S&P 500 FINANCIALS INDEX
| Value | 215.08 |  |
| Change | -0.63 (-0.3%) |
The MLP index was up 1¼ to 361 & wants to finish the year nearer its record in the 366s. The REIT index rose ½ to the 224s, far below its record levels above 300 when most company dividends were higher. Junk bond funds inched up. Buyers returned to Treasuries in a big way in the PM. The yield on the 10 year Treasury bond fell a very large 14 basis points to 3.34%. Given thin trading in the markets, it's difficult to attribute any meaning to this move.
Treasury yields:
| U.S. 3-month | 0.12% | |
| U.S. 2-year | 0.63% | |
| U.S. 10-year | 3.34% |
Alerian MLP Index --- 1 year
Dow Jones REIT Index --- 1 year
10-Year Treasury Yield Index --- 1 year
Oil slipped back, but remains near its 26 month high & bulls expect to see $100 soon. Gold is concluding another outstanding year. It started the year near $1100 & has had a nice run to record levels while the Dow is still almost 20% below its record in Oct 2007.
| CLG11.NYM | ...Crude Oil Feb 11... | 91.13 | .... 0.36 | (0.4%) |
| GCZ10.CMX | ...Gold Dec 10 | .....1,413.10 | ... 7.90 | (0.6%) |
+++ Gold Super Cycle +++
The blizzard that swept through the northeast delayed $1B in retail spending, according to ShopperTrak. But, it says that won't derail a holiday shopping season expected to be the best since 2007. The effect won't be as bad as last year's pre-Christmas snowstorm that similarly paralyzed parts of the East Coast costing retailers an estimated $2B. About $10B in retail sales usually occurs Dec 26-27 & bad weather likely delayed about 10% of that. ShopperTrak's still estimating for a 4% gain over last year in revenue for Nov 1-Dec 31. Retailers are hoping to see much of the spending when shoppers return to stores as streets are cleared & transportation restored. This year's storm cost retailers 11.2% of their foot traffic Sun & 13.9% on Mon. Dec 26 should rank 10th-busiest day of the holiday shopping season. Last year, it was 2nd-busiest behind Black Friday. Stores will report results next week & Dec auto sales are also due.
Constellation Energy Partners (CEP) is an MLP which has been left behind in the enormous MLP rally over the last 2 years. But it's still alive. The borrowing base just reestablished by lenders was $195M. CEP has $26½M available under the line & the company had $18.2M cash on hand in early Dec. In addition CEP acquired, from a private seller, non-operated oil properties in northern Kansas & southern Nebraska for approximately $5.9M. The properties currently produce approximately 126 barrels of oil equivalent per day from 36 wells with proved reserves estimated to be 170K barrels of oil equivalent. 81% is classified as proved developed producing. The transaction closed Dec 21, 2010 & was purchased with cash on hand. Risk takers who are willing to wait for the company to resume distributions might be interested in CEP at less than $3.
Constellation Energy Partners Borrowing Base Set At $195 MillionBusiness Wire
Constellation Energy Partners Acquires Mid-Continent Oil AssetsBusiness Wire
Constellation Energy --- 2 years
Volume was slow again at only 0.5B on the NYSE floor. As a frame of reference, 1B shares is generally considered low. Low yields have driven investors to higher yielding stocks in Dec. But they have not been buying junk funds & have only been buying REITs to a limited degree. MLPs have had a modest advance. Old fashioned stocks have done the best as reflected in the Dow which has risen 5¼%. It's hard to believe, but volume could be even slower tomorrow.
Dow Jones Industrials --- 1 year
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