Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Overbought Technical Condition, Tech/Pharma Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.7 -.7%
• DJIA Intraday % Swing 1.50%
  
• Bloomberg Global Risk On/Risk Off Index 46.5 +2.7%

• Euro/Yen Carry Return Index 151.21 -.3%

• Emerging Markets Currency Volatility(VXY) 12.5 -.9%

• CBOE S&P 500 Implied Correlation Index 51.6 -.8% 

• ISE Sentiment Index 70.0 -25.0 points
  

• Total Put/Call .92 +1.1%

• NYSE Arms .72 -35.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 88.51 -1.6%
  

• US Energy High-Yield OAS 351.28 -1.64%
• Bloomberg TRACE # Distressed Bonds Traded 471.0 +14.0
  

• European Financial Sector CDS Index 120.26 -2.5% 
• Credit Suisse Subordinated 5Y Credit Default Swap 330.4 -.27%
  

• Italian/German 10Y Yld Spread 213.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 229.7 -.7%
  

• Emerging Market CDS Index 285.17 -3.75%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.80 -1.08%

• 2-Year Swap Spread 37.5 basis points +.25 basis point
  

• TED Spread 34.75 basis points -4.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -54.75 basis points +.25 basis point
  
• MBS  5/10 Treasury Spread  169.0 +1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 133.0 +3.0 basis points
  
• Avg. Auto ABS OAS 1.10 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.60 +.20%
• 3-Month T-Bill Yield 4.07% +1.0 basis point
  

• Yield Curve -49.0 basis points (2s/10s) -5.75 basis points
  

• China Iron Ore Spot 78.4 USD/Metric Tonne +1.9%
• Dutch TTF Nat Gas(European benchmark) 116.6 euros/megawatt-hour -5.5%

• Citi US Economic Surprise Index 12.4 +4.3 points

• Citi Eurozone Economic Surprise Index 18.2 +9.2 points
  

• Citi Emerging Markets Economic Surprise Index 4.4 -2.8 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.99 -.31:  Growth Rate +12.9% -.2 percentage point, P/E 16.6 -.1 point
  
• Bloomberg US Financial Conditions Index -1.06 -2.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.60% -47.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% -2.0 basis points
  
• 10-Year TIPS Spread 2.51 unch.
  
• Highest target rate probability for December 14th FOMC meeting: 50.3%(+.6 percentage point) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 47.3%(+.1 percentage point) chance of 4.75%-5.0%.
  

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 -84.7%(+1.3 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -96 open in Japan 
• China A50 Futures: Indicating -101 open in China

• DAX Futures: Indicating +33 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long