Stocks Reversing Lower into Final Hour on Passage of Stagflationary Omnibus Spending Bill, Rising Fed Rate-Hike Odds, Emerging Markets/US High-Yield Debt Angst, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume:  Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.9 +4.7%
• DJIA Intraday % Swing .96%
  
• Bloomberg Global Risk On/Risk Off Index 56.5 +1.7%

• Euro/Yen Carry Return Index 147.0 +.47%

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

• CBOE S&P 500 Implied Correlation Index 44.99 +1.1% 

• ISE Sentiment Index 106.0 +2.0 points
  

• Total Put/Call .99 -1.0%

• NYSE Arms .84 +2.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.5 -.22%
  

• US Energy High-Yield OAS 378.96 -.83%
• Bloomberg TRACE # Distressed Bonds Traded 339.0 -23.0
  

• European Financial Sector CDS Index 103.59 +.68% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.09 n/a
  

• Italian/German 10Y Yld Spread 211.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 134.79 +.68%
  

• Emerging Market CDS Index 239.44 -.34%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.4 -.04%

• 2-Year Swap Spread 28.0 basis points -.5 basis points
  

• TED Spread 44.75 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -30.5 basis points unch.
  
• MBS  5/10 Treasury Spread  142.0 +3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 119.0 unch.
  
• Avg. Auto ABS OAS .90 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 -.36%
• 3-Month T-Bill Yield 4.26% -2.0 basis points
  

• China Iron Ore Spot 113.3 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 80.99 euros/megawatt-hour -2.4%

• Citi US Economic Surprise Index -5.80 unch.

• Citi Eurozone Economic Surprise Index 69.8 +.8 point
  

• Citi Emerging Markets Economic Surprise Index -20.8 -1.0 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.80 +.07:  Growth Rate +10.9% -.4 percentage point, P/E 16.7 unch.
  
• Bloomberg US Financial Conditions Index -.38 +2.0 basis points
  
• Yield Curve -55.0 basis points (2s/10s) +2.75 basis points
• US Atlanta Fed GDPNow Forecast +3.66% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.69% unch.
  
• 10-Year TIPS Spread 2.28 +5.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 55.8%(+.1 percentage point) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 40.5%(+9.2 percentage points) chance of 5.0%-5.25%.
  

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 -75.0%(+.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -260 open in Japan 
• China A50 Futures: Indicating +65 open in China

• DAX Futures: Indicating +43 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long