Stocks Finish Near Session Lows on US Policy-Induced Stagflation Fears, Earnings Outlook Jitters, China Hard Landing Fears, Tech/Retail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 24.1 -1.7%
• DJIA Intraday % Swing .49%
  
• Bloomberg Global Risk On/Risk Off Index 47.2 -3.4%

• Euro/Yen Carry Return Index 149.61 +.46%

• Emerging Markets Currency Volatility(VXY) 12.2 -.2%

• CBOE S&P 500 Implied Correlation Index 45.7 -1.7% 

• ISE Sentiment Index 98.0 +2.0 points
  

• Total Put/Call 1.19 +43.4%

• NYSE Arms 2.33 +117.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.72 +.89%
  

• US Energy High-Yield OAS 369.08 +1.44%
• Bloomberg TRACE # Distressed Bonds Traded 412.0 +6
  

• European Financial Sector CDS Index 105.69 +3.0% 
• Credit Suisse Subordinated 5Y Credit Default Swap 358.73 +4.82%
  

• Italian/German 10Y Yld Spread 194.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 141.34 -.22%
  

• Emerging Market CDS Index 250.12 +3.93%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.77 +.03%

• 2-Year Swap Spread 32.25 basis points -1.0 basis point
  

• TED Spread 43.5 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -50.25 basis points +2.0 basis points
  
• MBS  5/10 Treasury Spread  142.0 -4.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 131.0 -1.0 basis point
  
• Avg. Auto ABS OAS 1.21 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.46 -.21%
• 3-Month T-Bill Yield 4.20% +5.0 basis points
  

• Yield Curve -67.25 basis points (2s/10s) -9.75 basis points
  

• China Iron Ore Spot 95.4 USD/Metric Tonne -.9%
• Dutch TTF Nat Gas(European benchmark) 106.7 euros/megawatt-hour -14.1%

• Citi US Economic Surprise Index 14.3 +3.5 points

• Citi Eurozone Economic Surprise Index 17.0 -.6 point
  

• Citi Emerging Markets Economic Surprise Index -.5 -.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.70 -.01:  Growth Rate +11.5% +.1 percentage point, P/E 17.2 -.1
  
• Bloomberg US Financial Conditions Index -.85 +1.0 basis point
  
• US Atlanta Fed GDPNow Forecast +4.38% +38.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.60% unch.
  
• 10-Year TIPS Spread 2.31 -6.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 54.6%(+2.5 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 49.1%(+1.0 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(+.0 percentage point) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -84.2%(+.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -101 open in Japan 
• China A50 Futures: Indicating -19 open in China

• DAX Futures: Indicating +22 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/commodity/industrial/medical sector longs
  

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long