Tag: ARCHIVE

It was a pretty great week for Midstream (AMEI +1.9%), but not so much for MLPs (-0.2%).  The busiest week for 1Q earnings started exciting with a big merger of MLP sponsors and very strong 1Q results from big MLPs EPD and MPLX.  As the week continued, however, MLP investor sentiment was dealt another blow with a surprise distribution cut from TCP and weak results from BPL.

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.

A strong Thursday saved the week for Midstream and MLPs, which both finished marginally positive, but trailed the broad stock market and utilities.  Oil prices were down slightly but weren’t much of a factor.  Midstream sold off Tuesday in what felt like end of quarter window un-dressing after a double digit negative quarter.

Another rough week in Midstream, the worst in nearly 2 months. Midstream and MLPs overall did outperform the S&P 500, though, which had its worst week 2+ years.  MLPs fared the worst, down 5.5%, U.S. midstream corps were down 4.2%, matching the AMEI index (proxy for midstream universe), and Canadian Midstream outperformed both.

Midstream had another rough week.  The MLP Index has declined 5 out of the last 7 weeks and is off 15.2% from its peak in January.  Just when it seemed sentiment around MLPs couldn’t get worse with uncertain pending structural resolutions, poor fund flows and distribution cuts, FERC piled on with a ruling specifically targeting an MLP tax loophole.

MLPs and Midstream were positive this week, but they waited until Friday’s broad market and oil price rally to trade up, and therefore underperformed the S&P 500, which traded up 4 of 5 days and rallied 3.5% this week.  S&P 500’s trailing 12 month and YTD lead on all things energy and midstream continues to grow.  Commodity prices firmed up Friday, salvaging an otherwise uneventful week.