Trade wars. Tariffs. Trump. One might think that the "Ts" are solely responsible for financial market volatility.
In truth, a wider variety of cross currents are at work. Some have been bubbling up for a number of years.
Consider the debt profiles of investment grade corporations. Cash on the books relative to debt has deteriorated markedly, while gross leverage (debt to earnings) is sitting near an all-time peak.
The trend for interest coverage is equally concerning. In 2015, roughly 8.3% of corporate income went toward paying interest on debts. Today? 10.2%. That means investment grade