Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, European/Emerging Markets/US High-Yield Debt Angst, US Dollar Strength, Consumer Discretionary/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 24.6 +5.5%
• DJIA Intraday % Swing .59% +11.6%
  
• Bloomberg Global Risk On/Risk Off Index 3,652.0 -258.0 points

• Euro/Yen Carry Return Index 142.3 -.97%

• Emerging Markets Currency Volatility(VXY) 12.0 -.3%

• CBOE S&P 500 Implied Correlation Index 42.8 +2.7% 

• ISE Sentiment Index 90.0 -19.0 points
  

• Total Put/Call 1.0 +1.0%

• NYSE Arms 1.33 +60.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 87.87 +2.7%
  

• US Energy High-Yield OAS 492.41 +.08%
• Bloomberg TRACE # Distressed Bonds Traded 469.0 +8.0
  

• European Financial Sector CDS Index 124.91 +8.2%

• Italian/German 10Y Yld Spread 232.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 150.94 +1.2%
  

• Emerging Market CDS Index 369.88 +4.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.53 -.03%
  
• Ukraine Sovereign Debt Credit Default Swap 11,950.9 +4.9%
  

• 2-Year Swap Spread 23.75 basis points +.75 basis point
  

• TED Spread 29.25 basis points -9.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 basis points -.75 basis point
  
• MBS  5/10 Treasury Spread  137.0 +2.0 basis points
  
• iShares CMBS ETF 48.64 +.23%
• Avg. Auto ABS OAS .96 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.76 -.39%
• 3-Month T-Bill Yield 2.44% -1.0 basis point
  

• Yield Curve -26.25 basis points (2s/10s) -4.25 basis points
  

• China Iron Ore Spot 110.05 USD/Metric Tonne +2.9%

• Citi US Economic Surprise Index -58.30 +1.3 points

• Citi Eurozone Economic Surprise Index -94.50 +1.3 points
  

• Citi Emerging Markets Economic Surprise Index 21.9 +2.2 points

• 10-Year TIPS Spread 2.36 -1.0 basis point
  
• Highest target rate probability for September 21st FOMC meeting: 51.1%(+7.2 percentage points) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 43.6%(-1.7 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 273 new infections/100K people(last 7 days total). 15.7%(+.4 percentage point) of 1/14/22 peak(1,740) +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -70.2%(+2.4 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -215 open in Japan 
• China A50 Futures: Indicating -74 open in China

• DAX Futures: Indicating -41 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to Market Neutral