The bond market translator that tells you what stocks will do next

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| 2s-10s slope | | | |

| Real rates (5Y) | | | |

| IG spreads | | | |

| HY spreads | | | |

| HY-IG differential | | | |

POSITIONING RECOMMENDATIONS:

Based on ALL signals together, what's the macro message?

1. 1. Equity allocation: Increase, maintain, or decrease?
2. 2. Sector tilt: Which sectors are bonds telling you to overweight/underweight?
3. 3. Duration of equity holdings: Should you prefer longer-duration growth or shorter-duration value?
4. 4. Risk management: Any hedges warranted by the bond market signal?

DISAGREEMENT ALERT: Where are bonds and stocks saying different things? These divergences are the highest-conviction signals.

Give me the one-line summary: "The bond market is saying ___ and I should ___."

## The system in practice

**Weekly (Monday):** Run all 3 steps with fresh data. Takes 4 minutes.
**Daily:** Quick glance at the 2s-10s and HY spread. If they move more than 10bps, re-run the full analysis.
**Key principle:** When bonds and stocks agree → trend is strong. When they disagree → bonds are usually right.

**Data source:** Treasury yields from treasury.gov or FRED. Credit spreads from FRED (BAMLH0A0HYM2, BAMLC0A0CM).

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