Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Global Virus Mandate/Lockdown Worries, Dollar Strength, Consumer Discretionary/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line:  Substantially Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 20.6 +9.8%
• Bloomberg Global Risk On/Risk Off Index 3,400.0 -38.0 points

• Euro/Yen Carry Return Index 134.40 -.65%

• Emerging Markets Currency Volatility(VXY) 10.4 +.2%

• CBOE S&P 500 Implied Correlation Index 31.7 +2.9% 

• ISE Sentiment Index 91.0  -9.0 points
  

• Total Put/Call 1.03 +8.4%

• NYSE Arms .73 +17.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.98 +.88%
  

• US Energy High-Yield OAS 391.28 +.81%

• European Financial Sector CDS Index 59.66 +1.9%

• Italian/German 10Y Yld Spread 132.0 -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 80.68 +1.42%
  

• Emerging Market CDS Index 198.44 +1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.59 -.17%

• 2-Year Swap Spread 20.75 +1.25 basis points
  

• TED Spread 14.5 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap 2.0 unch.
  
• MBS  5/10 Treasury Spread  79.5 +6.25 basis points
  
• IHS Markit CMBX BBB- 6 72.25 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.63 -.08%
• 3-Month T-Bill Yield .09% unch.
  

• Yield Curve 84.75 unch.
  

• China Iron Ore Spot 125.50 USD/Metric Tonne -.3%

• Citi US Economic Surprise Index 5.1 +1.5 points

• Citi Eurozone Economic Surprise Index 40.4 -.1 point
  

• Citi Emerging Markets Economic Surprise Index 3.3 -.3 points

• 10-Year TIPS Spread 2.51 unch.
  
• 23.9%(-.3 basis point) chance of no change at March 16th FOMC meeting, 14.4%(-1.3 percentage points) chance of no change at May 4th meeting

US Covid-19:

• 1,501 new infections/100K people(last 7 days total) at new record high +232/100K people
• New Covid-19 patient hospital admissions per 100K population at new record high +32.7% from prior 7-day avg. of 12/26/21 - 1/1/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -323 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +59 open in Germany

Portfolio:

• Slightly Lower: On losses in my transport/industrial/tech/medical/consumer discretionary sector longs

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure:  50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.6%

Sector Underperformers:

• 1) Alt Energy -3.4% 2) Gambling -3.3% 3) Retail -2.4%

Stocks Falling on Unusual Volume: 

• PRCH, CRWD, CIO, NVCR, CUBI, BF/B, FDX, BILL, MRVL, ACRS, FRPT, FIVE, TMUS, VURL, RH, COST, ABMD, NVTA, CMG, CVNA, TWST, SNOW, BBWI, SMPL, BEAM, IIPR, CROX, EXAS, SIVB, EXEL, HOOD, AYI, DXCM, EWCZ, NKE, RCM, PACB, DISCA, CWAN, MTN, FUBO, NTRA, IOT, PRFT, SMAR, ITCI, GBX, CAH, WOOF, MASS, AOSL, WRBY, ASO, CNMD, ADPT, TLYS, LWLG, GME, BOOT, OSH, MRTX, TSP, ONEM, CELH, ALLO, AMN, INGN, IOVA, TTWO, SKIN, SRPT and CTRN
  

Stocks With Unusual Put Option Activity:

• 1) ZNGA 2) TTWO 3) IWP 4) LQD 5) XHB
  

Stocks With Most Negative News Mentions:

• 1) CURV 2) OWLT 3) NKE 4) LVS 5) XPEV
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -.8%

Sector Outperformers:

• 1) Gold & Silver +.8% 2) Social Media -.3% 3) Social Media -.3%

Stocks Rising on Unusual Volume:

• APR, IRTC, BCRX, CDNA, TMCI, ATEC, MRNA, NVRO, FIGS, THRM, PTCT, HQY, ATRC, NSTG, SWAV, HUM, RPRX, CLH, BMY and GH
  

Stocks With Unusual Call Option Activity:

• 1) AFL 2) DBRG 3) ZNGA 4) KBH 5) TTWO

Stocks With Most Positive News Mentions:

• 1) APR 2) OFIX 3) KIDS 4) JYNT 5) LOCO
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +17.3% Above 100-Day Average 
• 0 Sectors Rising, 11 Sectors Declining
• 20.7% of Issues Advancing, 76.1% Declining
• 75 New 52-Week Highs, 173 New Lows
• 53.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.7% 
• Bloomberg Global Risk-On/Risk-Off Index 3,234.0 -211.0 points
• Russell 1000: Growth/Value 16,941 -1.4%
  
• Vix 22.2 +18.4%
• Total Put/Call 1.0 +8.4%
• TRIN/Arms 1.0 +64.5%

Monday Watch

Today's Headlines

Bloomberg:

• U.K. Minister Urges Cut in Isolation Times Amid Staff Shortages.  
• Hong Kong Economy to be Hit by Omicron Wave, Finance Chief Says.    
• Europe Fears Economic Hit If Russia Is Sanctioned Heavily.  
• Stocks Seen Steady With Bond Volatility in Focus: Markets Wrap.
  
• Surging Competition Forces Asia Plastics Makers to Stifle Output.  
• Facebook’s Meta Expands in Texas With Major Office Lease.
• Bond Rout That Kicked Off 2022 Lights Fuse for Europe Volatility.
• Fed Unites Left and Right in Warning It’s Behind Inflation Curve.  
• Omicron Absenteeism Poses Fresh Test to U.S. Economic Strength.  
• Trump Ally Johnson Seeks Wisconsin Re-Election as GOP Aims for Majority.  
• Oil Rides Into 2022 on Bullish Wave as Demand Fears Fade.  
• Robot Trucks Get U.S. Tests, Raising Self-Driving Safety Stakes.
• Apple Could Reinvent Money Management, Take on PayPal and Robinhood.

Wall Street Journal:

• Stocks Face Next Test as Earnings Season Approaches.
• Bond Selloff Rattles Markets.
• Omicron Makes Biden’s Vaccine Mandates Obsolete. There is no evidence so far that vaccines are reducing infections from the fast-spreading variant.
• Labs Limit Covid-19 Test Access as Demand Soars.
• Supply-Chain Issues Leave New Homes Unfinished.
• Detroit Makes Its Move in Electric-Vehicle Race.
• In the Race for Batteries, One Scientist Has Seen It All.
• Meatpackers Are Biden’s Latest Inflation Scapegoat. He cries ‘gouging’ as they face higher costs for labor, fuel and feed.
• U.S. to Spend $10 Billion to Boost Small Businesses.
• PC Slowdown Sets a New Battleground for Chip Makers.
• Taliban Detain Prominent Critic, Intensifying Crackdown on Dissent. 
• Europe Energy Crisis Goes Global. To see climate politics turn really crazy, add fuel shortages and high prices.

Fox News:     

• Termination of unvaccinated health care workers backfires as Biden pledges help amid COVID surge
• Blue state allows hospitals to force COVID-positive employees to work amid brutal staffing shortage
• Weeks after Minnesota nurses warn of staffing crisis, Mayo Clinic fires 700 unvaccinated workers.
  
• Unvaccinated Rhode Island nurses slam new hospital policy: ‘We’ve abandoned common sense’.
• Ohio governor mobilizes 1,050 National Guard troops to ease hospital staff shortages amid COVID-19 surge.
• 'Squad' member tests positive days after partying it up MASKLESS in Florida while omicron soared.

CNBC:

• Wall Street’s top analysts like these stocks for the long term as a new year begins. 
• 19 dead, including 9 children, in devastating New York City apartment fire.

Zero Hedge: 

• The Hunter Connection? Kazakh Security Chief Arrested For Treason Was "Close Friends" With Bidens.
• Almost Half Of New York COVID-19 Hospitalizations Not Due To COVID-19.
• Beijing Steps Up Efforts To Contain Housing Risks.
• Morgan Stanley: Central Banks Are Increasingly Comfortable Pushing A More Hawkish Line... Until Something Pushes Back.
• DOJ Refuses To Withdraw Memo Activating FBI Counterterrorism Division Against School Parents.
• Hedge Fund CIO: We Are Headed Toward A Catastrophic Political Collision - It's So Obvious But Few People Want To Admit It.
• CDC Director Sheepishly Admits Justice Sotomayor Issued COVID Misinformation On Hospitalized Kids.
• Is Going Green Really Worth It?
• Biden Admin Cuts Florida's Weekly Monoclonal Shipment In Half.
• Are We Really Expected To Believe This China COVID Data?
• Taliban Threatened US With 2,000 Suicide Bombers In Washington D.C.
• "I Do Not Want To Have A Vaccination": NHS Doctor Tells UK Health Secretary On Camera.
• Why The Kazakhstan Crisis Is A Much Bigger Deal Than Western Media Is Letting On.
• Dems Panic Over Teachers' Union Push For Remote Learning As Yet Another Study Shows Academic Suffering.
• Sunday Collum: 2021 Year In Review, Part 2 - Heart Of Darkness & The Rise Of Centralized Healthcare.
• The Economic Winners And Losers Of The Pandemic.
• Edible Oil Prices Hit Record High As Food Inflation Worries Persist.
• UK Scientist Says Omicron Is "Ray Of Light" That Could Help Transform COVID Into Common Cold.
• Kazakh Chaos On Cue Ahead Of Crunch US-Russia Security Negotiations.
• Despotism Is The New Normal: Looming Threats To Freedom In 2022.
• Iowa Nursing Home Operator Forced Into Bankruptcy By "Crippling" Staff Shortages.

NewsMax:

• Graham: US Under Democrats Facing 'Most Dangerous Times Since the Late '30s'. 
• NY Post: Pelosi Made Up to $30 Million on Insider Stock Trades.  
• Attorney Lou Gelormino: Vax Mandates Will Be Exposed 'as an Overreach' .

TheGatewayPundit.com:

• REPORT: People Are Dying In the Hallways and Waiting Room At St. Joseph’s Hospital in Tucson, AZ Due To Staffing Shortages Caused By COVID Restrictions (AUDIO).
• Boston Marathon Terrorist Received $1,400 Covid Check While Incarcerated Thanks to Biden’s Stimulus Bill – Media Fact Checkers Forced to Eat Their Words. 
• WATCH: CNN Hosts Blitzer, Tapper, and Cooper Run Away When Confronted by Project Veritas Over Producers Accused of Child Sex Crimes (VIDEO). 
• CDC Website Reveals Police Power Will be Used at Quarantine Stations for the “Benefit of Society”. 
• Michelle Obama Fires Off Urgent Message About This Year’s Midterm Elections, Vows to Deploy Thousands of Lawyers to ‘Protect American Voters’.
• Bill Filed In Washington Would Authorize ‘Strike Force’ To ‘Involuntarily Detain’ Unvaccinated Families: ‘They Have Already Set Up The Internment Camps’.
• Appalling… Joe Biden on Rising Car Prices: “You Reduce the Demand for Cars by Making Americans Poorer” (VIDEO).
• LOUDER: El Salvador Launches New Ad Campaign Promoting Healthy Lifestyle to Prevent COVID-19 Deaths and Hospitalizations.
• TRAGIC: New Pentagon Data Reveals The Number of Military Members Who Committed Suicide From Just July-September Soared.
• Wisconsin State Senator Who Criticized Constituents Wanting Election Audit in State Won’t Seek Reelection …(She Knows She’d Be Primaried Out).
• Young Adults Are Being Lied to by Groups Like Antifa Who Are Using Them for Radical Anti-American Efforts. 
• “Every Shot, I Can’t Breathe” – Fully Vaccinated Tennis Star Nikoloz Basilashivili Drops Out of Sydney Cup Due to Breathing Difficulties (MUST-SEE VIDEO).
• James O’Keefe: Explosive Never Before Seen Whistleblower Documents Coming Next Week on Dr. Fauci – STAY TUNED.

The Epoch Times:

• Chinese State Media Uses Times Square Screen to Play Xinjiang Propaganda.
• China Perfecting Its Social Media Disinformation Operations to Influence Americans: Analyst.
  

Twitter:

• @f_philippot -  At least 100,000 people take to the streets of #France in #protest against #VaccinePassports and restrictions. (video)
  

GETTR: 

• @DiscloseTV - JUST IN - Qatar, host country of the 2022 FIFA World Cup, reported 3,487 new "COVID-19 cases," outpacing a previous high of 2,355 seen in May 2020. 86.5% of the 2.8M population is fully vaccinated.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 715,856 Reports(+6,773 from prior week) Through December 31, 2021.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading

• Asian indices are -1.0% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 80.0 +.75 basis point.
• China Sovereign CDS 42.5 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 53.71 +.07%.
• Bloomberg Global Risk-On/Risk Off Index 3,437.0 -1.0 point.
• Volatility Index(VIX) futures 22.4 +1.5%. 
• Euro Stoxx 50 futures +.07%.
• S&P 500 futures -.22%.
• NASDAQ 100 futures -.08%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AZZ)/.82
• (CMC)/1.19
• (TLRY)/-.07
  

After the Close:

• (ACCD)/-.64
  

Economic Releases

10:00 am EST

• Wholesale Trade Sales MoM for Nov.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Inflation Data report, Needham Growth Conference, Jefferies Software Summit and the JPMorgan Healthcare Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly lower, weighed down by consumer and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• N.Y. Breaks Covid Case Record as Total Infections Pass 4 Million.
• Bitcoin’s Swoon Deepens as Bears Begin to Test $40,000 Threshold.
  
• PayPal Explores Launch of Own Stablecoin in Crypto Push.
  
• Crypto ‘Winter’ Slows Volume on Some of the Biggest Exchanges.
• U.S. Inflation Rate Is Probably Going to Spike Again: Eco Week.  
• Veteran Equity Strategist Expects a ‘Cathartic Upchuck’ in 2022.  
• Risk Bubbles Are Deflating Everywhere, Some Market Watchers Say.  
• New York Port Hustles to Cut Rare Logjam Amid Covid Labor Woes.  
• Charting the Global Economy: Jobless Rate in U.S. Falls Below 4%.  
• Treasury Market’s Brutal New Year Conjures Return of 2% Yields.  
• Energy Transition Is Upside Risk to ECB Forecasts, Schnabel Says.

Wall Street Journal:

• For Winsome Sears, Education Is the Key to Black Success. America hasn’t always been perfect, says Virginia’s lieutenant governor-elect, but it isn’t 1963 anymore.
• Studies Help Show Why Omicron Is Mild, Spreads Fast.
• U.S. to Spend $10 Billion to Boost Small Businesses.
• Rocket Grew Into America’s Biggest Mortgage Lender, but Now Comes the Hard Part.
• Facebook’s Former Elections Boss Questions Social Media in Politics.
• For Dying Towns, the Pandemic Offers Challenges—and Hope.
• The Worker Supply Bottleneck. The labor market is tightening faster than the Federal Reserve expected.
• Why Apple’s iMessage Is Winning: Teens Dread the Green Text Bubble.
• The End of Car Keys, Passwords and Fumbling With Your Phone at Checkout.
• 12 Ways to Tame Your Family’s Screen Time in 2022.
• China’s Unpredictable, Heavy-Handed Governance Threatens Growth. The country lacks the right policy tools to meet Xi Jinping’s vastly expanded goals as centralized power roils decision making.

Barron's:

• Had bullish commentary on Commodities, (PTRA), (MGM) and (BIIB).
  

Fox News: 

• Failing our children: Parents who lost kids to suicide during pandemic speak out on 'The Story'.
• America loses far more service members to suicide than COVID as Biden boots those who refuse vaccine.
• Teen suicide attempts spiked during COVID-19 lockdowns: CDC. 

CNBC:

• Taking a driverless Waymo in Phoenix over the holidays was fun but unsettling.
• Inflation, rising rates and the Federal Reserve could whip stocks around in the week ahead.
• How A.I. is set to evolve in 2022.
• Manchin’s $1.8 trillion spending offer is reportedly no longer on the table.
• Sports teams are investing $10 billion in stadiums by 2030 — here’s how they’ll be different.
• Inflation will be the big market theme this year, two ETF experts agree. Here’s one way to play it.
• Citigroup will terminate unvaccinated workers by Jan. 31, a first among Wall Street banks.

Zero Hedge:

• Queen Refuses To Pay For Prince Andrew's Pedo Defense, Forcing Him To Unload Chalet In Fire Sale.
• UK Gov't Admits Evidence For Face Masks Stopping COVID Spread In Schools "Not Conclusive".
• Mom Sentenced To 3 Months In Federal Prison For Bringing 14-Year-Old Son To J6.
• Chicago Parents Sue Teachers Union Over Refusal To Educate In-Person.
• Elon Musk Says Price Of Full Self Driving Will Rise To $12,000 This Month.
• FAA Will Impose Flight Restrictions On Some Flight Operations Over 5G.
• Top Lawyer Arguing Against Biden Vax Mandates Before SCOTUS Has COVID Despite Being Boosted.
• Omicron Could End Up Being Less Deadly Than Seasonal Flu; New US Study Finds.
• Get The Courts Out Of Science.
• Djokovic Reveals He Was Given Exemption To Enter Australia Because Of Recent Covid Infection.
• Moderna CEO Scrambles To Sell More Boosters As Omicron Wave Shows Signs Of Waning.
• Why This Time Is Different (And Not In A Good Way For Powell).
• Rickards Exposes Globalism's Achilles' Heel.
• British Military Deploys 200 People To London Hospitals As Staffing Shortages Bite.
• Is There A Way To Prevent Psychopaths From Getting Into Positions Of Power?
• National Tire Shortage Emerges As Snowstorms Pound US.
• Buchanan: Russia Is Not The Great Rival; China Is.
• Maxwell May Get A Second Trial, But What About The Rest Of Epstein's "Significant Others"?

NewsMax: 

• Rep. Lauren Boebert: Fact Checkers Are 'Left's Thought Police'.

TheGatewayPundit.com:

• HERE IT IS: New York Finally Releases its First Breakdown of People Hospitalized FOR Covid vs. People Hospitalized WITH Covid. 
• Manchin’s Approval Soars As He Stands Against Biden.
• Qatar: Another Young Soccer Star Collapses on Field, Suffers Heart Attack (VIDEO).
• Tragic: 14-Year-Old Israeli American Girl Suffers and Dies from COVID Vaccine – Makes a Video of Her Story Five Days Before Her Death.
• SHOCKING EXCLUSIVE: Georgia’s Republican Governor Kemp Should Be Disqualified from Ever Running for Office Again.
• YouTube Pulls ‘Five For Fighting’ Music Video Exposing Tragedy Of Biden’s Afghanistan Surrender.
• Triple Vaccinated Swiss Olympic Athlete Fabienne Schlumpf Diagnosed with Myocarditis – May Never be Able to Compete Again.
• Australian Regime Kidnaps Second Professional Tennis Player This Month.
• “I’m Grateful” – Career Criminal With 32 Prior Arrests Praises New York’s Bail Reform Law.
• Biden’s 3.9% Unemployment Is a Farce – Workers Needed All Over Because Government Paying Them More to Stay Home.
• Air Force Rejects Medical Exemption for Experimental COVID Vaccine – Will Force Woman Allergic to Ingredient to Take the Vaccine Anyway.
• Biden’s Policies Are Going To Make The Situation At The Southern Border Even Worse In 2022.
• JUST IN: Trump’s TRUTH Social Sets Official Launch Date – Stock Prices SOAR by 20% After Reveal As Anticipation Mounts For the Free Speech Alternative.

The Epoch Times:

• Chinese State Media Uses Times Square Screen to Play Xinjiang Propaganda.
• Dying Patients Being Denied Care in Locked-Down Xi’an Sparks Outrage.

Twitter:

• @LandoFree - Massive nighttime vaccine mandate/green pass protests in Paris, France. (video)
  

GETTR:

• @DiscloseTV - Now - Large protest in #Paris following President Macron's humiliating remarks against unvaccinated citizens. (video)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 715,856 Reports(+6,773 from prior week) Through December 31, 2021. 

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).