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

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 24.6 +2.8%
• DJIA Intraday % Swing .84 +7.6%
  
• Bloomberg Global Risk On/Risk Off Index 5,125.0 -6.0 points

• Euro/Yen Carry Return Index 146.85 -.83%

• Emerging Markets Currency Volatility(VXY) 12.4 unch.

• CBOE S&P 500 Implied Correlation Index 45.0 +2.7% 

• ISE Sentiment Index 96.0 -42.0 points
  

• Total Put/Call .96 +4.35%

• NYSE Arms 1.39 +39%

Credit Investor Angst:

• North American Investment Grade CDS Index 85.5 +2.7%
  

• US Energy High-Yield OAS 375.88 +.45%
• Bloomberg TRACE # Distressed Bonds Traded 293.0 -18.0
  

• European Financial Sector CDS Index 102.90 +3.6%

• Italian/German 10Y Yld Spread 217.0 basis points +15.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 108.32 +.74%
  

• Emerging Market CDS Index 292.83 +20%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.8 n/a
  
• Ukraine Sovereign Debt Credit Default Swap 4,564.78 +7.0%
  

• 2-Year Swap Spread 35.5 basis points +2.25 basis points
  

• TED Spread 44.0 basis points +3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 basis points unch.
  
• MBS  5/10 Treasury Spread  120.0 +3.0 basis points
  
• iShares CMBS ETF 48.0 -.15%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.77 +.26%
• 3-Month T-Bill Yield 1.25% +1.0 basis point
  

• Yield Curve 22.5 basis points (2s/10s) -3.5 basis points
  

• China Iron Ore Spot 140.6 USD/Metric Tonne -3.3%

• Citi US Economic Surprise Index -46.7 -3.9 points

• Citi Eurozone Economic Surprise Index 28.2 +.8 point
  

• Citi Emerging Markets Economic Surprise Index 12.0 -1.3 points

• 10-Year TIPS Spread 2.77 unch.
  
• 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:

• 234 new infections/100K people(last 7 days total). 14.0%(unch.) of 1/14 peak +1/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -81.2%(+.2 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -100 open in Japan 
• China A50 Futures: Indicating -161 open in China

• DAX Futures: Indicating -23 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to Market Neutral