Stocks Finish Lower on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Technical Selling, Commodity/Retail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 28.7 +2.1%
• DJIA Intraday % Swing 1.22% +46.4%
  
• Bloomberg Global Risk On/Risk Off Index 4,315.0 -227.0 points

• Euro/Yen Carry Return Index 146.14 -.43%

• Emerging Markets Currency Volatility(VXY) 11.9 +.2%

• CBOE S&P 500 Implied Correlation Index 48.1 +.6% 

• ISE Sentiment Index 92.0 +12.0 points
  

• Total Put/Call .90 -27.4%

• NYSE Arms 2.2 +40.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 100.72 +.7%
  

• US Energy High-Yield OAS 524.23 +5.5%
• Bloomberg TRACE # Distressed Bonds Traded 465.0 +44.0
  

• European Financial Sector CDS Index 128.70 +.95%

• Italian/German 10Y Yld Spread 193.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 141.79 +4.9%
  

• Emerging Market CDS Index 338.70 +.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.31 -.17%
  
• Ukraine Sovereign Debt Credit Default Swap 9,415.27 -.4%
  

• 2-Year Swap Spread 32.75 basis points -2.5 basis points
  

• TED Spread 54.25 basis points +5.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -26.5 basis points -1.0 basis points
  
• MBS  5/10 Treasury Spread  136.0 -1.0 basis point
  
• iShares CMBS ETF 48.19 +.63%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 50.71 -.47%
• 3-Month T-Bill Yield 1.64% -8.0 basis points
  

• Yield Curve 4.5 basis points (2s/10s) +1.25 basis points
  

• China Iron Ore Spot 115.3 USD/Metric Tonne -5.2%

• Citi US Economic Surprise Index -71.6 -3.3 points

• Citi Eurozone Economic Surprise Index -25.3 -8.4 points
  

• Citi Emerging Markets Economic Surprise Index 28.5 +5.5 points

• 10-Year TIPS Spread 2.35 -4.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 68.5%(+2.3 percentage points) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 49.1%(+14.3 percentage points) chance of 3.0%-3.25%.
  

US Covid-19:

• 214 new infections/100K people(last 7 days total). 13.0%(-1.0 percentage point) of 1/14 peak -22/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -77.3%(-.1 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -13 open in Japan 
• China A50 Futures: Indicating -40 open in China

• DAX Futures: Indicating +6 open in Germany

Portfolio:

• Slightly Lower:  On losses in my in my medical/tech/commodity sector longs
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 25% Net Long