Corporate Bond Spreads Improving

Canadian Corporate bond rates are coming down, prices are going up which could signal better times for the stock market in weeks to come.  With yields in excess of 8% on longer term maturities of investment grade companies, investors are finding them hard to ignore. Yields on these bonds were less than 5% a little over a year ago.

Preferred shares which were yielding in the 8% – 9.25% just a month ago have gone up in price more than 25% bringing yields into the low 7% range.

Another sign of improvement is the lower rates on long-term mortgages as can be seen by clicking the link to the following article indicating that mortgage refinances in the US are going through the roof which will free up some cash for the currently strapped consumer.

http://www.reuters.com/article/ousivMolt/idUSTRE50D2ZQ20090114?pageNumber=1&virtualBrandChannel=0

What are your thoughts on this? Will these lower rates bring investors back into the stock market or do we have a long wait ahead of us?

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