CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers providing real estate and infrastructure investment solutions to over 500 clients worldwide.
CBRE Global Investors is the investment management division of CBRE Group, Inc. the world’s premier commercial real estate services and investment firm. The company’s shares trade on the New York Stock Exchange under the symbol “CBRE.”
July 16, 2017
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The MLP Index finished the week decisively above 300, up 9.9% from its recent (6/21) low, after a 1.9% week that included a furious late Friday ramp. Oil prices rose each day of the week, including 4 straight 1%+ days to finish the week. MLPs resisted rallying for most of the week, but eventually relented.
Just when sentiment was at its worst and catalysts seemed so far away, MLPs string together 3 straight positive weeks, beating the S&P 500 in each one. But this week it took an optimal environment, including: big positive moves in commodity prices, no equity offerings and falling interest rates.
Sub-optimal conditions are likely to return, and MLPs will need some sector-specific and stock-specific reasons to keep the momentum. As such, all eyes will turn to MLP earnings season in a few weeks, even if expectations are fairly low for 2Q results. More important than results are the current conditions and insights in to 3Q results.
Reiteration of 2017 guidance and indications of in-flight 3Q volumes on conference calls may satiate the market, and “prime” the pump until 3Q results can confirm guidance from most MLPs calling for volume strength in 2H 2017…. But by then, the focus will have shifted to 2018 outlook, which will depend on oil prices… such a vicious cycle.
Winners & Losers
Beta worked this week. CCLP and APLP, among the biggest losers last week, were among the biggest winners this week. Propane MLPs were the worst performers. Big YTD winners NBLX and WNRL were likely sources of funds.
YTD Leaderboard
CPLP continues to climb the leaderboard, and sits atop the list of MLPs that still exist (PTXP was acquired). NBLX and WNRL declined slightly, losing ground as others gain steam.
The bottom 5 from last week all traded up, with the exception of TOO, which took over the bottom spot.
General Partners & Midstream Corporations
GPs and Corps outperformed the MLP Index this week. Not a single one was negative. SEMG and AROC went from worst to first, tracking oil prices higher. TRGP bounced on commodity price strength and their non-deal roadshow this week. TEGP had some resolution on the Ultra settlement.
News of the (MLP) World
After wading through all the press releases announcing conference call schedules for 2Q results (and re-schedules for EPD, stay tuned there), there was actually a surprising amount of news flow for a sleepy week in July. Nothing earth shattering, but lots of small things on the periphery of the sector.
Capital Markets
Growth Projects / M&A
Other
Distribution Announcements