Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Escalating European Energy/Currency Crisis Worries, Rising European/Emerging Markets/US High-Yield Debt Angst, Financial/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 33.5 +3.8%
• DJIA Intraday % Swing 2.4%
  
• Bloomberg Global Risk On/Risk Off Index 48.4 +5.0%

• Euro/Yen Carry Return Index 143.0 -.2%

• Emerging Markets Currency Volatility(VXY) 12.1 -.08%

• CBOE S&P 500 Implied Correlation Index 52.6 +.7% 

• ISE Sentiment Index 98.0 +3.0 points
  

• Total Put/Call 1.07 +13.8%

• NYSE Arms .95 -28.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 111.43 +2.0%
  

• US Energy High-Yield OAS 430.45 +2.4%
• Bloomberg TRACE # Distressed Bonds Traded 396.0 +3.0
  

• European Financial Sector CDS Index 151.61 +2.6%
  

• Italian/German 10Y Yld Spread 253.0 basis points +8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 170.50 +3.4%
  

• Emerging Market CDS Index 335.30 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.09 -.99%

• 2-Year Swap Spread 27.0 basis points -8.25 basis points
  

• TED Spread 34.5 basis points -10.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 basis points +4.0 basis points
  
• MBS  5/10 Treasury Spread  173.0 -6.0 basis points
  
• iShares CMBS ETF 45.72 -.37%
• Avg. Auto ABS OAS .61 -1.0 basis  point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.1 -.14%
• 3-Month T-Bill Yield 3.29% +5.0 basis points
  

• Yield Curve -34.75 basis points (2s/10s) +9.25 basis points
  

• China Iron Ore Spot 97.2 USD/Metric Tonne +.3%
• Dutch TTF Nat Gas(European benchmark) 208.0 euros/megawatt-hour +19.7%

• Citi US Economic Surprise Index 14.9 +4.0 points

• Citi Eurozone Economic Surprise Index -.9 +3.7 points
  

• Citi Emerging Markets Economic Surprise Index -2.4 -1.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.26 +.03:  Growth Rate +15.9% +.1 percentage point, P/E 15.4 -.1
  
• Bloomberg US Financial Conditions Index -1.11 -1.0 basis point
  
• US Atlanta Fed GDPNow Forecast +.27% -4.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.20% +1.0 basis point
  
• 10-Year TIPS Spread 2.33 -1.0 basis point
  
• Highest target rate probability for December 14th FOMC meeting: 59.2%(-10.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 57.1%(-11.2 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 -82.6%(+.8 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -481 open in Japan 
• China A50 Futures: Indicating -78 open in China

• DAX Futures: Indicating -60 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my emerging market shorts
  

• Market Exposure:  Moved to Market Neutral