The inverse correlation between the market's level of fear, doubt and uncertainty as proxied by the ratio of the Vix index to the 10-year Treasury yield) remains strong, as the chart above shows.
The list of worries is long: China, commodities, oil prices, energy sector debt, emerging markets (especially Brazil), regulatory burdens, high marginal tax rates, and more recently, healthcare stocks that face the threat of politicians who want to control the prices of certain drugs.
And it is still the case that, despite all these concerns and the rising level of corporate credit spreads, 2-year swap spreads are unusually low. Swap spreads stand out in a field of nerves, because at the current level, they signal that systemic risk is virtually nonexistent, financial market liquidity conditions are very healthy, and the banking sector is strong (as well it should be, with trillions of dollars of excess reserves).
It's worth repeating that every recession in the past 60 years has been preceded by a severe tightening of monetary policy, which can be seen in a strong and rising dollar, high real yields, a flat-to-inverted yield curve, and rising credit spreads. Moreover, the past three recessions have been preceded by high and rising swap spreads (the swap market wasn't very active prior to that). Of all those preconditions, only rising credit spreads can be found today, but as the chart above shows, they are not critically high. Without the confirmation of rising swap spreads, it looks like the problems of the HY debt sector - although serious, especially for the energy and commodity sectors - are not highly contagious.