Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, European/Emerging Markets/US High-Yield Debt Angst, Consumer Discretionary/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 27.8 -.7%
• DJIA Intraday % Swing .77%
  
• Bloomberg Global Risk On/Risk Off Index 45.7 +2.6%

• Euro/Yen Carry Return Index 144.27 -12%

• Emerging Markets Currency Volatility(VXY) 11.5 +.4%

• CBOE S&P 500 Implied Correlation Index 50.4 -.75% 

• ISE Sentiment Index 90.0 -3.0 points
  

• Total Put/Call 1.14 +9.6%

• NYSE Arms .63 -74.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 102.05 +1.9%
  

• US Energy High-Yield OAS 395.72 +.16%
• Bloomberg TRACE # Distressed Bonds Traded 372.0 +24.0
  

• European Financial Sector CDS Index 137.39 +2.72%
  

• Italian/German 10Y Yld Spread 220.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 154.1 +5.4%
  

• Emerging Market CDS Index 295.06 +2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.64 -.14%

• 2-Year Swap Spread 41.75 basis points +1.5 basis points
  

• TED Spread 39.25 basis points +12.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 basis points +1.0 basis point
  
• MBS  5/10 Treasury Spread  155.0 +8.0 basis points
  
• iShares CMBS ETF 46.27 -.64%
• Avg. Auto ABS OAS .63 -5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.0 +.11%
• 3-Month T-Bill Yield 3.22% -3.0 basis points
  

• Yield Curve -42.25 basis points (2s/10s) +9.0 basis points
  

• China Iron Ore Spot 98.60 USD/Metric Tonne +1.2%
• Dutch TTF Nat Gas(European benchmark) 188.0 euros/megawatt-hour -.9%

• Citi US Economic Surprise Index 5.9 -.2 point

• Citi Eurozone Economic Surprise Index 8.0 -2.3 points
  

• Citi Emerging Markets Economic Surprise Index .2 -.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.31 -.32:  Growth Rate +16.0% -.4 percentage point, P/E 15.9 -.3
  
• Bloomberg US Financial Conditions Index -.79 -10.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.31% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.19% unch.
  
• 10-Year TIPS Spread 2.39 +3.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 67.0%(+0.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 66.0%(+13.2 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 112 new infections/100K people(last 7 days total). 6.4%(-0.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -81.6%(-.7 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -414 open in Japan 
• China A50 Futures: Indicating -17 open in China

• DAX Futures: Indicating +24 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 25% Net Long