Stocks Lower into Final Hour on Escalating China Tensions, US Policy-Induced Stagflation Fears, Asian Debt Angst, Transport/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance:  Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.2 +8.8%
• DJIA Intraday % Swing 1.04% +2.8%
  
• Bloomberg Global Risk On/Risk Off Index 3,318.0 +16.0 points

• Euro/Yen Carry Return Index 139.22 +.22%

• Emerging Markets Currency Volatility(VXY) 12.3 +.2%

• CBOE S&P 500 Implied Correlation Index 45.2 +2.1% 

• ISE Sentiment Index 102.0 -4.0 points
  

• Total Put/Call 1.0 -1.0%

• NYSE Arms .84 -40.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.45 +.74%
  

• US Energy High-Yield OAS 424.28 -7.0%
• Bloomberg TRACE # Distressed Bonds Traded 433.0 -3.0
  

• European Financial Sector CDS Index 113.90 +2.9%

• Italian/German 10Y Yld Spread 225.0 basis points +14.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 154.23 +7.0%
  

• Emerging Market CDS Index 334.78 +2.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.78 -.2%
  
• Ukraine Sovereign Debt Credit Default Swap 12,320.1 +5.0%
  

• 2-Year Swap Spread 26.5 basis points +.25 basis point
  

• TED Spread 32.25 basis points -15.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.25 basis points +.25 basis point
  
• MBS  5/10 Treasury Spread  123.0 +11.0 basis points
  
• iShares CMBS ETF 48.59 -.39%
• Avg. Auto ABS OAS 1.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 49.01 -.53%
• 3-Month T-Bill Yield 2.48% +16.0 basis points
  

• Yield Curve -33.5 basis points (2s/10s) -3.0 basis points
  

• China Iron Ore Spot 113.5 USD/Metric Tonne -2.6%

• Citi US Economic Surprise Index -56.9 -.4 point

• Citi Eurozone Economic Surprise Index -60.7 +1.7 points
  

• Citi Emerging Markets Economic Surprise Index 20.5 -1.8 points

• 10-Year TIPS Spread 2.48 -3.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 47.6%(-19.9 percentage points) chance of 3.0%-3.25%. Highest target rate probability for December 14th meeting: 46.4%(-1.9 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 273 new infections/100K people(last 7 days total). 15.7%(+.4 percentage points) of 1/14/22 peak(1,740) +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -70.8%(+1.9 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +229 open in Japan 
• China A50 Futures: Indicating -12 open in China

• DAX Futures: Indicating -5 open in Germany

Portfolio:

• Higher:  On gains in my tech/medical/commodity/utility sector longs and emerging market shorts
  

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

• Market Exposure:  Moved to 25% net long