Stocks Reversing Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Dollar Strength, Energy/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.2 -3.4%
• DJIA Intraday % Swing .59%
  
• Bloomberg Global Risk On/Risk Off Index 62.9 +.3%

• Euro/Yen Carry Return Index 149.9 -.3%

• Emerging Markets Currency Volatility(VXY) 10.6 -3.1%

• CBOE S&P 500 Implied Correlation Index 34.6 -2.8% 

• ISE Sentiment Index 103.0 -2.0 points
  

• Total Put/Call .97 -5.8%

• NYSE Arms 1.01 -28.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.45 -.35%
  

• US Energy High-Yield OAS 359.72 -1.34%
• Bloomberg TRACE # Distressed Bonds Traded 294.0 +3
  

• European Financial Sector CDS Index 88.3 +.21% 
• Credit Suisse Subordinated 5Y Credit Default Swap 403.4 +.1%
  

• Italian/German 10Y Yld Spread 183.0 basis basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 115.8 -1.1%
  

• Emerging Market CDS Index 239.0 -.12%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.2 +.03%

• 2-Year Swap Spread 36.0 basis points +1.0 basis point
  

• TED Spread 16.5 basis points -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -9.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  148.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 525.0 +9.0 basis points
  
• Avg. Auto ABS OAS 60.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.4 -.09%
• 3-Month T-Bill Yield 4.80% +3.0 basis points
  

• China Iron Ore Spot 124.6 USD/Metric Tonne +.4%
• Dutch TTF Nat Gas(European benchmark) 46.7 euros/megawatt-hour -1.6%

• Citi US Economic Surprise Index 38.6 -1.8 points

• Citi Eurozone Economic Surprise Index 61.8 +1.3 points
  

• Citi Emerging Markets Economic Surprise Index 2.4 +.2 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.8 +.73:  Growth Rate +1.1% +.4 percentage point, P/E 17.7 -.1
• S&P 500 Current Year Estimated Profit Margin 12.37% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .19 -2.0 basis points
  
• Yield Curve -88.25 basis points (2s/10s) -1.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.80% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.21% -2.0 basis points
  
• 10-Year TIPS Spread 2.42 +5.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 73.2%(+2.0 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 59.6%(+3.1 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 -1 open in Japan 
• China A50 Futures: Indicating -4 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long