Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, European/Emerging Markets/US High-Yield Debt Angst, Transport/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.4 +1.8%
• Bloomberg Global Risk On/Risk Off Index 5,042.0 +81.0 points

• Euro/Yen Carry Return Index 147.93 +1.27%

• Emerging Markets Currency Volatility(VXY) 12.4 +2.2%

• CBOE S&P 500 Implied Correlation Index 44.5 +2.4% 

• ISE Sentiment Index 144.0 +35.0 points
  

• Total Put/Call .88 -10.2%

• NYSE Arms .67 -27.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.6 +2.7%
  

• US Energy High-Yield OAS 373.04 -.27%
• Bloomberg TRACE # Distressed Bonds Traded 311.0 +19.0
  

• European Financial Sector CDS Index 100.08 +1.9%

• Italian/German 10Y Yld Spread 202.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 107.53 -.25%
  

• Emerging Market CDS Index 286.68 +3.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.8 unch.
  
• Russia Sovereign Debt Credit Default Swap 4,265.2 +10.6%
  

• 2-Year Swap Spread 35.5 basis points -.5 basis point
  

• TED Spread 40.75 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 basis points unch.
  
• MBS  5/10 Treasury Spread  117.0 +3.0 basis points
  
• iShares CMBS ETF 48.23 -.25%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.66 -.42%
• 3-Month T-Bill Yield 1.24% +1.0 basis point
  

• Yield Curve 26.0 basis points (2s/10s) +2.5 basis points
  

• China Iron Ore Spot 145.5 USD/Metric Tonne +.3%

• Citi US Economic Surprise Index -42.8 +.6 point

• Citi Eurozone Economic Surprise Index 27.4 +10.9 points
  

• Citi Emerging Markets Economic Surprise Index 13.3 -1.3 points

• 10-Year TIPS Spread 2.77 +3.0 basis points
  
• 0.0%(unch.) chance of no change at July 27th FOMC meeting, 0.0%(unch.) chance of no change at September 21st meeting

US Covid-19:

• 233 new infections/100K people(last 7 days total). 14.0%(-1.0 percentage point) of 1/14 peak -27/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -81.4%(+1.5 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -104 open in Japan 
• China A50 Futures: Indicating -57 open in China

• DAX Futures: Indicating -81 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure:  Moved to 25% Net Long