Global Rates Stress Test
The thesis
Sustained higher-for-longer global rates are triggering a bond-to-equity contagion, weakening fiscal credibility (France, China property) and pressuring duration-sensitive assets, while AI capex remains the lone bullish offset.
How the score is derived
63%
5 of 8 tested indicators currently match this thesis.
The figure is the share of tested indicators whose latest reading matches the thesis. It describes market data already published, and is not a projection of what happens next.
Indicators last read 2026-10-17
Indicators tested against this thesis
Each indicator was selected to test one part of the thesis. The reading is compared with what the thesis implies, and the outcome is recorded either way — indicators that do not match are kept on the page.
10-Year Treasury yield (%)
Reading matches the thesis
- Thesis implies:
- rising
- Latest reading:
- 5.10
- Why this tests the thesis:
- Tests the 'higher-for-longer' rates leg driving the bond selloff narrative.
10-Year Treasury yield (%) rose over ~180d (4.26 → 5.10)
10Y-2Y yield spread (%)
Reading differs from the thesis
- Thesis implies:
- rising
- Latest reading:
- 0.35
- Why this tests the thesis:
- Tests curve normalization/un-inversion consistent with term-premium repricing and bond-to-equity contagion.
10Y-2Y yield spread (%) fell over ~180d (0.55 → 0.35)
High-yield credit spread (%)
Reading matches the thesis
- Thesis implies:
- rising
- Latest reading:
- 3.23
- Why this tests the thesis:
- Tests credit-spread widening as the transmission channel from rates stress to equity risk.
High-yield credit spread (%) rose over ~180d (2.83 → 3.23)
VIX close
Reading differs from the thesis
- Thesis implies:
- rising
- Latest reading:
- 16.46
- Why this tests the thesis:
- Tests volatility regime shift implied by contagion-risk narratives.
VIX close fell over ~180d (17.48 → 16.46)
20+yr US Treasuries (TLT ETF)
Reading matches the thesis
- Thesis implies:
- falling
- Latest reading:
- 80.05
- Why this tests the thesis:
- Direct price test of the long-duration bond selloff thesis.
20+yr US Treasuries (TLT ETF) below its long SMA (80.05 vs 84.95)
S&P 500 (SPY ETF)
Reading differs from the thesis
- Thesis implies:
- falling
- Latest reading:
- 763.25
- Why this tests the thesis:
- Tests equity-side contagion from bond market stress.
S&P 500 (SPY ETF) above its long SMA (763.25 vs 725.01)
US REITs (VNQ ETF)
Reading matches the thesis
- Thesis implies:
- falling
- Latest reading:
- 91.76
- Why this tests the thesis:
- Tests rate-sensitive REITs as a casualty of higher-for-longer (counter to bullish Realty Income narrative).
US REITs (VNQ ETF) below its long SMA (91.76 vs 94.44)
Nasdaq-100 (QQQ ETF)
Reading matches the thesis
- Thesis implies:
- rising
- Latest reading:
- 709.80
- Why this tests the thesis:
- Tests whether AI capex narrative decouples tech equities from the broader rates-driven selloff.
Nasdaq-100 (QQQ ETF) above its long SMA (709.80 vs 674.91)
Narratives in this cluster
Each narrative was grouped here because it makes the same underlying claim. Narratives recorded as counter-evidence are kept in the cluster and weighed against it.
- Realty Income Rising Yield OpportunityCounter-evidence
- China Mortgage Subsidy IneffectivenessSame claim
- Insider Threat and Espionage Risk at Central BanksCounter-evidence
- France Fiscal ConsolidationSame claim
- Bond-to-Equity Contagion RiskSame claim
- Global Bond Selloff and Higher-for-Longer RatesSame claim
- AI Investment JustificationCounter-evidence
Clusters tested by overlapping indicators
These clusters were selected because their indicator plans overlap with this one: the same published market series are used to test both theses. The overlap is computed from the plans themselves, not from what the narratives say.
- Bubble Break Risk via Institutional HerdingShared indicators: S&P 500 (SPY ETF), 20+yr US Treasuries (TLT ETF), High-yield credit spread (%), 10Y-2Y yield spread (%), VIX close
- Disinflation + AI Earnings Drive Equity BreakoutShared indicators: Nasdaq-100 (QQQ ETF), S&P 500 (SPY ETF), 10-Year Treasury yield (%), 10Y-2Y yield spread (%), VIX close
- US Fiscal Dominance Pressures Long-End YieldsShared indicators: 20+yr US Treasuries (TLT ETF), High-yield credit spread (%), 10-Year Treasury yield (%), 10Y-2Y yield spread (%)
- Recession-Driven Wealth Accumulation via Real AssetsShared indicators: S&P 500 (SPY ETF), US REITs (VNQ ETF), 10Y-2Y yield spread (%)
- Mindset-Driven Wealth AccumulationShared indicators: Nasdaq-100 (QQQ ETF), S&P 500 (SPY ETF), 20+yr US Treasuries (TLT ETF), High-yield credit spread (%), VIX close
10 further clusters overlap with this one.
How a cluster is built
Narratives are collected daily from tracked public sources, compared by meaning, and grouped when they make the same underlying claim. A single thesis is distilled from each group, and a plan of published market indicators is selected to test it. Deterministic code then fetches each indicator and records whether the reading matches what the thesis implies.
This page describes what the model grouped and measured. It is information about market data, not a recommendation, and not personal advice.