Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, US High-Yld Debt Angst, Tech/Commodity 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) 26.0 -.8%
• DJIA Intraday % Swing 1.07%
  
• Bloomberg Global Risk On/Risk Off Index 44.8 +1.7%

• Euro/Yen Carry Return Index 147.59 +.37%

• Emerging Markets Currency Volatility(VXY) 11.5 +1.4%

• CBOE S&P 500 Implied Correlation Index 47.7 -.44% 

• ISE Sentiment Index 81.0 -8.0 points
  

• Total Put/Call 1.04 -3.7%

• NYSE Arms .70 -25.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 87.4 +2.3%
  

• US Energy High-Yield OAS 391.65 -.25%
• Bloomberg TRACE # Distressed Bonds Traded 353.0 -8.0
  

• European Financial Sector CDS Index 117.81 -1.7%

• Italian/German 10Y Yld Spread 228.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 123.60 -2.0%
  

• Emerging Market CDS Index 311.21 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.80 +.28%

• 2-Year Swap Spread 41.0 basis points +.5 basis point
  

• TED Spread 11.75 basis points +5.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.0 basis points +4.5 basis points
  
• MBS  5/10 Treasury Spread  149.0 +2.0 basis points
  
• iShares CMBS ETF 46.89 unch.
• Avg. Auto ABS OAS .68 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.24 -.35%
• 3-Month T-Bill Yield 3.15% -4.0 basis points
  

• Yield Curve -41.75 basis points (2s/10s) -5.0 basis points
  

• China Iron Ore Spot 100.3 USD/Metric Tonne -2.3%
• Dutch TTF Nat Gas(European benchmark) 214.0 euros/megawatt-hour -1.7%

• Citi US Economic Surprise Index 2.5 -3.3 points

• Citi Eurozone Economic Surprise Index -13.2 -2.0 points
  

• Citi Emerging Markets Economic Surprise Index -8.0 +2.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.63 +.05:  Growth Rate +15.9% unch., P/E 16.5 -.1
  
• Bloomberg US Financial Conditions Index -.47 -20.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.52% -78.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.21% unch.
  
• 10-Year TIPS Spread 2.45 -2.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 59.1%(+5.2 percentage points) chance of 3.75%-4.0%. Highest target rate probability for December 14th meeting: 46.5%(+7.5 percentage points) chance of 4.25%-4.5%.
  

US Covid-19:

• 126 new infections/100K people(last 7 days total). 7.2%(-.8 percentage point) of 1/14/22 peak(1,740) -14/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -79.7%(-.6 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -360 open in Japan 
• China A50 Futures: Indicating -60 open in China

• DAX Futures: Indicating -11 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

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

• Market Exposure:  Moved to Market Neutral