US Corporate Bond sales came in at $427 billion during the first quarter, easily beating the prior record of $397 billion set last year. Before the recent sell-off in corporate bonds the yield was at 3.4% for investment-grade, the lowest number since 1986, when the recording started.
Corporations are taking advantage of the low interest rates and borrowing money for expansion, etc. I will give the Fed credit in that by keeping interest rates low it allows for corporations to borrow at low rates, a big plus for stock performance.
The iShares Corporate Bond ETF ($LQD) is up 2% in 2012 and yields 4.24%.
The SPDR High Yield Corporate Bond ETF ($JNK) is up 3% and yields 7.28%.
VERSUS
The iShares 20+ Year Treasury Bond ETF ($TLT) that is down 6% and only yields 3.37%.
Hmmmm Corporations versus governments? I will go with LQD and JNK all day!!
Market expert and TV personality Matt McCall blogs about what is really moving the markets. He will emphasize Exchange-Traded Funds (ETFs) and individual stocks throughout the trading day.
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