Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Diminished Fed Pivot Hopes, Earnings Outlook Jitters, Homebuilding/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 24.0 -.7%
• DJIA Intraday % Swing 1.12%
  
• Bloomberg Global Risk On/Risk Off Index 47.3 -.2%

• Euro/Yen Carry Return Index 150.19 +.21%

• Emerging Markets Currency Volatility(VXY) 12.5 +2.7%

• CBOE S&P 500 Implied Correlation Index 46.8 +3.6% 

• ISE Sentiment Index 120.0 +28.0 points
  

• Total Put/Call .91 -24.2%

• NYSE Arms .84 -60.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.45 +.63%
  

• US Energy High-Yield OAS 369.40 +.08%
• Bloomberg TRACE # Distressed Bonds Traded 414.0 +2.0
  

• European Financial Sector CDS Index 105.69 +2.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 367.55 +2.6%
  

• Italian/German 10Y Yld Spread 192.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 151.04 +6.8%
  

• Emerging Market CDS Index 254.0 +1.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 -.4%

• 2-Year Swap Spread 32.0 basis points -.25 basis point
  

• TED Spread 44.25 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -51.75 basis points -1.5 basis points
  
• MBS  5/10 Treasury Spread  142.0 unch.
  
• Bloomberg US Agg CMBS Avg OAS 131.0 unch.
  
• Avg. Auto ABS OAS 1.23 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.26 -.38%
• 3-Month T-Bill Yield 4.21% +1.0 basis point
  

• Yield Curve -68.25 basis points (2s/10s) -1.0 basis points
  

• China Iron Ore Spot 97.7 USD/Metric Tonne +.7%
• Dutch TTF Nat Gas(European benchmark) 115.5 euros/megawatt-hour +3.4%

• Citi US Economic Surprise Index 12.2 -2.2 points

• Citi Eurozone Economic Surprise Index 16.3 unch.
  

• Citi Emerging Markets Economic Surprise Index -.3 +.2 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.16 -.54:  Growth Rate +11.3% -.2 percentage point, P/E 17.1 -.1
  
• Bloomberg US Financial Conditions Index -.82 +3.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.18% -20.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.60% unch.
  
• 10-Year TIPS Spread 2.29 -2.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 45.9%(+3.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 45.8%(-2.3 percentage points) 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 -84.6%(-.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -5 open in Japan 
• China A50 Futures: Indicating +48 open in China

• DAX Futures: Indicating +42 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech sector longs and index hedges
  

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

• Market Exposure:  Moved to 25% Net Long