Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Technical Selling, Profit-Taking, Financial/Alt Energy 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) 18.3 +6.0%
• Bloomberg Global Risk On/Risk Off Index 3,762.0 -334.0 points

• Euro/Yen Carry Return Index 134.89 -.29%

• Emerging Markets Currency Volatility(VXY) 8.92 unch.

• S&P 500 Implied Correlation 49.0 +1.7%

• ISE Sentiment Index 94.0  -63.0 points
  

• Total Put/Call .70 +6.1%

• NYSE Arms 1.2 +24.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.23 +1.55%
  

• US Energy High-Yield OAS 378.46 -.06%

• European Financial Sector CDS Index 55.77 +2.3%

• Italian/German 10Y Yld Spread 114.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 92.87 +2.2%
  

• Emerging Market CDS Index 176.45 +.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.32 -.80%

• 2-Year Swap Spread 20.75 +1.25 basis points
  

• TED Spread 10.5 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.75 -1.25 basis points
  
• MBS  5/10 Treasury Spread  64.5 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 72.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.30 +.15%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 105.0 unch.
  

• China Iron Ore Spot 86.60 USD/Metric Tonne -5.1%

• Citi US Economic Surprise Index 4.9 +1.1 points

• Citi Eurozone Economic Surprise Index -51.5 +5.1 points
  

• Citi Emerging Markets Economic Surprise Index -20.9 +1.0 points

• 10-Year TIPS Spread 2.63 +2.0 basis points
• 100.0% chance of no change at Jan. 26th meeting, 88.4% chance of no change at March 16th meeting

US Covid-19:

• 156 new infections/100K people(last 7 days total) +1/100K people
• 29% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +5 open in Japan 
• China A50 Futures: Indicating -58 open in China

• DAX Futures: Indicating -13 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/medical sector longs
  

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

• Market Exposure:  Moved to 75% Net Long