Stocks Lower Mid-Day on US Policy-Induced Stagflation Fears, Fed Taper Pace Worries, China Bubble-Bursting Concerns, Consumer Discretionary/Commodity 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) 23.1 +5.6%
• Bloomberg Global Risk On/Risk Off Index 2,330.0 -97.0 points

• Euro/Yen Carry Return Index 132.11 +.08%

• Emerging Markets Currency Volatility(VXY) 10.7 unch.

• CBOE S&P 500 Implied Correlation Index 36.8 +4.8% 

• ISE Sentiment Index 144.0  +24.0 points
  

• Total Put/Call .98 +2.1%

• NYSE Arms 1.6 +158.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.83 -.24%
  

• US Energy High-Yield OAS 421.77 -.30%

• European Financial Sector CDS Index 58.79 -2.2%

• Italian/German 10Y Yld Spread 128.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 84.6 -.01%
  

• Emerging Market CDS Index 199.17 +1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.96 -.63%

• 2-Year Swap Spread 20.5 +1.0 basis point
  

• TED Spread 15.75 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 -.5 basis point
  
• MBS  5/10 Treasury Spread  71.5 unch.
  
• IHS Markit CMBX BBB- 6 72.0 -.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.40 -.86%
• 3-Month T-Bill Yield .05% +1.0 basis point
  

• Yield Curve 78.0 +.25 basis point
  

• China Iron Ore Spot 112.90 USD/Metric Tonne -.6%

• Citi US Economic Surprise Index 31.0 +.3 point

• Citi Eurozone Economic Surprise Index 11.5 +1.2 points
  

• Citi Emerging Markets Economic Surprise Index -13.6 -1.6 points

• 10-Year TIPS Spread 2.40 unch.
• 89.5%(-2.4 percentage points) chance of no change at Jan. 26th meeting, 65.2%(-1.8 percentage points) chance of no change at March 16th meeting

US Covid-19:

• 261 new infections/100K people(last 7 days total) +0/100K people
• 49% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +61 open in Japan 
• China A50 Futures: Indicating -81 open in China

• DAX Futures: Indicating +10 open in Germany

Portfolio:

• Slightly Higher: On gains in my transport sector longs, index hedges and emerging market shorts
  

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

• Market Exposure:  Moved to 25% Net Long