Stocks Reversing Substantially Lower into Final Hour on US Policy-Induced Stagflation Fears, Global Virus Lockdown Worries, Less Dovish Fed Commentary, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 34.0 +21.5%
• Bloomberg Global Risk On/Risk Off Index 1,410.0 -526.0 points

• Euro/Yen Carry Return Index 131.52 -.24%

• Emerging Markets Currency Volatility(VXY) 11.4 +3.1%

• CBOE S&P 500 Implied Correlation Index 43.4 +17.0% 

• ISE Sentiment Index 107.0  -6.0 points
  

• Total Put/Call 1.10 +2.8%

• NYSE Arms 1.16 +163.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 58.80 +2.2%
  

• US Energy High-Yield OAS 428.69 -.16%

• European Financial Sector CDS Index 66.86 +1.0%

• Italian/German 10Y Yld Spread 130.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 93.0 -1.66%
  

• Emerging Market CDS Index 210.20 +1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.79 -.20%

• 2-Year Swap Spread 22.75 -.25 basis point
  

• TED Spread 13.75 +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 +12.0 basis points
  
• MBS  5/10 Treasury Spread  75.0 -.25 basis point
  
• IHS Markit CMBX BBB- 6 72.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.38 -.29%
• 3-Month T-Bill Yield .04% -1.0 basis point
  

• Yield Curve 81.0 -4.25 basis points
  

• China Iron Ore Spot 103.30 USD/Metric Tonne +.05%

• Citi US Economic Surprise Index 33.6 +15.1 points

• Citi Eurozone Economic Surprise Index 5.7 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index -12.1 -1.7 points

• 10-Year TIPS Spread 2.44 -3.0 basis points
• 95.1%(unch.) chance of no change at Jan. 26th meeting, 69.6%(unch.) chance of no change at March 16th meeting

US Covid-19:

• 212 new infections/100K people(last 7 days total) +35/100K people
• 40% of Jan. 7th, 2021 peak(highest daily avg. new infections) +7.0 percentage point
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -385 open in Japan 
• China A50 Futures: Indicating -101 open in China

• DAX Futures: Indicating -54 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure:  Moved to 25% Net Long