Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, European/Emerging Markets/US High-Yield Debt Angst, Dollar Strength, Telecom/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  About Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 29.0 -.1%
• DJIA Intraday % Swing 1.52%
  
• Bloomberg Global Risk On/Risk Off Index 48.0 +9.2%

• Euro/Yen Carry Return Index 147.29 -.72%

• Emerging Markets Currency Volatility(VXY) 12.3 +1.3%

• CBOE S&P 500 Implied Correlation Index 49.2 +.16% 

• ISE Sentiment Index 87.0 -8.0 points
  

• Total Put/Call .91 -5.2%

• NYSE Arms .74 +131.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 97.84 -.96%
  

• US Energy High-Yield OAS 415.89 -2.44%
• Bloomberg TRACE # Distressed Bonds Traded 464.0 -2.0
  

• European Financial Sector CDS Index 142.41 +2.57% 
• Credit Suisse Subordinated 5Y Credit Default Swap 477.61 +16.1%
  

• Italian/German 10Y Yld Spread 244.0 basis points +13.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 172.55 -3.99%
  

• Emerging Market CDS Index 305.22 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.63 -.06%

• 2-Year Swap Spread 29.5 basis points +1.0 basis point
  

• TED Spread 36.75 basis points -4.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -63.5 basis points +3.25 basis points
  
• MBS  5/10 Treasury Spread  167.0 unch.
  
• iShares CMBS ETF 45.99 -.22%
• Avg. Auto ABS OAS .71 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.40 -.57%
• 3-Month T-Bill Yield 3.37% +2.0 basis points
  

• Yield Curve -39.5 basis points (2s/10s) +8.5 basis points
  

• China Iron Ore Spot 93.50 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 175.40 euros/megawatt-hour +8.31%

• Citi US Economic Surprise Index 7.50 +1.2 points

• Citi Eurozone Economic Surprise Index 2.8 +3.0 points
  

• Citi Emerging Markets Economic Surprise Index -3.9 +.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.25 -.11:  Growth Rate +15.8% unch., P/E 16.0 unch.
  
• Bloomberg US Financial Conditions Index -.96 +20.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.70% +42.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.21 -3.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 67.5%(+2.9 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 54.2%(+2.4 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(-.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 -50 open in Japan 
• China A50 Futures: Indicating +465 open in China

• DAX Futures: Indicating +92 open in Germany

Portfolio:

• Higher:  On gains in my tech/medical/commodity sector longs and index hedges
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure:  50% net long