Using stochastics (Merton) to qualify the last 4 weeks in credit

It has been an extraordinary regime shift signaling equity rally will continue.

Merton Distance to Default, or “D2D”, which considers credit as a stochastic option problem. D2D is the time in years to ruin given the asset value (debt plus equity) volatility. One way to consider time to ruin is if the company has nothing but bad luck from here on, the time it would take to reach default given the current riskiness, or volatility of the company.
It is rough shod to use this on an index, but it still provides a good idea of the credit worthiness and dynamics of late.