Stocks Falling Substantially into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.3 +2.2%
• Bloomberg Global Risk On/Risk Off Index 4,771.0 +62.0 points

• Euro/Yen Carry Return Index 144.45 +.5%

• Emerging Markets Currency Volatility(VXY) 12.0 -.33%

• CBOE S&P 500 Implied Correlation Index 44.3 +1.5% 

• ISE Sentiment Index 73.0 +5.0 points
  

• Total Put/Call 1.0 +12.0%

• NYSE Arms 1.03 +49.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.3 +1.9%
  

• US Energy High-Yield OAS 369.20 +.07%
• Bloomberg TRACE # Distressed Bonds Traded 292.0 -44.0
  

• European Financial Sector CDS Index 98.32 +.11%

• Italian/German 10Y Yld Spread 213.0 basis points +11.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 111.59 +.03%
  

• Emerging Market CDS Index 271.42 +.57%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.75 unch.
  
• Russia Sovereign Debt Credit Default Swap 10,195.4 n/a
  

• 2-Year Swap Spread 37.75 basis points +3.0 basis points
  

• TED Spread 48.5 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.0 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  111.0 -9.0 basis points
  
• iShares CMBS ETF 48.32 -.16%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.15 -.09%
• 3-Month T-Bill Yield 1.15% +3.0 basis points
  

• Yield Curve 29.5 basis points (2s/10s) +2.5 basis points
  

• China Iron Ore Spot 144.30 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index -45.6 -7.8 points

• Citi Eurozone Economic Surprise Index 14.9 -6.2 points
  

• Citi Emerging Markets Economic Surprise Index 18.3 -2.3 points

• 10-Year TIPS Spread 2.75 +8.0 basis points
  
• 0.0%(unch.) chance of no change at July 27th FOMC meeting, 0.0%(unch.) chance of no change at September 21st meeting

US Covid-19:

• 220 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -82.4%(+1.4 percentage points) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -201 open in Japan 
• China A50 Futures: Indicating +21 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to Market Neutral