By Tom Bradley

In a ‘Live from the Desk’ posting on the Vertex website (a Vancouver-based fund manager), readers get to experience a typical day on the bond desk from the perspective of new issues. Bond investors are seeing corporation after corporation coming to market with new offerings. All shapes and sizes. A wide range of quality.

The Vertex team makes the point that there is a good side to the bond boom/bubble/whatever. And that is ... it’s great for the stock market! Companies are issuing bonds at low interest rates and extending out their overall term-to-maturity. Lower interest payments flow through to shareholders in the form of higher profits, and perhaps dividends. Extended terms mean companies have more certainty around their financing, which allows them to do more capital spending and hire more workers. More certainty also lets investors relax a bit and value stocks more positively.

Yes, I’m concerned about what happens when interest rates rise, but in the meantime, today’s low rates and liquid markets are fueling future gains ... in the stock market.