Month: April 2018

After back-to-back 3% weekly gains, MLPs traded up slightly for a third straight week, slightly ahead of the S&P 500.  As discussed last week, MLPs haven’t had 3% gains 3 weeks in a row ever, so this week’s pause is not a surprise, especially with flat broad market and oil prices.

Midstream posted another strong week overall, and MLPs led the way again, up 3.5% for a second straight week.  The midstream rally couldn’t be stopped by another 13 basis points added to the U.S. 10-year interest rate.  The rally even withstood a Tweet from President Trump about how oil prices are too high.  As good as the overall week turned out, the rally was confined to just 2 days, with negative returns in the other 3, just like last week.

Midstream had a solid week, pulled higher by rallies in energy stocks and oil prices.  Tuesday was the best day for MLPs all year (+3%) and Wednesday saw follow through, but the other 3 days were negative.  Midstream performance was torn between improving sentiment for energy stocks and negative price action among income-oriented stocks like utilities and REITs, which under-performed on higher interest rates.

Amidst broader market volatility, midstream held up and outperformed this week.  Relative strength for midstream happened Monday when market was down big and on Thursday when the market rebounded.  I’m going to try not to get too excited about a single week, but an optimist (e.g. myself from 2015) could see a path towards a midstream bottom if growth stocks in the broad market lose their luster and investors begin seeking value in beaten down sectors like energy.