“What does the credit & rates environment say?”

Frequently asked

What does an inverted yield curve mean for stocks?

The yield curve signal in TickerStance compares the 10-year Treasury yield to the 2-year Treasury yield. An inversion — where the 2-year yields more than the 10-year — has historically preceded recessions by 6–18 months, tightening financial conditions and compressing bank margins. A steepening curve is constructive; persistent inversion weighs the Macro subscore down and, when combined with wide credit spreads, pulls the stress multiplier toward Stance near zero.

How does VIX feed the Macro score?

The Macro subscore incorporates two VIX-based signals: the volatility regime, which maps the absolute VIX level into calm, normal, stressed, and panic bands, and the normalized 5-day VIX change. Those signals help determine the Macro subscore alongside rates and credit. The headline stress multiplier is not triggered by VIX alone: it scales Stance toward zero only when the combined Macro subscore falls below 30, so broad macro stress cannot be averaged away by healthy trend or breadth readings.