Stocks Falling Substantially into Final Hour on Senate Passage of Stagflationary Omnibus Spending Bill, Earnings Outlook Worries, China Hard-Landing Fears, Tech/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.7 +17.8%
• DJIA Intraday % Swing 2.02%
  
• Bloomberg Global Risk On/Risk Off Index 52.1 -5.7%

• Euro/Yen Carry Return Index 145.1 -.19%

• Emerging Markets Currency Volatility(VXY) 10.6 +.2%

• CBOE S&P 500 Implied Correlation Index 46.1 +5.6% 

• ISE Sentiment Index 70.0 -28.0 points
  

• Total Put/Call 1.25 -17.8%

• NYSE Arms 1.04 +112.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.7 +1.8%
  

• US Energy High-Yield OAS 395.6 +2.6%
• Bloomberg TRACE # Distressed Bonds Traded 384.0 -26.0
  

• European Financial Sector CDS Index 104.63 +.72% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.09 -.69%
  

• Italian/German 10Y Yld Spread 212.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 133.8 +.31%
  

• Emerging Market CDS Index 240.26 +1.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.33 -.38%

• 2-Year Swap Spread 29.25 basis points -2.25 basis points
  

• TED Spread 47.0 basis points +2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -30.25 basis points -2.5 basis points
  
• MBS  5/10 Treasury Spread  140.0 +7.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 120.0 +1.0 basis point
  
• Avg. Auto ABS OAS .96 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 +.3%
• 3-Month T-Bill Yield 4.30% unch.
  

• China Iron Ore Spot 109.4 USD/Metric Tonne -1.3%
• Dutch TTF Nat Gas(European benchmark) 92.20 euros/megawatt-hour -5.7%

• Citi US Economic Surprise Index -6.40 +1.5 points

• Citi Eurozone Economic Surprise Index 68.5 +.3 point
  

• Citi Emerging Markets Economic Surprise Index -19.3 +.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.73 +.13:  Growth Rate +11.3% -.1 percentage point, P/E 16.6 -.3
  
• Bloomberg US Financial Conditions Index -.49 -5.0 basis points
  
• Yield Curve -59.25 basis points (2s/10s) -5.25 basis points
• US Atlanta Fed GDPNow Forecast +2.73% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.69% unch.
  
• 10-Year TIPS Spread 2.20 -9.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 55.7%(+3.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 48.3%(-.1 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 140 new infections/100K people(last 7 days total). 8.0%(+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 -75.4%(+1.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -372 open in Japan 
• China A50 Futures: Indicating -61 open in China

• DAX Futures: Indicating +69 open in Germany

Portfolio:

• Slightly Lower:  On losses in my index hedges and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts, then covered some
  

• Market Exposure: Moved to 25% Net Long