“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 (the absolute VIX level mapped into calm, normal, stressed, and panic bands) and the 5-day VIX change (normalized so falling volatility is constructive and rising volatility signals returning stress). When the VIX spikes above 30, the stress multiplier in the Stance calculation scales the overall reading toward zero, ensuring that a volatility shock is not averaged away by healthy trend or breadth readings.