Personal spending increased 0.5% in the month of November, which was a decent number that sent bonds lower. Mortgage-backed securities followed.
More expensive propane costs could cause residential customers to buy less, hurting certain MLP names.
Regency management stated that the acquisition will be immediately accretive to 2014 distributable cash flow per common unit.
The Refinance Index fell 13% (from 1,656 to 1,444), as rates were up 2 basis points. Refinances have been dropping like a stone.
Last week’s activity in mortgage securities was muted due to the holiday and the fact that origination activity is at 13-year lows.
Higher propane demand from the agricultural sector has helped to buoy propane prices.
Regency recently announced that it would purchase Eagle Rock’s midstream operations for total consideration of ~$1.3 billion.
Bonds sold off thin volume during a holiday-shortened week. Bond yields drifted up throughout the week, finally trading above 3% on Friday.
Initial jobless claims decreased to 338,000 for the week ended December 20. Unemployment is a profound driver of economic growth.
On December 23, Regency Energy announced two major acquisitions. It will purchase Eagle Rock Energy Partners (EROC) and Hoover Energy (private).
Propane exports have increased significantly through 2013, and have spiked recently. Increased propane exports are a positive for domestic propane prices.
The MBA Applications Index fell 6% after falling 5% the week before. Mortgage applications have dropped off a cliff ever since rates began increasing last spring.
The average 30-year fixed-rate mortgage fell 1 basis point, from 4.49% to 4.48%, while the ten-year bond rose 2 basis points.
2013 has been a year of dramatic equity outperformance against other asset classes. High-yield debt has been very volatile.
Propane distributors benefit from cold weather, which spurs increased propane demand for home heating.
With so much upward momentum in real rates and the Fed itching to taper, it might make sense to be short duration.
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