Credit cycle similar to the equity cycle - Declining fundamentals, valuations, and technicals

The credit cycle will often follow the equity cycle. Both are in bear markets. There can be a classic analysis of determining the positioning within the cycle. Robeco, in its credit outlook shows the current credit path with a weighting on fundamentals, valuation, and technicals. They argue that bear markets and market bottoms are dominated by factors other than fundamentals and valuation. We do not agree. 

The widening of spreads is driven by forward-looking fundamentals and valuation not current numbers. Fundamentals are declining based on the expected slowdown of cash flows associated with a growth slowdown and inflation. Valuations are deteriorating based on rising rates and the potential impact of QT which will create a crowding-out effects. Inflation is pushing core fixed income investors to sell duration. 

Sentiment and technicals reinforce the core problems with fundamentals and valuation. Liquidity is a growing problem because there are fewer buyers for corporate paper and dealers do not want to hold these risks.