “The estimated total cost of Russian counter-sanctions for the Greek economy may look tolerable, but the impact could be quite damaging for industries such as tourism & agriculture amid the fragility of a slowly recovering economy,” said the director-general of the Hellenic Foundation for European & Foreign Policy. “It also raises questions about energy security in the coming autumn and winter.” Russia is Greece’s biggest trading partner. The value of total trade between the 2 reached €9.3B ($12.5B) in 2013, surpassing trade flows between Greece & fellow EU-member Germany. The recent depreciation of the ruble amid the sanctions & the situation in Ukraine may mean that Greece will see 200K fewer Russian tourists this year than originally expected. That could deal a potential €300B blow to Greece’s biggest industry. Tourism contributes more than 16% to Greek GDP & Russia has been the fastest growing source market for visitors to Greece. Tourism revenues from Russia increased 42% last year to ¢1.34B, according to the Bank of Greece. The European Commission forecasts the Greek economy will grow 0.6% this year, its first annual expansion since 2007, & 2.9% in 2015. Europe’s most indebted nation saw its economic output shrink at the slowest pace in 4 years in Q1 when it declined 0.9%, a 23rd straight contraction.
Russian Sanctions Dim Greek Hopes for Exit From Recession
Germany probably underperformed Spain in Q2 for the first time in more than 5 years as the euro-area recovery almost ground to a halt. After leading the currency bloc out of its longest recession last year, Europe’s largest economy probably shrank in Q2. The downturn in the region’s powerhouse highlights the fragility of a revival that ECB pres Mario Draghi has described as modest & uneven. The 18-nation euro area is struggling to boost growth & inflation amid unprecedented ECB stimulus, with Draghi citing inadequate structural reforms as a key reason. While the German data is distorted by mild winter weather that front-loaded output earlier in the year, Bundesbank pres Jens Weidmann has warned the country must also adjust or risk losing its role as a growth engine. German GDP probably shrank 0.1% in Q2, the first contraction since 2012. Other economies of the euro area, along with France, probably grew 0.1%. Spain posted an expansion of 0.6%, the National Statistics Institute said last month. Italian GDP fell 0.2%, after a 0.1% decline in Q1, taking the country into its 3rd recession since 2008.
Europe’s Growth Engine Stutters as Spain Beats Germany
Richard Kinder is consolidating his pipeline empire to strengthen it for growth as the US shale drilling boom opens up $1.5T in potential purchases & expansion projects. Kinder Morgan Inc. plans to acquire all of Kinder Morgan Energy Partners (KMP), Kinder Morgan Management (KMR) & El Paso Pipeline Partners (EPB) in a series of transactions valued at $44B. The move by Kinder, who controls the entities thru his 24% stake in the parent company, runs counter to the industry trend of spinning off pipelines & oil terminals into tax-advantaged partnerships that funnel cash to investors. By simplifying his empire’s corp structure, Kinder will lower borrowing costs & unify the company under a single stock that he can use as currency to buy competitors. The consolidation will make it easier & more profitable for Kinder “to pursue expansion and acquisitions in a target-rich environment,” the company said. There are concerns that KMI may have trouble being able to make deals that immediately add to earnings. The move signals a new round of dealmaking for the pipeline industry, which has seen growth rocket in the past 5 years as the shale boom has spread across North America, creating demand for more pipes in new locations to ship oil & gas to markets. The number of partnerships has multiplied rapidly because of demand from investors for cash payouts that beat debt yields. KMI shot up 3.13, KMP (the relatively old line pipeline company) jumped 11.72 (15%), KMR rose 16.42 (21%) & EPB gained 6.33 (19%). If you would like to learn more about KMI, click on this link:
club.ino.com/trend/analysis/stock/KMI?a_aid=CD3289&a_bid=6ae5b6f7
Billionaire Kinder Streamlines Empire to Target Rivals
I have been a long time fan of MLPs & the Alerian MLP index had its greatest rise on the announcement from KMI. That stimulated buying for all MLPs. In the meantime, the Ukraine mess is calming a little, Gaza is tough to figure out & northern Iraq is going from bad to worse. Earnings from retailers are coming this week with Wal-Mart (WMT) on Thurs. Those reports should be the big drivers, but negative news form numerous intl messes can trump anything. In addition, the euro recovery is stumbling. Dow is below its record because all is not well.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLU14.NYM | ...Crude Oil Sep 14 | ...97.73 |  ...0.08 | (0.1%) |
| GCQ14.CMX | ...Gold Aug 14 | ....1,306.90 | ...2.00 | (0.2%) |
Greece’s hopes of a 2014 exit from its deepest recession in a half-century may hit a stumbling block after Russia banned EU food imports in retaliation for sanctions stemming from the insurgency in Ukraine. “The estimated total cost of Russian counter-sanctions for the Greek economy may look tolerable, but the impact could be quite damaging for industries such as tourism & agriculture amid the fragility of a slowly recovering economy,” said the director-general of the Hellenic Foundation for European & Foreign Policy. “It also raises questions about energy security in the coming autumn and winter.” Russia is Greece’s biggest trading partner. The value of total trade between the 2 reached €9.3B ($12.5B) in 2013, surpassing trade flows between Greece & fellow EU-member Germany. The recent depreciation of the ruble amid the sanctions & the situation in Ukraine may mean that Greece will see 200K fewer Russian tourists this year than originally expected. That could deal a potential €300B blow to Greece’s biggest industry. Tourism contributes more than 16% to Greek GDP & Russia has been the fastest growing source market for visitors to Greece. Tourism revenues from Russia increased 42% last year to ¢1.34B, according to the Bank of Greece. The European Commission forecasts the Greek economy will grow 0.6% this year, its first annual expansion since 2007, & 2.9% in 2015. Europe’s most indebted nation saw its economic output shrink at the slowest pace in 4 years in Q1 when it declined 0.9%, a 23rd straight contraction.
Russian Sanctions Dim Greek Hopes for Exit From Recession
Germany probably underperformed Spain in Q2 for the first time in more than 5 years as the euro-area recovery almost ground to a halt. After leading the currency bloc out of its longest recession last year, Europe’s largest economy probably shrank in Q2. The downturn in the region’s powerhouse highlights the fragility of a revival that ECB pres Mario Draghi has described as modest & uneven. The 18-nation euro area is struggling to boost growth & inflation amid unprecedented ECB stimulus, with Draghi citing inadequate structural reforms as a key reason. While the German data is distorted by mild winter weather that front-loaded output earlier in the year, Bundesbank pres Jens Weidmann has warned the country must also adjust or risk losing its role as a growth engine. German GDP probably shrank 0.1% in Q2, the first contraction since 2012. Other economies of the euro area, along with France, probably grew 0.1%. Spain posted an expansion of 0.6%, the National Statistics Institute said last month. Italian GDP fell 0.2%, after a 0.1% decline in Q1, taking the country into its 3rd recession since 2008.
Europe’s Growth Engine Stutters as Spain Beats Germany
Richard Kinder is consolidating his pipeline empire to strengthen it for growth as the US shale drilling boom opens up $1.5T in potential purchases & expansion projects. Kinder Morgan Inc. plans to acquire all of Kinder Morgan Energy Partners (KMP), Kinder Morgan Management (KMR) & El Paso Pipeline Partners (EPB) in a series of transactions valued at $44B. The move by Kinder, who controls the entities thru his 24% stake in the parent company, runs counter to the industry trend of spinning off pipelines & oil terminals into tax-advantaged partnerships that funnel cash to investors. By simplifying his empire’s corp structure, Kinder will lower borrowing costs & unify the company under a single stock that he can use as currency to buy competitors. The consolidation will make it easier & more profitable for Kinder “to pursue expansion and acquisitions in a target-rich environment,” the company said. There are concerns that KMI may have trouble being able to make deals that immediately add to earnings. The move signals a new round of dealmaking for the pipeline industry, which has seen growth rocket in the past 5 years as the shale boom has spread across North America, creating demand for more pipes in new locations to ship oil & gas to markets. The number of partnerships has multiplied rapidly because of demand from investors for cash payouts that beat debt yields. KMI shot up 3.13, KMP (the relatively old line pipeline company) jumped 11.72 (15%), KMR rose 16.42 (21%) & EPB gained 6.33 (19%). If you would like to learn more about KMI, click on this link:
club.ino.com/trend/analysis/stock/KMI?a_aid=CD3289&a_bid=6ae5b6f7
Billionaire Kinder Streamlines Empire to Target Rivals
Kinder Morgan, Inc. (KMI)
I have been a long time fan of MLPs & the Alerian MLP index had its greatest rise on the announcement from KMI. That stimulated buying for all MLPs. In the meantime, the Ukraine mess is calming a little, Gaza is tough to figure out & northern Iraq is going from bad to worse. Earnings from retailers are coming this week with Wal-Mart (WMT) on Thurs. Those reports should be the big drivers, but negative news form numerous intl messes can trump anything. In addition, the euro recovery is stumbling. Dow is below its record because all is not well.
Dow Jones Industrials
No comments:
Post a Comment