With just a few days of trading under our belt in 2107, we propose a few random thoughts about markets and witnessed action:

• Master Limited Partnerships are up as of the close of Friday 2.5% outperforming the SP500 and utilities. This occurred in spite of flat oil prices.  MLPs portfolio manager Hinds Howard quotes an interesting statistics: since 2000 each time MLPs started out the year with a 2% or better return in the first 4 days, the full year return exceeded 25%.  Statistically speaking, this relationship is meaningless since we have way too few data points but it certainly warms our heart…
• Permabull Thomas Lee of Fundstrat turns cautious and assigns a year-end target on the SP500 practically flat from here (2275).  However, he does like a few sectors: computers, resources, American banks and phone carriers.  We find some agreement in specific areas of tech (sensors, networks, analytics and security) and certainly natural resources.  On the banks, the rally has been fast and furious after Trumps’ victory therefore a correction might be in the cards.
• The probabilities of a correction for the overall market are rising as best scenarios get priced in quickly.  Also, markets have a tendency to experience tradeable corrections in February (especially tech) so we would not be surprised to find opportunities in a few weeks.
• On market technicals, Sentimentrader.com quotes some overbought stats such as a higher number of declining securities than advancing ones on the NYSE while the SP500 hits new highs. This is a common sign of exhaustion as the rally narrows its breadth.
• Barron’s published this week-end a positive analysis of KKR, the Private Equity manager, highlighting a few of the same points we made about the space in the past months.