Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Global Virus Mandate/Lockdown Worries, Dollar Strength, Consumer Discretionary/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) 20.6 +9.8%
• Bloomberg Global Risk On/Risk Off Index 3,400.0 -38.0 points

• Euro/Yen Carry Return Index 134.40 -.65%

• Emerging Markets Currency Volatility(VXY) 10.4 +.2%

• CBOE S&P 500 Implied Correlation Index 31.7 +2.9% 

• ISE Sentiment Index 91.0  -9.0 points
  

• Total Put/Call 1.03 +8.4%

• NYSE Arms .73 +17.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.98 +.88%
  

• US Energy High-Yield OAS 391.28 +.81%

• European Financial Sector CDS Index 59.66 +1.9%

• Italian/German 10Y Yld Spread 132.0 -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 80.68 +1.42%
  

• Emerging Market CDS Index 198.44 +1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.59 -.17%

• 2-Year Swap Spread 20.75 +1.25 basis points
  

• TED Spread 14.5 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap 2.0 unch.
  
• MBS  5/10 Treasury Spread  79.5 +6.25 basis points
  
• IHS Markit CMBX BBB- 6 72.25 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.63 -.08%
• 3-Month T-Bill Yield .09% unch.
  

• Yield Curve 84.75 unch.
  

• China Iron Ore Spot 125.50 USD/Metric Tonne -.3%

• Citi US Economic Surprise Index 5.1 +1.5 points

• Citi Eurozone Economic Surprise Index 40.4 -.1 point
  

• Citi Emerging Markets Economic Surprise Index 3.3 -.3 points

• 10-Year TIPS Spread 2.51 unch.
  
• 23.9%(-.3 basis point) chance of no change at March 16th FOMC meeting, 14.4%(-1.3 percentage points) chance of no change at May 4th meeting

US Covid-19:

• 1,501 new infections/100K people(last 7 days total) at new record high +232/100K people
• New Covid-19 patient hospital admissions per 100K population at new record high +32.7% from prior 7-day avg. of 12/26/21 - 1/1/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -323 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +59 open in Germany

Portfolio:

• Slightly Lower: On losses in my transport/industrial/tech/medical/consumer discretionary sector longs

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure:  50% Net Long