Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, China Hard-Landing Concerns, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.01 -.99%
• DJIA Intraday % Swing 1.0%
  
• Bloomberg Global Risk On/Risk Off Index 44.5 -5.9%

• Euro/Yen Carry Return Index 150.6 -1.2%

• Emerging Markets Currency Volatility(VXY) 13.0 +.54%

• CBOE S&P 500 Implied Correlation Index 50.3 -1.7% 

• ISE Sentiment Index 98.0 -3.0 points
  

• Total Put/Call .97 +4.3%

• NYSE Arms 1.02 +3.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 90.94 -1.6%
  

• US Energy High-Yield OAS 374.74 -.61%
• Bloomberg TRACE # Distressed Bonds Traded 450.0 -4.0
  

• European Financial Sector CDS Index 124.03 -.5% 
• Credit Suisse Subordinated 5Y Credit Default Swap 335.0 -3.0%
  

• Italian/German 10Y Yld Spread 205.0 basis points -17.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 218.5 -2.6%
  

• Emerging Market CDS Index 288.57 -2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.20 +.53%

• 2-Year Swap Spread 34.75 basis points +.5 basis point
  

• TED Spread 36.0 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -46.75 basis points +4.0 basis points
  
• MBS  5/10 Treasury Spread  166.0 -5.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 127.0 unch.
  
• Avg. Auto ABS OAS 1.07 +4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.7 +.11%
• 3-Month T-Bill Yield 4.01% +1.0 bps
  

• Yield Curve -37.75 basis points (2s/10s) +3.0 basis points
  

• China Iron Ore Spot 81.55 USD/Metric Tonne -2.3%
• Dutch TTF Nat Gas(European benchmark) 108.50 euros/megawatt-hour +4.0%

• Citi US Economic Surprise Index 13.7 -2.7 points

• Citi Eurozone Economic Surprise Index 3.5 -2.0 points
  

• Citi Emerging Markets Economic Surprise Index 6.5 +2.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 233.33 -.10:  Growth Rate +14.6% -.1 percentage point, P/E 16.4 +.1
  
• Bloomberg US Financial Conditions Index -1.17 -3.0 basis points
  
• US Atlanta Fed GDPNow Forecast +3.09% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.11% unch.
  
• 10-Year TIPS Spread 2.47 +4.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 57.0%(-2.8 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 47.0%(+5.7 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 49 new infections/100K people(last 7 days total). 2.8%(-.4 percentage point) of 1/14/22 peak(1,740) -4/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -84.9%(-.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -230 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% Net Long