As Yields Move Lower, MLPs May Offer an Attractive Return

By Jim Dondero | April 02, 2015

  • The US Dollar was again slightly lower on the week, which again helped crude oil bounce. While the greenback is likely in a multi-year bull market, we also believe that it could mark time over the next few months. If so, it could help crude put in a meaningful bottom.
  • We also continue to believe that MLPs could offer a very attractive alternative for investors, given the potential for a bottom in crude along with the recent decline in yields. Not all MLPs are equal, and we have identified seven names worthy of review in our most recent white paper.
  • After starting the week strongly stocks struggled to hold into the long weekend. We believe the recent sell-off is likely due to concerns over the (strong) dollar’s negative impact on earnings and/or the recent slow-down in corporate buybacks. We are closely watching 40-week averages as indicators of whether this is another garden variety pullback, or something more serious.
  • Finally, the action in China last week was quite encouraging; with the FTSE China 25 Index moving to its highest level in nearly 4 years. That being said it is still well below its 2007 highs, and we believe has good potential for further upside from here.

 

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