Stocks Lower into Final Hour on Passage of Stagflationary Omnibus Spending Bill, China Hard-Landing Fears, Technical Selling, Transport/Restaurant Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.1 +3.3%
• DJIA Intraday % Swing .82%
  
• Bloomberg Global Risk On/Risk Off Index 56.5 +.2%

• Euro/Yen Carry Return Index 145.18 -1.13%

• Emerging Markets Currency Volatility(VXY) 10.9 -.3%

• CBOE S&P 500 Implied Correlation Index 45.3 +.96% 

• ISE Sentiment Index 98.0 +3.0 points
  

• Total Put/Call 1.18 -6.4%

• NYSE Arms 1.42 +208.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.9 -.28%
  

• US Energy High-Yield OAS 394.5 -.54%
• Bloomberg TRACE # Distressed Bonds Traded 281.0 -18.0
  

• European Financial Sector CDS Index 98.55 -2.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.09 n/a
  

• Italian/German 10Y Yld Spread 214.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 131.77 -.59%
  

• Emerging Market CDS Index 238.61 +.31%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.93 -.50%

• 2-Year Swap Spread 30.0 basis points -.25 basis point
  

• TED Spread 41.0 basis points +12.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.0 basis points +1.5 basis points
  
• MBS  5/10 Treasury Spread  145.0 +5.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 118.0 unch.
  
• Avg. Auto ABS OAS .86 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 +.11%
• 3-Month T-Bill Yield 4.34% -5.0 basis points
  

• China Iron Ore Spot 116.8 USD/Metric Tonne -.30%
• Dutch TTF Nat Gas(European benchmark) 76.3 euros/megawatt-hour -10.9%

• Citi US Economic Surprise Index -2.70 +1.5 points

• Citi Eurozone Economic Surprise Index 67.9 -.2 point
  

• Citi Emerging Markets Economic Surprise Index -20.6 -.4 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.75 +.02:  Growth Rate +10.9% +.1 percentage point, P/E 16.6 -.2
  
• Bloomberg US Financial Conditions Index -.37 -8.0 basis points
  
• Yield Curve -55.75 basis points (2s/10s) -1.75 basis points
• US Atlanta Fed GDPNow Forecast +3.66% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.30 +1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 61.7%(-.5 percentage point) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 41.3%(-5.3 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-2.1 percentage points) of 1/14/22 peak(1,740) -35/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -73.8%(+.3 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -314 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long