Stocks Finish Slightly Lower on US Policy-Induced Stagflation Fears, China Economy Concerns, Technical Selling, Alt Energy/Road & Rail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.8 +2.4%
• DJIA Intraday % Swing .37% +30.0%
  
• Bloomberg Global Risk On/Risk Off Index 65.5 -2.8%

• Euro/Yen Carry Return Index 174.3 -.43%

• Emerging Markets Currency Volatility(VXY) 7.7 +.26%

• CBOE S&P 500 Implied Correlation Index 19.9 +3.6% 

• ISE Sentiment Index 127.0 +1.0
  

• Total Put/Call 1.02 -8.9%

• NYSE Arms 1.42 +65.1% 
• NYSE Non-Block Money Flow -$138.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 63.8 +1.4%
  

• US Energy High-Yield OAS 340.81 +2.2%
• Bloomberg TRACE # Distressed Bonds Traded 328 -38
  

• European Financial Sector CDS Index 80.4 +1.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 246.0 +1.3%
  

• Italian/German 10Y Yld Spread 174.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 99.3 -4.7%
  

• Emerging Market CDS Index 189.1 -.62%
• Israel Sovereign CDS 119.3 +2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.51 unch.

• 2-Year SOFR Swap Spread -18.75 basis points +.25 basis point
  

• TED Spread 25.5 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 -.5 basis point
  
• MBS  5/10 Treasury Spread 157.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 938.0 unch.
  
• Avg. Auto ABS OAS 92.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.82 +.15%
• 3-Month T-Bill Yield 5.40% +1.0 basis point
  

• China Iron Ore Spot 131.4 USD/Metric Tonne -.97%
• Dutch TTF Nat Gas(European benchmark) 43.98 euros/megawatt-hour -5.7%

• Citi US Economic Surprise Index 30.20 -2.9 points

• Citi Eurozone Economic Surprise Index -18.70 +4.1 points

• Citi Emerging Markets Economic Surprise Index 22.7 -.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(482 of 500 reporting) +4.3% +1.7 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 242.06 +1.02:  Growth Rate +9.4% +.3 percentage point, P/E 18.8 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.15% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +50.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 282.78 unch.: Growth Rate +32.9% unch., P/E 29.4 unch.
  
• Bloomberg US Financial Conditions Index .47 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .38 +2.0 basis points
  
• US Yield Curve -50.25 basis points (2s/10s) -1.5 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.10% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 46.9% unch.

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.07% unch.
  
• 10-Year TIPS Spread 2.23 -1.0 basis point
  
• Highest target rate probability for Jan. 31st FOMC meeting: 88.8%(+1.2 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 67.0%(-2.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +67 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating +50 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long