Equity markets crack on average six months after credit markets do.
Credit spreads widened ahead of of the crashes in 87 and 2000.
However equity and credit markets are more conected today.
Why
One of the biggest arbitrage trades in financial markets history is the massive use of cheap debt to buy cheaper equity.
The arbitrage gap still exists so the bull market is still intact.
At the last peak the bond yield was nearly 9% and the earnings yield was just 3%.
St present the earnings yield for both has converged to about 6% on both.
BBB bonds yields might have to rise 2% points
At the earnings yield of 4 that would involve the PE rising from 17 to 25 which is a very bullish sceneraio
However liquidity is another factor
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