Stocks Falling into Final Hour on Passage of Stagflationary Omnibus Spending Bill, China Hard-Landing Fears, US High-Yield Debt Angst, Tech/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume:  Light

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 21.5 -.8%
• DJIA Intraday % Swing .96%
  
• Bloomberg Global Risk On/Risk Off Index 56.4 -.26%

• Euro/Yen Carry Return Index 147.69 +.46%

• Emerging Markets Currency Volatility(VXY) 10.8 -.3%

• CBOE S&P 500 Implied Correlation Index 44.3 -.14% 

• ISE Sentiment Index 89.0 -17.0 points
  

• Total Put/Call 2.03 +105.0%

• NYSE Arms 1.08 +46.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.57 +2.3%
  

• US Energy High-Yield OAS 389.65 +1.92%
• Bloomberg TRACE # Distressed Bonds Traded 298.0 -41.0
  

• European Financial Sector CDS Index 102.73 -.86% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.09 n/a
  

• Italian/German 10Y Yld Spread 213.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.9 -.97%
  

• Emerging Market CDS Index 239.97 +.22%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.8 -.14%

• 2-Year Swap Spread 31.25 basis points +3.0 basis points
  

• TED Spread 28.75 basis points -16.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -26.25 basis points -4.25 basis points
  
• MBS  5/10 Treasury Spread  144.0 +2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 118.0 -1.0 basis points
  
• Avg. Auto ABS OAS .89 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.20%
• 3-Month T-Bill Yield 4.45% +18.0 basis points
  

• China Iron Ore Spot 113.5 USD/Metric Tonne +3%
• Dutch TTF Nat Gas(European benchmark) 83.7 euros/megawatt-hour +4.6%

• Citi US Economic Surprise Index -4.40 +1.4 points

• Citi Eurozone Economic Surprise Index 68.7 -1.1 points
  

• Citi Emerging Markets Economic Surprise Index -19.1 +1.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.87 +.07:  Growth Rate +10.9% unch., P/E 16.5 -.02
  
• Bloomberg US Financial Conditions Index -.23 +17.0 basis points
  
• Yield Curve -48.0 basis points (2s/10s) +7.0 basis points
• US Atlanta Fed GDPNow Forecast +3.66% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% -5.0 basis points
  
• 10-Year TIPS Spread 2.29 +1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 56.2%(+.4 percentage point) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 43.4%(+2.6 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 154 new infections/100K people(last 7 days total). 8.9%(+.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 -74.1%(+.9 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -230 open in Japan 
• China A50 Futures: Indicating -57 open in China

• DAX Futures: Indicating +37 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 25% Net Long