MLPs Fell 2% amid Increasing Uncertainty over Trump Trade
The Alerian MLP Index (AMZ) closed 1.9% lower on May 17, 2017. MLPs, which rose on expectations of lower regulations and increased infrastructure spending after President Trump’s election, fell as uncertainty surrounding the fruition of these expectations increased.
Increasing concerns over Trump’s future, including possible impeachment, resulted in fears about the implementation of Trump’s proposed policies.
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The Alerian MLP ETF (AMLP) fell 1.1% on Wednesday. Kinder Morgan (KMI), Enterprise Products Partners (EPD), and Energy Transfer Equity (ETE) all closed lower for the day. The SPDR S&P 500 ETF (SPY) (SPX-INDEX) fell 1.8% on May 17, 2017. ETE, which had surged 17% on the day of election results, fell nearly 4%.
Interestingly, the energy sector, including MLPs, couldn’t sustain most of the post-election gains in 2017. The sector has generated negative returns in 2017 so far, underperforming broader markets. This underperformance likely indicates that, among other things, the market was already pricing in early signs of difficulties in the implementation of Trump’s proposed reforms.
In the next article, we’ll take a look at MLPs’ performances so far in 2017.