Stocks Lower into Afternoon on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Technical Selling, Tech/Banking Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.6 -1.4%
• DJIA Intraday % Swing .95%
  
• Bloomberg Global Risk On/Risk Off Index 49.7 +1.7%

• Euro/Yen Carry Return Index 146.6 -.5%

• Emerging Markets Currency Volatility(VXY) 11.9 +.9%

• CBOE S&P 500 Implied Correlation Index 40.6 -3.2% 

• ISE Sentiment Index 129.0 +32.0 points
  

• Total Put/Call .88 -7.37%

• NYSE Arms .73 -58.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.85 +1.5%
  

• US Energy High-Yield OAS 367.99 -.97%
• Bloomberg TRACE # Distressed Bonds Traded 381.0 +3.0
  

• European Financial Sector CDS Index 97.82 +.96% 
• Credit Suisse Subordinated 5Y Credit Default Swap 463.05 unch.
  

• Italian/German 10Y Yld Spread 191.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 131.1 -.04%
  

• Emerging Market CDS Index 231.1 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.05 +.19%

• 2-Year Swap Spread 31.5 basis points -1.75 basis points
  

• TED Spread 45.5 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -34.75 basis points -1.75 basis points
  
• MBS  5/10 Treasury Spread  135.0 -1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 126.0 -2.0 basis points
  
• Avg. Auto ABS OAS 1.21 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.9 -.02%
• 3-Month T-Bill Yield 4.30% +1.0 basis point
  

• Yield Curve -77.25 basis points (2s/10s) -4.5 basis points
  

• China Iron Ore Spot 106.90 USD/Metric Tonne +2.7%
• Dutch TTF Nat Gas(European benchmark) 135.5 euros/megawatt-hour -2.7%

• Citi US Economic Surprise Index 12.9 +3.4 points

• Citi Eurozone Economic Surprise Index 27.5 +.1 point
  

• Citi Emerging Markets Economic Surprise Index .2 +1.0 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.15 +.53:  Growth Rate +11.3% +.3 percentage point, P/E 17.6 -.2
  
• Bloomberg US Financial Conditions Index -.43 +12.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.84% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.87% unch.: CPI YoY +7.49% unch.
  
• 10-Year TIPS Spread 2.42 +6.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 46.2%(+3.6 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 44.5%(-1.7 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 -80.5%(+0.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -100 open in Japan 
• China A50 Futures: Indicating +205 open in China

• DAX Futures: Indicating -3 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long