Morgan Stanley’s Zavolock: Bond Yields Far From Level That Would Hit Stocks

The notable point is the framework shift: rather than treating the yield level itself as the trigger, Zavolock anchors the equity risk call on credit spreads, so the bond selloff is read as a positioning event rather than a growth signal. That matters for anyone holding duration-sensitive equity exposure, since it implies the pain trade stays contained until credit confirms otherwise. Whether European high-yield spreads keep narrowing is the open question — they are doing the work that the 10-year yield alone cannot.