Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Less Dovish Fedspeak, Dollar Strength, Commodity/Road & Rail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.1 -3.3%
• DJIA Intraday % Swing .55%
  
• Bloomberg Global Risk On/Risk Off Index 60.8 +.44%

• Euro/Yen Carry Return Index 148.90 -.4%

• Emerging Markets Currency Volatility(VXY) 10.8 +.4%

• CBOE S&P 500 Implied Correlation Index 37.3 -2.0% 

• ISE Sentiment Index 133.0 +47.0 points
  

• Total Put/Call 1.0 -3.9%

• NYSE Arms 1.08 +3.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.12 -.41%
  

• US Energy High-Yield OAS 388.99 +.15%
• Bloomberg TRACE # Distressed Bonds Traded 303.0 -10.0
  

• European Financial Sector CDS Index 90.17 -.24% 
• Credit Suisse Subordinated 5Y Credit Default Swap 410.51 +2.6%
  

• Italian/German 10Y Yld Spread 194.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 121.9 +2.0%
  

• Emerging Market CDS Index 242.98 -1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.09 +.02%

• 2-Year Swap Spread 33.5 basis points +2.0 basis points
  

• TED Spread 9.25 basis points -2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -6.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread  146.0 -8.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 514.0 +9.0 basis points
  
• Avg. Auto ABS OAS 60.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.59 +.06%
• 3-Month T-Bill Yield 4.80% unch.
  

• China Iron Ore Spot 131.2 USD/Metric Tonne +.9%
• Dutch TTF Nat Gas(European benchmark) 50.6 euros/megawatt-hour +4.2%

• Citi US Economic Surprise Index 32.6 -.1 point

• Citi Eurozone Economic Surprise Index 67.6 -12.2 points
  

• Citi Emerging Markets Economic Surprise Index 4.1 +1.0 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.06 -.01:  Growth Rate +.2% unch., P/E 17.9 unch.
• S&P 500 Current Year Estimated Profit Margin 12.40% -2.0 basis points
  
• Bloomberg US Financial Conditions Index .18 -6.0 basis points
  
• Yield Curve -77.25 basis points (2s/10s) +1.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.50% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.23% -1.0 basis point
  
• 10-Year TIPS Spread 2.42 -1.0 basis point
  
• Highest target rate probability for May 3rd FOMC meeting: 72.2%(-3.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 56.9%(-1.4 percentage points) chance of 5.25%-5.5%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(-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 -83.3%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -40 open in Japan 
• China A50 Futures: Indicating -46 open in China

• DAX Futures: Indicating +37 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/tech sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure: 25% Net Long