Companies are taking advantage of the record low bond yields, selling $103 billion of debt last month, the busiest July on record, data compiled by Bloomberg show. Bristol-Myers Squibb Co., Schlumberger Ltd. and Morgan Stanley all raised $2 billion each, the latter with its first fixed-rate 30-year debt in a decade.

“There was a lot of fear that the downgrade would result in higher interest rates overall within the U.S. because of the perceived lack of fiscal responsibility,” said Thomas Chow, a money manager at Delaware Investments in Philadelphia with about $170 billion under management, including $130 billion of fixed-income assets. “The reality of it is that this world is based more on relative valuations.”

Eoin Treacy's view As liabilities mount the US government continues to increase its debt burden. Meanwhile, corporations are presented with an excellent opportunity to finesse their already healthy balance sheets. Low absolute yields offer a perfect opportunity to both avail of a record low cost of capital and to roll over expiring debt at extremely favourable levels.

Deteriorating expectations of future global growth have weighed particularly hard on industrial shares. For the most part they have underperformed over the last 18-months. However, this period has also allowed them to rationalise and a number are now exhibiting patterns of demand dominance.

GE (3.25%) is globally diversified with GE Capital accounting for approximately a third of revenue. The share collapsed during the financial crisis not least because it lost access to the short-term funding on which it had relied. Speculation is rising that GE Capital will be split off from the company. This would probably benefit the industrial and energy divisions of the company. The share has been ranging mostly below $20 since early 2010. It has been consolidating in the region of the range highs since late June and a sustained move below $18 would be required to question potential for a successful upward break.

Berkshire Hathaway may rely on its reinsurance for free cashflow but has substantial industrial interests. The share has returned to the three and half year highs and a sustained move below $80 would be required to question potential for a successful breakout.

3M (2.49%) retested the 2010 lows in October and has held a progression of higher reaction lows since. A sustained move below the 200-day Ma, currently near $85.50, would be required to question medium-term scope for additional upside.

Illinois Tool Works (2.59%), Eaton Corp (3.35%), Dover Corp (2.31%), Ingersoll-Rand (1.31%), Parker Hannifin (1.93%), Textron (0.3%) and Flowserve (1.1%) are also in the diversified manufacturing sector. They all found support above the October lows in the last couple of weeks and rallied impressively. Sustained moves below their respective June lows would be required to question potential for additional higher to lateral ranging.

Cooper Industries (1.66%) and Roper Industries (0.5%) both surged to new highs over the last couple of weeks and while somewhat overextended relative to their 200-day MAs, sustained moves below their respective trend means would be required to question medium-term scope for additional upside. Tyco International (1.78%) remains in a relatively consistent medium-term uptrend. It found support in the region of the 200-day MA from early July and a sustained move below the trend mean would be required to question potential for additional upside.