Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed Taper Pace Worries, Global Virus Lockdown Concerns, Tech/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) 22.6 +11.2%
• Bloomberg Global Risk On/Risk Off Index 2,379.0 -167.0 points

• Euro/Yen Carry Return Index 132.03 -.04%

• Emerging Markets Currency Volatility(VXY) 10.7 -.4%

• CBOE S&P 500 Implied Correlation Index 35.9 +9.4% 

• ISE Sentiment Index 126.0  +22.0 points
  

• Total Put/Call .95 -2.1%

• NYSE Arms .61 -54.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.44 +1.9%
  

• US Energy High-Yield OAS 423.0 +1.6%

• European Financial Sector CDS Index 60.10 +.22%

• Italian/German 10Y Yld Spread 130.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 84.4 +.88%
  

• Emerging Market CDS Index 195.17 +1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 33.19 -.02%

• 2-Year Swap Spread 19.5 -1.25 basis points
  

• TED Spread 15.75 +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.0 +.75 basis point
  
• MBS  5/10 Treasury Spread  71.5 -.25 basis point
  
• IHS Markit CMBX BBB- 6 72.25 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.83 -1.14%
• 3-Month T-Bill Yield .04% -1.0 basis point
  

• Yield Curve 77.75 -4.5 basis points
  

• China Iron Ore Spot 114.0 USD/Metric Tonne -.2%

• Citi US Economic Surprise Index 30.7 -1.8 points

• Citi Eurozone Economic Surprise Index 10.3 +1.7 points
  

• Citi Emerging Markets Economic Surprise Index -12.0 -1.6 points

• 10-Year TIPS Spread 2.40 -4.0 basis points
• 91.9%(+2.1 percentage points) chance of no change at Jan. 26th meeting, 67.0%(+1.6 percentage points) chance of no change at March 16th meeting

US Covid-19:

• 261 new infections/100K people(last 7 days total) +3/100K people
• 49% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -112 open in Japan 
• China A50 Futures: Indicating -23 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts
  

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

• Market Exposure:  Moved to 25% Net Long