Stocks Falling Substantially into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.9 +5.5%
• DJIA Intraday % Swing 1.54%
  
• Bloomberg Global Risk On/Risk Off Index 47.6 -4.4%

• Euro/Yen Carry Return Index 148.25 -.08%

• Emerging Markets Currency Volatility(VXY) 11.7 +1.0%

• CBOE S&P 500 Implied Correlation Index 42.8 +3.9% 

• ISE Sentiment Index 99.0 -6.0 points
  

• Total Put/Call 1.02 +9.7%

• NYSE Arms .94 -61.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.0 +4.0%
  

• US Energy High-Yield OAS 381.7 +3.1%
• Bloomberg TRACE # Distressed Bonds Traded 428.0 +19.0
  

• European Financial Sector CDS Index 101.1 +1.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 431.5 -1.7%
  

• Italian/German 10Y Yld Spread 185.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 128.0 +1.0%
  

• Emerging Market CDS Index 244.1 +1.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.3 +.42%

• 2-Year Swap Spread 31.5 basis points +.25 basis point
  

• TED Spread 45.0 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -32.25 basis points +1.0 basis point
  
• MBS  5/10 Treasury Spread  150.0 +8.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 124.0 unch.
  
• Avg. Auto ABS OAS 1.19 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 -.06%
• 3-Month T-Bill Yield 4.26% -2.0 basis points
  

• Yield Curve -83.0 basis points (2s/10s) -4.0 basis points
  

• China Iron Ore Spot 108.60 USD/Metric Tonne +.4%
• Dutch TTF Nat Gas(European benchmark) 141.3 euros/megawatt-hour +4.9%

• Citi US Economic Surprise Index 18.8 -.9 point

• Citi Eurozone Economic Surprise Index 33.1 +1.6 points
  

• Citi Emerging Markets Economic Surprise Index .3 -.3 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.25 +.11:  Growth Rate +11.3% unch, P/E 17.1 -.2
  
• Bloomberg US Financial Conditions Index -.52 -3.0 basis points
  
• US Atlanta Fed GDPNow Forecast +3.37% +53.0 bps

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.87% unch.: CPI YoY +7.49% unch.
  
• 10-Year TIPS Spread 2.34 -5.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.6%(-.5 percentage point) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 41.4%(+1.2 percentage points) chance of 4.75%-5.0%.
  

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 -79.4%(+1.1 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -340 open in Japan 
• China A50 Futures: Indicating -24 open in China

• DAX Futures: Indicating -77 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some of them
  

• Market Exposure: 25% Net Long