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𓅞 Dyehuthy 𓁟 Reader FOUNDER

Reader FOUNDER

1. 🧵 I'm going to make a short thread explaining something fundamental about the S&P 500.

Many people believe that interest rates, the real economy (GDP growth YoY, ISM PMI, etc.), and the stock market (S&P 500, benchmark) are completely different and separate from one another.

Well, as one great investor once said: "Trying to understand equity market cycles without understanding the bond market is like trying to eat soup with a fork"

The bond market is the "base layer" (government bonds, corporate bonds, etc. The debt market!).

And as Ray Dalio says: "We have cycles because we have debt."

LINK: Post Related, watch it! 👀

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Jun 04, 2026 · 09:49 PM · 120 views · Commons

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Luwyn

@luwyn · Jun 05, 2026 · 07:56 AM

If the 10Y note goes above 5%, I am getting out of equities to the long side with speed. As it gets closer to 4.75-5%, I will begin to close my long positions. I will start to look for short positions. As in all things, context matters. However, if all things remain the same and the 10Y goes up to the critical levels, I am looking to get rid of my positive deltas across the board.

MOVE is another index to be aware and track. MOVE index and not MOVE stock. Move index is the vol of bonds. If MOVE moves to the upside with acceleration, get ready.

𓅞 Dyehuthy 𓁟 Reader FOUNDER

@dyehuthy · Jun 04, 2026 · 09:56 PM

Reader FOUNDER

2. 🧵 They are different layers of the same system: the bond market and the equity market.

Both are part of the business cycle.

One of the clearest examples is hidden in the S&P 500 futures curve: contango and backwardation (the same applies to VIX futures, "the market fear index").

Higher interest rates
→ Higher cost of carry
→ Larger futures premium
→ Steeper contango

The bond market is not separate from the stock market. They are deeply interconnected.

Debt drives interest rates, interest rates influence economic activity, and economic activity ultimately drives corporate earnings and stock prices.

END!