Stocks Falling Substantially into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, European Energy Crisis Concerns, Consumer Discretionary/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 27.6 +7.1%
• DJIA Intraday % Swing 1.38%
  
• Bloomberg Global Risk On/Risk Off Index 45.5 +1.8%

• Euro/Yen Carry Return Index 147.46 -.27%

• Emerging Markets Currency Volatility(VXY) 11.5 -.35%

• CBOE S&P 500 Implied Correlation Index 49.9 +4.7% 

• ISE Sentiment Index 106.0 +31.0 points
  

• Total Put/Call .86 -8.5%

• NYSE Arms 1.40 +194.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.67 +13.3% (new series)
  

• US Energy High-Yield OAS 400.84 +.43%
• Bloomberg TRACE # Distressed Bonds Traded 332.0 -9.0
  

• European Financial Sector CDS Index 131.71 +8.5% (new series)
  

• Italian/German 10Y Yld Spread 227.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 140.25 +8.23% (new series)
  

• Emerging Market CDS Index 291.07 -6.75% (new series)
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.69 -.45%

• 2-Year Swap Spread 39.0 basis points +1.75 basis points
  

• TED Spread 32.5 basis points -14.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.5 basis points -2.75 basis points
  
• MBS  5/10 Treasury Spread  155.0 -2.0 basis points
  
• iShares CMBS ETF 46.65 +.24%
• Avg. Auto ABS OAS .68 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.13 -.32%
• 3-Month T-Bill Yield 3.23% +13.0 basis points
  

• Yield Curve -40.75 basis points (2s/10s) +6.25 basis points
  

• China Iron Ore Spot 95.4 USD/Metric Tonne -3.5%
• Dutch TTF Nat Gas(European benchmark) 199.50 euros/megawatt-hour +9.5%

• Citi US Economic Surprise Index 6.1 +2.5 points

• Citi Eurozone Economic Surprise Index 9.40 +8.2 points
  

• Citi Emerging Markets Economic Surprise Index 0.0 +1.8 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.63 -.97:  Growth Rate +16.1% +.2 percentage point, P/E 16.2 -.1
  
• Bloomberg US Financial Conditions Index -.61 +19.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.31% -21.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.19% -2.0 basis points
  
• 10-Year TIPS Spread 2.39 +6.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 61.6%(-.2 percentage point) chance of 3.75%-4.0%. Highest target rate probability for December 14th meeting: 44.8%(-.9 percentage point) chance of 4.25%-4.5%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-.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 -80.9%(+1.2 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -553 open in Japan 
• China A50 Futures: Indicating -48 open in China

• DAX Futures: Indicating -83 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to Market Neutral