On 19 December 2018, 3-month USD Libor exceeded the yield on 10-year US Treasuries for the first time since the financial crisis. For many investors, this has set the alarm bells ringing. Why? Because, in the past, this development has usually heralded a recession in the foreseeable future. Having discussed the current state of the economy in the leading regions ("Is a recession imminent?"), we now analyse how the equity market will be affected.