Stocks Reversing Sharply Lower into Final Hour on US Policy-Induced Stagflation Fears, European/Emerging Markets/US High Yld Debt Angst, Earnings Outlook Worries, Tech/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 28.0 +4.0%
• DJIA Intraday % Swing 2.47% +264.2%
  
• Bloomberg Global Risk On/Risk Off Index 4,947.0 +25.0 points

• Euro/Yen Carry Return Index 147.50 +.02%

• Emerging Markets Currency Volatility(VXY) 11.7 -.7%

• CBOE S&P 500 Implied Correlation Index 48.3 +5.5% 

• ISE Sentiment Index 89.0 -12.0 points
  

• Total Put/Call .95 unch.

• NYSE Arms 1.24 +17.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.98 +4.2%
  

• US Energy High-Yield OAS 465.81 +1.8%
• Bloomberg TRACE # Distressed Bonds Traded 384.0 -1.0
  

• European Financial Sector CDS Index 124.72 +4.3%

• Italian/German 10Y Yld Spread 193.0 basis points -9.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.73 +.6%
  

• Emerging Market CDS Index 339.50 +4.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.35 -.26%
  
• Ukraine Sovereign Debt Credit Default Swap 8,663.02 -8.6%
  

• 2-Year Swap Spread 33.5 basis points -.5 basis point
  

• TED Spread 50.25 basis points -5.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.0 basis points +.25 basis point
  
• MBS  5/10 Treasury Spread  139.0 +2.0 basis points
  
• iShares CMBS ETF 47.55 +.21%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 50.95 -.2%
• 3-Month T-Bill Yield 1.71% +6.0 basis points
  

• Yield Curve 7.75 basis points (2s/10s) +1.75 basis points
  

• China Iron Ore Spot 123.80 USD/Metric Tonne +2.7%

• Citi US Economic Surprise Index -68.9 +2.8 points

• Citi Eurozone Economic Surprise Index -28.0 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index 23.5 -2.1 points

• 10-Year TIPS Spread 2.49 -8.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 65.7%(+.1 percentage point) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 47.8%(+1.9 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 250 new infections/100K people(last 7 days total). 15.0%(+2.0 percentage points) of 1/14 peak +29/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -77.8%(+1.7 percentage points) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -225 open in Japan 
• China A50 Futures: Indicating -93 open in China

• DAX Futures: Indicating -131 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to Market Neutral