Stocks Plunging into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Surging European/Emerging Markets/US High-Yield Debt Angst, 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) 32.5 +7.7%
• DJIA Intraday % Swing 1.6%
  
• Bloomberg Global Risk On/Risk Off Index 46.5 -3.7%

• Euro/Yen Carry Return Index 145.63 +.77%

• Emerging Markets Currency Volatility(VXY) 12.7 +.6%

• CBOE S&P 500 Implied Correlation Index 50.5 +3.3% 

• ISE Sentiment Index 86.0 -29.0 points
  

• Total Put/Call 1.09 +1.9%

• NYSE Arms 1.24 +138.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 110.28 +3.14%
  

• US Energy High-Yield OAS 459.52 +1.82%
• Bloomberg TRACE # Distressed Bonds Traded 426.0 +15.0
  

• European Financial Sector CDS Index 153.31 +3.74%
  

• Italian/German 10Y Yld Spread 247.0 basis points +6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 186.12 +2.2%
  

• Emerging Market CDS Index 336.26 +5.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 unch.

• 2-Year Swap Spread 28.5 basis points -4.5 basis points
  

• TED Spread 34.25 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -69.75 basis points -46.0 basis points
  
• MBS  5/10 Treasury Spread  168.0 +5.0 basis points
  
• iShares CMBS ETF 46.03 -.33%
• Avg. Auto ABS OAS .67 +3.0 basis  points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.24 -.19%
• 3-Month T-Bill Yield 3.29% +1.0 basis point
  

• Yield Curve -42.0 basis points (2s/10s) -4.25 basis points
  

• China Iron Ore Spot 96.6 USD/Metric Tonne +.3%
• Dutch TTF Nat Gas(European benchmark) 185.0 euros/megawatt-hour -10.6%

• Citi US Economic Surprise Index 18.5 +3.5 points

• Citi Eurozone Economic Surprise Index -5.7 -4.9 points
  

• Citi Emerging Markets Economic Surprise Index -.3 +.9 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.01 -.02:  Growth Rate +15.7% -.1 percentage point, P/E 15.3 -.4
  
• Bloomberg US Financial Conditions Index -1.27 +1.0 basis point
  
• US Atlanta Fed GDPNow Forecast +.27% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.21 -12.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 61.6%(+15.5 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 55.4%(+21.6 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 105 new infections/100K people(last 7 days total). 6.0%(-.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 -82.7%(-.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -372 open in Japan 
• China A50 Futures: Indicating -21 open in China

• DAX Futures: Indicating -37 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to Market Neutral