Dividends Bid

So much for your promises
They died the day you let me go
Caught up in a web of lies
But it was just too late to know
--Johnny Hates Jazz

Rising interest rates should put pressure on dividend paying stocks, as market participants swap out of riskier equities for fixed income streams perceived as more secure. So far, however, it hasn't been working out this way from where I sit. In fact, quite the opposite.

Most dividend-paying stocks that I follow have been catching bids and are at/near their highs.

One possible explanation is that higher rates are causing many fund managers to sell bonds in order to manage risk (bond prices decline as rates rise). To recoup some of the lost cash stream, perhaps some managers are plowing the proceeds into dividend-paying stocks.

Far fetched? Maybe, as one would think higher coupons of new bond issues would entice the opposite trade: sell stocks in favor of higher yielding bonds. 

But am have trouble coming up with plausible rival theories that explains the current bid underneath dividend payers given the current field position and macro backdrop.