Stocks Plunging into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Dollar Strength, Tech/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.5 +6.7%
• DJIA Intraday % Swing 1.82%
  
• Bloomberg Global Risk On/Risk Off Index 45.3 -1.7%

• Euro/Yen Carry Return Index 148.52 -.26%

• Emerging Markets Currency Volatility(VXY) 11.3 +1.2%

• CBOE S&P 500 Implied Correlation Index 47.1 +4.5% 

• ISE Sentiment Index 94.0 -10.0 points
  

• Total Put/Call 1.07 -.93%

• NYSE Arms 1.27 +130.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 84.40 +6.4%
  

• US Energy High-Yield OAS 386.03 -.33%
• Bloomberg TRACE # Distressed Bonds Traded 342.0 -7.0
  

• European Financial Sector CDS Index 118.19 +4.9%

• Italian/German 10Y Yld Spread 227.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 123.4 -1.7%
  

• Emerging Market CDS Index 303.79 +6.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.58-.48%

• 2-Year Swap Spread 35.0 basis points +2.5 basis points
  

• TED Spread 8.75 basis points -15.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.0 basis points -2.25 basis points
  
• MBS  5/10 Treasury Spread  142.0 -2.0 basis points
  
• iShares CMBS ETF 46.90 -.87%
• Avg. Auto ABS OAS .70 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.48 -.70%
• 3-Month T-Bill Yield 3.18% +13.0 basis points
  

• Yield Curve -34.0 basis points (2s/10s) -9.0 basis points
  

• China Iron Ore Spot 102.4 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 202.30 euros/megawatt-hour +6.2%

• Citi US Economic Surprise Index 5.4 +15.0 points

• Citi Eurozone Economic Surprise Index -12.3 +.6 point
  

• Citi Emerging Markets Economic Surprise Index -9.0 -4.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.61 +.13:  Growth Rate +15.9% +.1 percentage point, P/E 16.8 -.5
  
• Bloomberg US Financial Conditions Index -.08 +13.0 basis points
  
• US Atlanta Fed GDPNow Forecast +1.30% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% +6.0 basis points: CPI YoY +8.21% -3.0 basis points
  
• 10-Year TIPS Spread 2.45 +3.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 49.7%(+35.6 percentage points) chance of 3.75%-4.0%. Highest target rate probability for December 14th meeting: 43.3%(+19.9 percentage points) chance of 4.0%-4.25%.
  

US Covid-19:

• 140 new infections/100K people(last 7 days total). 8.0%(+.4 percentage point) of 1/14/22 peak(1,740) +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -79.2%(+.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -801 open in Japan 
• China A50 Futures: Indicating -156 open in China

• DAX Futures: Indicating -17 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% Net Long