Stocks Slightly Lower into Afternoon on Higher Long-Term Rates, Earnings Outlook Worries, US Economic Data, Tech/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.1 -.3%
• DJIA Intraday % Swing .8%
  
• Bloomberg Global Risk On/Risk Off Index 47.6 +1.5%

• Euro/Yen Carry Return Index 147.9 -.33%

• Emerging Markets Currency Volatility(VXY) 11.9 +.1%

• CBOE S&P 500 Implied Correlation Index 42.5 -.8% 

• ISE Sentiment Index 116.0 +42.0 points
  

• Total Put/Call 1.01 -2.9%

• NYSE Arms .54 -70.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.60 +.11%
  

• US Energy High-Yield OAS 377.64 -.6%
• Bloomberg TRACE # Distressed Bonds Traded 360.0 +11.0
  

• European Financial Sector CDS Index 100.44 -1.6% 
• Credit Suisse Subordinated 5Y Credit Default Swap 447.63 +27.3%
  

• Italian/German 10Y Yld Spread 190.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 141.63 -.22%
  

• Emerging Market CDS Index 237.3 -1.92%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.6 +1.5%

• 2-Year Swap Spread 32.0 basis points unch.
  

• TED Spread 42.25 basis points -5.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -35.75 basis points +7.25 basis points
  
• MBS  5/10 Treasury Spread  145.0 +3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 127.0 unch.
  
• Avg. Auto ABS OAS 1.19 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.58 +.26%
• 3-Month T-Bill Yield 4.30% +2.0 basis points
  

• Yield Curve -74.5 basis points (2s/10s) +2.5 basis points
  

• China Iron Ore Spot 99.6 USD/Metric Tonne -.35%
• Dutch TTF Nat Gas(European benchmark) 129.25 euros/megawatt-hour +4.8%

• Citi US Economic Surprise Index 14.0 -.2 point

• Citi Eurozone Economic Surprise Index 34.9 -2.6 points
  

• Citi Emerging Markets Economic Surprise Index 1.9 -.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.75 +.10:  Growth Rate +11.1% unch., P/E 17.2 -.1
  
• Bloomberg US Financial Conditions Index -.58 +5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.26% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.49% -6.0 basis points
  
• 10-Year TIPS Spread 2.26 -2.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.8%(-1.8 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 39.7%(-2.3 percentage points) chance of 5.0%-5.25%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(+.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 -85.5%(-0.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -73 open in Japan 
• China A50 Futures: Indicating +52 open in China

• DAX Futures: Indicating +59 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long