Stocks Slightly Lower into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Technical Selling, Healthcare/REIT Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance:  Mixed
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.9 +.3%
• DJIA Intraday % Swing .84% -50.8%
  
• Bloomberg Global Risk On/Risk Off Index 42.0 +.7%

• Euro/Yen Carry Return Index 140.29 -.30%

• Emerging Markets Currency Volatility(VXY) 12.1 -.25%

• CBOE S&P 500 Implied Correlation Index 45.4 -.7% 

• ISE Sentiment Index 117.0 +31.0 points
  

• Total Put/Call 1.0 -11.5%

• NYSE Arms .76 +5.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 84.36 +.3%
  

• US Energy High-Yield OAS 407.77 +.57%
• Bloomberg TRACE # Distressed Bonds Traded 341.0 +4.0
  

• European Financial Sector CDS Index 119.26 +1.7%

• Italian/German 10Y Yld Spread 233.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 143.74 -.48%
  

• Emerging Market CDS Index 322.94 -4.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.80 +.49%
  
• Ukraine Sovereign Debt Credit Default Swap 9,588.9 n/a
  

• 2-Year Swap Spread 37.5 basis points +1.0 basis point
  

• TED Spread 24.75 basis points -6.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.0 basis points +1.0 basis point
  
• MBS  5/10 Treasury Spread  138.0 -1.0 basis point
  
• iShares CMBS ETF 47.99 +.1%
• Avg. Auto ABS OAS .93 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.74 +.25%
• 3-Month T-Bill Yield 2.70% -1.0 basis point
  

• Yield Curve -26.25 basis points (2s/10s) +5.5 basis points
  

• China Iron Ore Spot 105.05 USD/Metric Tonne +4.8%
• Dutch TTF Nat Gas(European benchmark) 260.0 euros/megawatt-hour -6.1%

• Citi US Economic Surprise Index -21.6 -11.8 points

• Citi Eurozone Economic Surprise Index -45.8 +4.1 points
  

• Citi Emerging Markets Economic Surprise Index 26.5 -1.0 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.85 +.17:  Growth Rate +15.7% +.1 percentage point, P/E 17.4 -.1 point
  
• US Atlanta Fed GDPNow Q3 Forecast +1.62% unch.
  
• Bloomberg US Financial Conditions Index -.40 -8.0 basis points
  

• 1-Year TIPS Spread 2.75 +7.0 basis points: 10-Year TIPS Spread 2.59 +2.0 basis point
  
• Highest target rate probability for November 2nd FOMC meeting: 49.8%(+1.4 percentage points) chance of 3.25%-3.5%. Highest target rate probability for December 14th meeting: 47.1%(+.4 percentage point) chance of 3.50%-3.75%.
  

US Covid-19:

• 196 new infections/100K people(last 7 days total). 11.3%(-.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -74.3%(+2.3 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +18 open in Japan 
• China A50 Futures: Indicating +69 open in China

• DAX Futures: Indicating -42 open in Germany

Portfolio:

• Lower:  On losses in my medical/utility sector longs and emerging market shorts
  

• Disclosed Trades:  Covered some of my index hedges and emerging market shorts
  

• Market Exposure:  Moved to 50% Net Long