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

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Every Sector Declining
  

• Volume:  Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 32.8 +18.1%
• DJIA Intraday % Swing 2.08% +8.9%
  
• Bloomberg Global Risk On/Risk Off Index 4,721.0 -185.0 points

• Euro/Yen Carry Return Index 144.11 -1.0%

• Emerging Markets Currency Volatility(VXY) 13.2 +4.9%

• CBOE S&P 500 Implied Correlation Index 50.6 +5.4% 

• ISE Sentiment Index 82.0 +26.0 points
  

• Total Put/Call 1.29 -.77%

• NYSE Arms 1.61 +17.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 97.04 +6.6%
  

• US Energy High-Yield OAS 378.29 +.8%
• Bloomberg TRACE # Distressed Bonds Traded 323.0 +30.0
  

• European Financial Sector CDS Index 118.49 +8.4%

• Italian/German 10Y Yld Spread 240.0 basis points +23.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.0 +15.5%
  

• Emerging Market CDS Index 326.02 +5.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.3 -1.21%
  
• Ukraine Sovereign Debt Credit Default Swap 5,934.75 +16.2%
  

• 2-Year Swap Spread 39.0 basis points +3.5 basis points
  

• TED Spread 44.25 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.25 basis points -6.5 basis points
  
• MBS  5/10 Treasury Spread  136.0 +16.0 basis points
  
• iShares CMBS ETF 47.30 -1.3%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 50.70 -.76%
• 3-Month T-Bill Yield 1.25% +22.0 basis points
  

• Yield Curve 8.5 basis points (2s/10s) -13.5 basis points
  

• China Iron Ore Spot 134.4 USD/Metric Tonne -4.1%

• Citi US Economic Surprise Index -45.0 +1.7 points

• Citi Eurozone Economic Surprise Index 35.3 +7.1 points
  

• Citi Emerging Markets Economic Surprise Index 21.1 +9.1 points

• 10-Year TIPS Spread 2.76 -1.0 basis point
  
• 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:

• 228 new infections/100K people(last 7 days total). 13.0%(-1.0 percentage point) of 1/14 peak -6/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -82.0%(-.8 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -512 open in Japan 
• China A50 Futures: Indicating -180 open in China

• DAX Futures: Indicating +58 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

• Disclosed Trades:  Added to my emerging market shorts
  

• Market Exposure:  Moved to Market Neutral