Stocks Falling Substantially into Final Hour on Less Dovish Fed Commentary, Virus Lockdown Worries, US Policy-Induced Stagflation Fears, Consumer Discretionary/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume: Heavy 

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 26.4 +15.0%
• Bloomberg Global Risk On/Risk Off Index 2,045.0 -460.0 points

• Euro/Yen Carry Return Index 131.98 -.14%

• Emerging Markets Currency Volatility(VXY) 10.8 +.6%

• S&P 500 Implied Correlation 49.1 n/a

• ISE Sentiment Index 108.0  -15.0 points
  

• Total Put/Call .93 +4.5%

• NYSE Arms 1.72 +42.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.8 +4.6%
  

• US Energy High-Yield OAS 436.52 +2.9%

• European Financial Sector CDS Index 67.49 +3.0%

• Italian/German 10Y Yld Spread 131.0 +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 93.4 +1.0%
  

• Emerging Market CDS Index 213.91 +1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.96 +.27%

• 2-Year Swap Spread 25.0 +1.5 basis points
  

• TED Spread 13.0 -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -33.25 -.75 basis point
  
• MBS  5/10 Treasury Spread  69.75 +2.25 basis points
  
• IHS Markit CMBX BBB- 6 73.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.75 -.42%
• 3-Month T-Bill Yield .05% +1.0 basis point
  

• Yield Curve 100.0 +1.0 basis point
  

• China Iron Ore Spot 101.95 USD/Metric Tonne -1.2%

• Citi US Economic Surprise Index 22.5 -3.4 points

• Citi Eurozone Economic Surprise Index 4.0 +15.9 points
  

• Citi Emerging Markets Economic Surprise Index -9.3 +4.4 points

• 10-Year TIPS Spread 2.51 -5.0 basis points
• 97.5%(unch.) chance of no change at Jan. 26th meeting, 75.1%(-7.3 percentage points) chance of no change at March 16th meeting

US Covid-19:

• 171 new infections/100K people(last 7 days total) +14/100K people
• 32% of Jan. 7th, 2021 peak(highest daily avg. new infections) +2.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -136 open in Japan 
• China A50 Futures: Indicating +17 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 50% Net Long