Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Increasingly Divisive Political Rhetoric, Consumer Discretionary/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 26.4 +2.4%
• DJIA Intraday % Swing 1.59%
  
• Bloomberg Global Risk On/Risk Off Index 46.0 -2.1%

• Euro/Yen Carry Return Index 150.20 -.59%

• Emerging Markets Currency Volatility(VXY) 12.5 -.32%

• CBOE S&P 500 Implied Correlation Index 52.1 +.2% 

• ISE Sentiment Index 99.0 +19.0 points
  

• Total Put/Call .95 +1.1%

• NYSE Arms .85 +4.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 87.3 -1.8%
  

• US Energy High-Yield OAS 353.92 +.97%
• Bloomberg TRACE # Distressed Bonds Traded 476.0 +5.0
  

• European Financial Sector CDS Index 122.5 +1.9% 
• Credit Suisse Subordinated 5Y Credit Default Swap 339.55 +2.5%
  

• Italian/German 10Y Yld Spread 216.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 218.1 -5.0%
  

• Emerging Market CDS Index 280.19 -1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.87 +.11%

• 2-Year Swap Spread 40.0 basis points +2.5 basis points
  

• TED Spread 32.75 basis points -2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -53.75 basis points +1.0 basis point
  
• MBS  5/10 Treasury Spread  165.0 -4.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 131.0 -2.0 basis points
  
• Avg. Auto ABS OAS 1.11 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.63 +.2%
• 3-Month T-Bill Yield 4.10% +3.0 basis points
  

• Yield Curve -46.25 basis points (2s/10s) +2.75 basis points
  

• China Iron Ore Spot 80.9 USD/Metric Tonne +1.4%
• Dutch TTF Nat Gas(European benchmark) 135.90 euros/megawatt-hour +17.0%

• Citi US Economic Surprise Index 13.5 +1.1 points

• Citi Eurozone Economic Surprise Index 8.9 -9.3 points
  

• Citi Emerging Markets Economic Surprise Index 3.8 -.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 232.04 +.05:  Growth Rate +12.1% -.8 percentage point, P/E 16.7 +.1 point
  
• Bloomberg US Financial Conditions Index -.99 +3.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.60% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% unch.
  
• 10-Year TIPS Spread 2.54 +3.0 basis points
  
• Highest target rate probability for February 1st FOMC meeting: 44.0%(-3.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 41.0%(+9.4 percentage points) 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 -84.4%(+.3 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +12 open in Japan 
• China A50 Futures: Indicating -63 open in China

• DAX Futures: Indicating +83 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% Net Long