Investment Grade Corporate Bond ETF Breaks Down

Investment grade corporate bonds have generally moved alongside the stock market throughout the bull market.  In recent days, however, investment grade corporates have moved lower even as stocks have risen.  Below is a chart of the iShares iBoxx Investment Grade Corporate Bond Fund ETF (LQD) since the March lows.  As shown, the ETF had been in a tight uptrend for months until just last week when it broke below its 50-day moving average.  With the uptrend now broken, it will be interesting to see what, if any, impact this has on equity markets.

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Comments

[phillips49:]

I don't think I would make to much of this. LQD is about where it was in 2007 when the market was much higher. It sold off during the great liquidation. It has now recovered it's basic value and sells just for the dividend. The great liquidation provided a great opportunity to buy this ETF at discount. That was a one time good deal.

Oct 12 08:25 PM

[oldman:]

How about muny funds this week, money coming out to fuel the market higher?

Oct 14 04:52 PM