Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, US Election Credibility Concerns, Dollar Strength, Tech/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume:  Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.4 -1.9%
• DJIA Intraday % Swing 1.43%
  
• Bloomberg Global Risk On/Risk Off Index 48.5 +3.8%

• Euro/Yen Carry Return Index 149.15 -.43%

• Emerging Markets Currency Volatility(VXY) 12.4 +.3%

• CBOE S&P 500 Implied Correlation Index 51.5 -1.0% 

• ISE Sentiment Index 92.0 -3.0 points
  

• Total Put/Call 1.0 -14.2%

• NYSE Arms .62 -75.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 93.07 +2.34%
  

• US Energy High-Yield OAS 362.67 +3.8%
• Bloomberg TRACE # Distressed Bonds Traded 482.0 +6.0
  

• European Financial Sector CDS Index 123.87 +2.2% 
• Credit Suisse Subordinated 5Y Credit Default Swap 362.83 +5.8%
  

• Italian/German 10Y Yld Spread 217.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 221.72 +1.74%
  

• Emerging Market CDS Index 297.58 -.07%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.98 +.71%

• 2-Year Swap Spread 38.25 basis points -1.75 basis points
  

• TED Spread 34.5 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -56.0 basis points -2.25 basis points
  
• MBS  5/10 Treasury Spread  172.0 +7.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 132.0 +1.0 basis point
  
• Avg. Auto ABS OAS 1.14 +3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.32 -.35%
• 3-Month T-Bill Yield 4.11% +1.0 basis point
  

• Yield Curve -57.75 basis points (2s/10s) -11.5 basis points
  

• China Iron Ore Spot 82.3 USD/Metric Tonne +1.7%
• Dutch TTF Nat Gas(European benchmark) 125.10 euros/megawatt-hour -.6%

• Citi US Economic Surprise Index 14.1 +.6 point

• Citi Eurozone Economic Surprise Index 8.2 -.7 point
  

• Citi Emerging Markets Economic Surprise Index 3.8 -.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.94 -.10:  Growth Rate +12.3% +.2 percentage point, P/E 16.1 -.6 point
  
• Bloomberg US Financial Conditions Index 1.02 +1.0 basis point
  
• US Atlanta Fed GDPNow Forecast +3.60% +100.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% unch.
  
• 10-Year TIPS Spread 2.41 -13.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 46.6%(+5.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 3rd meeting: 38.7%(unch.) chance of 5.0%-5.25%.
  

US Covid-19:

• 77 new infections/100K people(last 7 days total). 4.4%(+0.0 percentage points) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -84.8%(-.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -313 open in Japan 
• China A50 Futures: Indicating +30 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

• Higher:  On gains in my industrial/commodity/ sector longs and index hedges
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 25% Net Long