Stocks Reversing Lower into Afternoon on Historically Divisive US Political Rhetoric, Eurozone Energy Crisis Escalation, US Policy-Induced Stagflation Fears, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.2 -1.5%
• DJIA Intraday % Swing .99% +8.7%
  
• Bloomberg Global Risk On/Risk Off Index 41.3 +.2%

• Euro/Yen Carry Return Index 143.67 +.05%

• Emerging Markets Currency Volatility(VXY) 11.5 -.61%

• CBOE S&P 500 Implied Correlation Index 45.3 +.3% 

• ISE Sentiment Index 94.0 -4.0 points
  

• Total Put/Call 1.04 +1.96%

• NYSE Arms 1.67 +70.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.45 +.9%
  

• US Energy High-Yield OAS 430.88 -.01%
• Bloomberg TRACE # Distressed Bonds Traded 391.0 +8.0
  

• European Financial Sector CDS Index 127.21 -3.2%

• Italian/German 10Y Yld Spread 232.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 142.83 -1.04%
  

• Emerging Market CDS Index 313.12 -4.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.55 unch.

• 2-Year Swap Spread 36.75 basis points +2.0 basis points
  

• TED Spread 25.75 basis points +10.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.0 basis points unch.
  
• MBS  5/10 Treasury Spread  141.0 -6.0 basis points
  
• iShares CMBS ETF 47.40 +.19%
• Avg. Auto ABS OAS .73 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.51 +.04%
• 3-Month T-Bill Yield 2.87% -6.0 basis points
  

• Yield Curve -21.0 basis points (2s/10s) +5.0 basis points
  

• China Iron Ore Spot 95.4 USD/Metric Tonne +.3%
• Dutch TTF Nat Gas(European benchmark) 215.0 euros/megawatt-hour -11.7%

• Citi US Economic Surprise Index -26.6 -5.7 points

• Citi Eurozone Economic Surprise Index -17.3 +.3 point
  

• Citi Emerging Markets Economic Surprise Index 12.1 +.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.17 +.01:  Growth Rate +16.0% unch., P/E 16.6 unch.
  
• Bloomberg US Financial Conditions Index -.43 -8.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.59% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.62% unch.: CPI YoY +8.24% unch.
  
• 10-Year TIPS Spread 2.45 -1.0 basis point
  
• Highest target rate probability for November 2nd FOMC meeting: 51.0%(-17.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 50.6%(-15.8 percentage points) chance of 3.75%-4.0%.
  

US Covid-19:

• 182 new infections/100K people(last 7 days total). 10.5%(+.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 -76.3%(-.0 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -151 open in Japan 
• China A50 Futures: Indicating -83 open in China

• DAX Futures: Indicating -390 open in Germany

Portfolio:

• Higher:  On gains in my commodity sector longs, emerging market shorts and index hedges
  

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

• Market Exposure:  Moved to Market Neutral