Stocks Slightly Lower into Afternoon on US Policy-Induced Stagflation Fears, China Economy Worries, Technical Selling, Retail/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.0 -.46%
• DJIA Intraday % Swing .39% -32.6%
  
• Bloomberg Global Risk On/Risk Off Index 58.2 -3.0%

• Euro/Yen Carry Return Index 170.2 -.4%

• Emerging Markets Currency Volatility(VXY) 7.89 +.1%

• CBOE S&P 500 Implied Correlation Index 21.3 -.14% 

• ISE Sentiment Index 125.0 +9.0
  

• Total Put/Call .88 +6.0%

• NYSE Arms 1.66 +86.5% 
• NYSE Non-Block Money Flow -$252.86M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 62.38 +.62%
  

• US Energy High-Yield OAS 350.76 +1.1%
• Bloomberg TRACE # Distressed Bonds Traded 361 +9.0
  

• European Financial Sector CDS Index 76.73 +1.0% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 235.44 +.2%
  

• Italian/German 10Y Yld Spread 174.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 100.4 +2.7%
  

• Emerging Market CDS Index 185.5 -.17%
• Israel Sovereign CDS 114.17 -.36%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.48 +.35%

• 2-Year SOFR Swap Spread -19.75 basis points +.25 basis point
  

• TED Spread 24.5 basis points -4.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread 153.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 950.0 +3.0 basis points
  
• Avg. Auto ABS OAS 86.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.56 -.14%
• 3-Month T-Bill Yield 5.35% -3.0 basis points
  

• China Iron Ore Spot 129.0 USD/Metric Tonne -.04%
• Dutch TTF Nat Gas(European benchmark) 38.13 euros/megawatt-hour -4.9%

• Citi US Economic Surprise Index 14.3 -1.6 points

• Citi Eurozone Economic Surprise Index -13.9 +4.7 points

• Citi Emerging Markets Economic Surprise Index 24.5 +.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(492 of 500 reporting) +4.5% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 241.92 -.34:  Growth Rate +10.8% +1.4 percentage points, P/E 18.9 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.13% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +50.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 285.21 +.32: Growth Rate +33.8% +.2 percentage point, P/E 28.5 +.1
  
• Bloomberg US Financial Conditions Index .46 -6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .27 -2.0 basis points
  
• US Yield Curve -41.75 basis points (2s/10s) -4.5 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +1.19% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 56.5% -1.9 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.46% unch.: CPI YoY +3.04% unch.
  
• 10-Year TIPS Spread 2.20 -2.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 85.5%(-1.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 55.7%(+4.7 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +126 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating +32 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