The credit market will be pivotal during the current crisis. In 2008, we had a problem in the credit market (Subprime mortgages), which made financial institutions move into credit tightening mode. Soon, that start cascading into the real economy. The current environment inverts that relation. The problems start with the real economy being hit hard by the draconian measures to contain the spread of the virus. That’s increasing the credit risk of several companies that are closing doors during the lockdown.
Source: Seeking Alpha
As you can see in the graph above, the iShares iBoxx