Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, US Dollar Strength, Profit-Taking, Energy/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.7 +5.2%
• Bloomberg Global Risk On/Risk Off Index 2,822.0 -54.0 points

• Euro/Yen Carry Return Index 134.94 unch.

• Emerging Markets Currency Volatility(VXY) 8.9 +.2%

• S&P 500 Implied Correlation 50.9 -8.1%

• ISE Sentiment Index 133.0  +37.0 points
  

• Total Put/Call .77 +5.5%

• NYSE Arms .75 -36.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.23 +2.4%
  

• US Energy High-Yield OAS 382.25 +1.4%

• European Financial Sector CDS Index 56.16 +.68%

• Italian/German 10Y Yld Spread 118.0 +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 89.5 -3.6%
  

• Emerging Market CDS Index 179.66 +1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.43 +.47%

• 2-Year Swap Spread 23.0 +2.25 basis points
  

• TED Spread 10.25 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.5 -.75 basis point
  
• MBS  5/10 Treasury Spread  62.25 -2.25 basis points
  
• IHS Markit CMBX BBB- 6 72.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.92 -.66%
• 3-Month T-Bill Yield .05% +1.0 basis point
  

• Yield Curve 103.0 -2.0 basis points
  

• China Iron Ore Spot 88.40 USD/Metric Tonne +1.5%

• Citi US Economic Surprise Index 16.9 +12.0 points

• Citi Eurozone Economic Surprise Index -50.6 +.9 point
  

• Citi Emerging Markets Economic Surprise Index -21.3 -.4 point

• 10-Year TIPS Spread 2.70 +7.0 basis points
• 97.5% chance of no change at Jan. 26th meeting, 82.4% chance of no change at March 16th meeting

US Covid-19:

• 159 new infections/100K people(last 7 days total) +3/100K people
• 30% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +54 open in Japan 
• China A50 Futures: Indicating +9 open in China

• DAX Futures: Indicating -59 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure:  Moved to 50% Net Long