Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Diminished Fed "Pivot" Hopes, Dollar Strength, Utility/Alt Energy 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) 29.8 +4.3%
• DJIA Intraday % Swing 1.13%
  
• Bloomberg Global Risk On/Risk Off Index 48.1 -.5%

• Euro/Yen Carry Return Index 146.75 -.45%

• Emerging Markets Currency Volatility(VXY) 12.3 +.6%

• CBOE S&P 500 Implied Correlation Index 48.6 +1.14% 

• ISE Sentiment Index 113.0 +24.0 points
  

• Total Put/Call .89 +1.14%

• NYSE Arms 1.09 +26.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 96.83 -.47%
  

• US Energy High-Yield OAS 403.41 -2.21%
• Bloomberg TRACE # Distressed Bonds Traded 448.0 -16.0
  

• European Financial Sector CDS Index 141.75 -.47% 
• Credit Suisse Subordinated 5Y Credit Default Swap 469.14 -4.1%
  

• Italian/German 10Y Yld Spread 243.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 176.24 +2.13%
  

• Emerging Market CDS Index 305.10 +.12%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.55 -.24%

• 2-Year Swap Spread 28.5 basis points -1.0 basis point
  

• TED Spread 38.0 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -59.75 basis points +3.75 basis points
  
• MBS  5/10 Treasury Spread  169.0 +2.0 basis points
  
• iShares CMBS ETF 45.52 -1.32%
• Avg. Auto ABS OAS .79 +8.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.23 -.39%
• 3-Month T-Bill Yield 3.36% -1.0 basis point
  

• Yield Curve -42.75 basis points (2s/10s) -3.25 basis points
  

• China Iron Ore Spot 94.25 USD/Metric Tonne +.25%
• Dutch TTF Nat Gas(European benchmark) 166.90 euros/megawatt-hour -3.91%

• Citi US Economic Surprise Index 4.70 -2.8 points

• Citi Eurozone Economic Surprise Index .5 -2.3 points
  

• Citi Emerging Markets Economic Surprise Index -4.7 -.8 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.07 -.18:  Growth Rate +15.7% -.1 percentage point, P/E 15.9 -.1
  
• Bloomberg US Financial Conditions Index -1.02 -5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.70% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.21 unch.
  
• Highest target rate probability for December 14th FOMC meeting: 74.6%(+10.3 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 62.9%(+10.7 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(-.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 -83.9%(unch.) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -261 open in Japan 
• China A50 Futures: Indicating +375 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% net long