“I have been trading for decades and I am still standing. I have seen a lot of traders come and go. They have a system or a program that works in some specific environments and fails in others. In contrast, my strategy is dynamic and ever evolving. I constantly learn and change.” – Thomas Busby

1. Kinder Morgan (KMI) Fears Crushing Entire MLP Sector — the Kinder Morgan (NYSE:KMI) contagion triggered a selloff throughout the entire MLP space late last week as fears of a wave of yield cuts have spread throughout the market. Moody’s changed its outlook on PAA to Negative from Stable while affirming the company’s Baa2 rating, saying it is concerned about PAA’s 5.4x debt-to-EBITDA ratio and sub-1x distribution coverage ratio. The continuing slide in crude oil prices obviously is weighing on MLP prices, but year-end selling also may be playing a major role – not just tax-loss harvesting, but the “year-end liquidation of a losing trade,” says Michael Shaoul of Marketfield Asset Management. Furthermore, Kinder Morgan has slashed its 2016 quarterly dividend to $0.125/share from the current $0.51, marking the company’s first-ever dividend cut. The company said the move will enable it to use a significant portion of its cash flow to fund the equity portion of its expansion capital requirements, eliminate any need to access the equity market for the foreseeable future, and maintain a solid investment grade credit rating.
2. Carl Icahn Ups Cheniere Stake Again — activist investor Carl Icahn has raised his stake in struggling Cheniere Energy (NYSEMKT:LNG), marking the eighth time he upped his holdings in the company since taking an initial 8.2% position in August. According to a Dow Jones report, the billionaire boosted his stake to 13.8% from 12.7% previously.
3. Apple Suspends TV Service Plans as Big Media Resists — Bloomberg reported Apple (NASDAQ:AAPL) has suspended plans to offer an online TV service, and will focus for now on helping media companies directly sell content via the App Store. The news service adds that Apple (NASDAQ:AAPL) isn’t completely giving up on providing a live TV service, but notes its original plan to sell 14 or so channels for $30-$40/month has “run into resistance from media companies that want more money for their programming.” Media executives have said they expect Apple and other new entrants to pay more per channel than pay-TV incumbents.
4. Chipotle Store (CMG) in Seattle Closed Due to Health Violations — Health officials in Seattle closed down a Chipotle (NYSE:CMG) store due to “repeated” food safety violations. The store has recently re-opened after being shut down following the E. coli outbreak which impacted some Chipotle stores in the Pacific Northwest. Separately, the toll of students at Boston College who became sick after eating at a Chipotle store has risen to 141.
5. Baker Hughes Deal Will Likely Close in 2016 — Halliburton’s proposed $35B acquisition of rival Baker Hughes (NYSE:BHI) will likely close in 2016 instead of this year as talks with U.S. regulators continue, Halliburton (NYSE:HAL) CFO Christian Garcia told a Wells Fargo Energy Symposium. Both companies have already agreed to divest $5.2B in overlapping businesses to quell concerns that the merger, which would create the second-largest oilfield services company, would lead to higher prices and less innovation.

The week ahead — Economic data from Econoday.com:

FOMC Meeting Week

“Volatility is greatest at turning points, diminishing as a new trend becomes established.” – George Soros