Above, nosotros tin encounter a five-year moving painting of Vanguard's intermediate-term investment shape municipal bonds (VWITX; scope chart) together with intermediate-term investment shape corporate bonds (VFICX; bottom chart).
Both plunged precipitously inward the credit crisis at in 1 lawsuit surrounding the Lehman failure. Both every mo good made higher lows when stocks hitting their bottom inward March, 2009, suggesting that or then stair out of stabilization had already occurred.
The importance of such investment shape bonds is that their pricing reflects an jurist of likelihood of default, every mo good every mo outlooks for futurity involvement rates.
What we've seen of belatedly are continued highs inward these bond markets. Investors are neither pricing inward high odds of default, nor are they anticipating higher involvement rates to come. This has been an of import psychological backdrop to the stock marketplace rally.
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