Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, US Rail Strike Worries, Escalating European Energy Crisis Concerns, Road & Rail/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 26.9 -1.2%
• DJIA Intraday % Swing .99%
  
• Bloomberg Global Risk On/Risk Off Index 43.4 -1.5%

• Euro/Yen Carry Return Index 147.11 -.84%

• Emerging Markets Currency Volatility(VXY) 11.3 -.4%

• CBOE S&P 500 Implied Correlation Index 48.6 +2.7% 

• ISE Sentiment Index 90.0 +1.0 points
  

• Total Put/Call 1.03 -11.2%

• NYSE Arms .98 -60.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 85.28 +.43%
  

• US Energy High-Yield OAS 394.61 +1.5%
• Bloomberg TRACE # Distressed Bonds Traded 361.0 +19.0
  

• European Financial Sector CDS Index 115.91 -1.96%

• Italian/German 10Y Yld Spread 229.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 126.26 +2.25%
  

• Emerging Market CDS Index 305.27 -1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.72 +.54%

• 2-Year Swap Spread 40.5 basis points +5.5 basis points
  

• TED Spread 6.0 basis points -2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -24.5 basis points -2.5 basis points
  
• MBS  5/10 Treasury Spread  147.0 +5.0 basis points
  
• iShares CMBS ETF 46.89 +.09%
• Avg. Auto ABS OAS .69 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.41 -.07%
• 3-Month T-Bill Yield 3.19% +1.0 basis point
  

• Yield Curve -36.75 basis points (2s/10s) -2.75 basis points
  

• China Iron Ore Spot 102.7 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 222.0 euros/megawatt-hour +11.8%

• Citi US Economic Surprise Index 5.8 +.4 point

• Citi Eurozone Economic Surprise Index -15.2 -2.9 points
  

• Citi Emerging Markets Economic Surprise Index -10.2 -1.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.58 -.03:  Growth Rate +15.9% unch., P/E 16.6 -.2
  
• Bloomberg US Financial Conditions Index -.21 -6.0 basis points
  
• US Atlanta Fed GDPNow Forecast +1.30% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.21% unch.
  
• 10-Year TIPS Spread 2.47 +2.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 55.6%(+5.8 percentage points) chance of 3.75%-4.0%. Highest target rate probability for December 14th meeting: 39.3%(+5.9 percentage points) chance of 4.25%-4.5%.
  

US Covid-19:

• 140 new infections/100K people(last 7 days total). 8.0%(+.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 -79.1%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -130 open in Japan 
• China A50 Futures: Indicating -16 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio:

• Slightly Higher:  On gains in my commodity/utility sector longs
  

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

• Market Exposure:  Moved to Market Neutral