An under-the-radar signal is providing crucial hints about the next stock-market crash — and trade-war turmoil could soon have it flashing red

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Dennis DeBusschere of Evercore ISI breaks down the key indicators he's watching as Wall Street debates the next stock-market crash.

And that's just this week's preferred market driver. If the trade war dies down, it's possible that uncertainty over the's next monetary-policy decision will take the reins and start dictating price action, like it has for much of the past 18 months.

They're significant because they indicate how investors are worried about the ability of corporate borrowers to service their debt. When spreads are wide, that's a signal of trepidation, while tight spreads show a relative lack of concern. No matter how you look at it, those types of developments are detrimental to the stock prices of those affected. Especially once the holy grail of share gains —"To the extent that a deterioration of the bond market leads to increased concerns about the outlook for equities, the willingness to pay for a dollar of earnings could move lower," DeBusschere wrote in a recent client note.

 

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