Preferred Shares are Waking Up

Igor Manukhov - Mar 14, 2024
Preferred shares are finally starting to outperform bonds.
Going through my charts this week, I noticed that preferred shares have finally started to outperform bonds. This shift is evident in the relative strength line, which is firmly trending upward. Specifically, the rising black line indicates that preferred shares are outperforming investment-grade Canadian bonds.
 
It's important to note that the preferred market currently appears to be overbought, which is shown by the red line depicting the current price trend. I would allow for some digestion, but bondholders should consider reallocating some funds into preferred shares, considering their current relative strength.