Stocks Slightly Lower into Afternoon on Escalating China Tensions, Earnings Outlook Jitters, Technical Resistance, Energy/Bank Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance:  Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.9 -.1%
• DJIA Intraday % Swing .54% -44.3%
  
• Bloomberg Global Risk On/Risk Off Index 3,372.0 -44.0 points

• Euro/Yen Carry Return Index 140.17 +.14%

• Emerging Markets Currency Volatility(VXY) 12.3 -.5%

• CBOE S&P 500 Implied Correlation Index 43.1 -.8% 

• ISE Sentiment Index 101.0 -6.0 points
  

• Total Put/Call .84 -4.6%

• NYSE Arms .95 -15.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.8 -1.3%
  

• US Energy High-Yield OAS 477.40 -.50%
• Bloomberg TRACE # Distressed Bonds Traded 422.0 -12.0
  

• European Financial Sector CDS Index 110.75 +1.1%

• Italian/German 10Y Yld Spread 213.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 150.82 -.23%
  

• Emerging Market CDS Index 318.01 -2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.65 +.02%
  
• Ukraine Sovereign Debt Credit Default Swap 14,699.1 +9.1%
  

• 2-Year Swap Spread 27.75 basis points -1.0 basis point
  

• TED Spread 38.0 basis points +7.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.25 basis points +1.5 basis points
  
• MBS  5/10 Treasury Spread  114.0 -2.0 basis points
  
• iShares CMBS ETF 48.69 +.4%
• Avg. Auto ABS OAS .99 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 49.19 +.36%
• 3-Month T-Bill Yield 2.42% -4.0 basis points
  

• Yield Curve -36.5 basis points (2s/10s) -.5 basis point
  

• China Iron Ore Spot 106.75 USD/Metric Tonne -1.8%

• Citi US Economic Surprise Index -43.5 +.4 point

• Citi Eurozone Economic Surprise Index -53.7 +.8 point
  

• Citi Emerging Markets Economic Surprise Index 21.4 +.2 point 
• S&P 500 Blended Forward 12 Months Mean EPS Estimate Growth Rate +16.1% +.2 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +1.45% +.19 percentage point
  

• 10-Year TIPS Spread 2.47 -3.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 45.4%(-1.5 percentage points) chance of 3.25%-3.5%. Highest target rate probability for December 14th meeting: 44.3%(+1.0 percentage point) chance of 3.25%-3.5%.
  

US Covid-19:

• 252 new infections/100K people(last 7 days total). 14.5%(-1.6 percentage points) of 1/14/22 peak(1,740) -28/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -71.6%(-1.0 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -50 open in Japan 
• China A50 Futures: Indicating -24 open in China

• DAX Futures: Indicating -17 open in Germany

Portfolio:

• Slightly Lower:  On losses in my medical/commodity sector longs
  

• Disclosed Trades:  None
  

• Market Exposure:  50% net long