Stocks Modestly Lower into Final Hour on US Policy-Induced Stagflation Fears, Cold/Flu/Covid Seasonal Worries, Profit-Taking, Energy/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.0 +3.5%
• Bloomberg Global Risk On/Risk Off Index 3,150.0 -110.0 points

• Euro/Yen Carry Return Index 133.14 -.7%

• Emerging Markets Currency Volatility(VXY) 9.4 +.3%

• S&P 500 Implied Correlation 50.0 +4.7%

• ISE Sentiment Index 119.0  +4.0 points
  

• Total Put/Call .78 -1.3%

• NYSE Arms .95 -24.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.98 +.74%
  

• US Energy High-Yield OAS 385.57 +1.2%

• European Financial Sector CDS Index 57.50 +.66%

• Italian/German 10Y Yld Spread 122.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 88.75 +.3%
  

• Emerging Market CDS Index 184.4 +1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 33.11 -.38%

• 2-Year Swap Spread 24.5 -.25 basis point
  

• TED Spread 12.0 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.0 +1.25 basis points
  
• MBS  5/10 Treasury Spread  64.0 +.75 basis point
  
• IHS Markit CMBX BBB- 6 73.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 56.72 -.61%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 111.0 +2.0 basis points
  

• China Iron Ore Spot 88.30 USD/Metric Tonne +1.2%

• Citi US Economic Surprise Index 25.6 +1.4 points

• Citi Eurozone Economic Surprise Index -48.9 -4.1 points
  

• Citi Emerging Markets Economic Surprise Index -18.4 +1.3 points

• 10-Year TIPS Spread 2.71 -3.0 basis points
• 96.4% chance of no change at Jan. 26th meeting, 81.8% chance of no change at March 16th meeting

US Covid-19:

• 186 new infections/100K people(last 7 days total) +1/100K people
• 35% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -153 open in Japan 
• China A50 Futures: Indicating -44 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, took some profits in my commodity longs
  

• Market Exposure:  Moved to 75% Net Long