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Kinder Morgan Energy Partners Message Board

  • kmr123999 kmr123999 Jan 9, 2004 11:13 AM Flag

    Employment report - No fed tightening

    This is good for KMP et al.

    From CBS Marketwatch:
    "Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the employment report does reduce the likelihood of the Federal Reserve raising U.S interest rates in May.

    "The labor market data are key to the Fed's action," said Shepherdson. "This report does not help the cause of a May tightening."

    Federal funds futures contracts traded at the Chicago Board of Trade imply an 18 percent chance of a rate hike in May, down from 44 percent earlier.

    For June, the odds slipped to 48 percent from 84 percent. For the Aug. 10 meeting, the odds are 77 percent for the first rate hike compared with the earlier expectation of a second rate hike."

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    • Not looking good.

      • 1 Reply to billyjoerobidoux
      • KMP and KMI have had good run-ups. I am usually an optimist but right now I think KMP is near its high(IMO). No doubt the KMP distribution is going to be raised to close to $3.00 this year and no doubt Kinder hikes KMI's dividend to $2.00 or higher. They are cash machines and should do decent this year but they aren't at the top of my list in terms of strong buys. All, in all, KMP, IMO, has probably gotten to the size where the law of large numbers kicks in and it becomes very hard to grow much more than 10% or 15%, however, betting against Kinder(i.e. going short) is probably not a smart thing. I don't think anyone knows right now how accretive the Yates field purchase will be, with Kinder's aggressive hedging and high oil prices right now, I certainly think it will be a very substantial boost...but trading in the low 5% is certainly new territory for MLP's.