Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Higher Long-Term Rates, Technical Selling, Tech/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance:  Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 27.5 +.9%
• DJIA Intraday % Swing .68% -59.2%
  
• Bloomberg Global Risk On/Risk Off Index 4,911.0 +199.0 points

• Euro/Yen Carry Return Index 147.53 +.39%

• Emerging Markets Currency Volatility(VXY) 11.8 -.3%

• CBOE S&P 500 Implied Correlation Index 46.7 -3.2% 

• ISE Sentiment Index 96.0 -7.0 points
  

• Total Put/Call .94 +10.6%

• NYSE Arms 1.11 -17.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 94.86 unch.
  

• US Energy High-Yield OAS 455.20 -1.8%
• Bloomberg TRACE # Distressed Bonds Traded 379.0 -6.0
  

• European Financial Sector CDS Index 119.86 -.29%

• Italian/German 10Y Yld Spread 197.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 128.52 -4.2%
  

• Emerging Market CDS Index 322.85 +1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.51 -.34%
  
• Ukraine Sovereign Debt Credit Default Swap 9,404.86 -15.3%
  

• 2-Year Swap Spread 31.75 basis points -2.25 basis points
  

• TED Spread 60.25 basis points +4.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.5 basis points -.75 basis point
  
• MBS  5/10 Treasury Spread  136.0 -1.0 basis point
  
• iShares CMBS ETF 47.45 -.48%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.07 +.50%
• 3-Month T-Bill Yield 1.64% -1.0 basis point
  

• Yield Curve 6.5 basis points (2s/10s) +.5 basis point
  

• China Iron Ore Spot 119.0 USD/Metric Tonne-.7%

• Citi US Economic Surprise Index -66.9 +4.8 points

• Citi Eurozone Economic Surprise Index -28.2 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index 24.1 -1.5 points

• 10-Year TIPS Spread 2.56 -1.0 basis point
  
• Highest target rate probability for September 21st FOMC meeting: 65.4%(+1.9 percentage points) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 46.2%(+6.4 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 234 new infections/100K people(last 7 days total). 14.0%(+1.0 percentage point) of 1/14 peak +13/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -80.5%(-1.0 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -131 open in Japan 
• China A50 Futures: Indicating -11 open in China

• DAX Futures: Indicating -81 open in Germany

Portfolio:

• Higher:  On gains in my commodity/medical sector longs and index hedges
  

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

• Market Exposure:  Moved to 25% Net Long