Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, China Hard-Landing Worries, Technical Selling, Commodity/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.3 +4.0%
• DJIA Intraday % Swing 1.74% +59.4%
  
• Bloomberg Global Risk On/Risk Off Index 39.5 -5.4%

• Euro/Yen Carry Return Index 143.14 +.27%

• Emerging Markets Currency Volatility(VXY) 11.7 -.6%

• CBOE S&P 500 Implied Correlation Index 46.8 +1.9% 

• ISE Sentiment Index 87.0 -8.0 points
  

• Total Put/Call 1.17 -3.3%

• NYSE Arms 1.62 +68.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.4 +3.9%
  

• US Energy High-Yield OAS 416.82 +2.7%
• Bloomberg TRACE # Distressed Bonds Traded 356.0 +6.0
  

• European Financial Sector CDS Index 126.68 +5.6%

• Italian/German 10Y Yld Spread 232.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.28 -2.4%
  

• Emerging Market CDS Index 328.82 +.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.53 -.54%

• 2-Year Swap Spread 36.0 basis points +1.5 basis points
  

• TED Spread 17.25 basis points -8.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 basis points +.5 basis point
  
• MBS  5/10 Treasury Spread  140.0 +3.0 basis points
  
• iShares CMBS ETF 47.52 -.15%
• Avg. Auto ABS OAS .80 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.80 -.04%
• 3-Month T-Bill Yield 2.89% +3.0 basis points
  

• Yield Curve -35.5 basis points (2s/10s) -4.5 basis points
  

• China Iron Ore Spot 98.2 USD/Metric Tonne -3.1%
• Dutch TTF Nat Gas(European benchmark) 253.0 euros/megawatt-hour -7.2%

• Citi US Economic Surprise Index -16.8 +5.5 points

• Citi Eurozone Economic Surprise Index -34.5 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index 19.4 +.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.02 +.09:  Growth Rate +15.9% +.1 percentage point, P/E 16.8 -.3 point
  
• Bloomberg US Financial Conditions Index -.40 -5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +1.57% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.62% unch.: CPI YoY +8.28% unch.
  
• 10-Year TIPS Spread 2.55 -2.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 66.9%(+4.9 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 68.4%(+9.3 percentage points) chance of 3.75%-4.0%.
  

US Covid-19:

• 182 new infections/100K people(last 7 days total). 10.5%(unch.) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -75.6%(+1.6 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -285 open in Japan 
• China A50 Futures: Indicating -105 open in China

• DAX Futures: Indicating -43 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