Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, China Hard-Landing Worries, Dollar Strength, Energy/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.3 +7.6%
• DJIA Intraday % Swing 1.63%
  
• Bloomberg Global Risk On/Risk Off Index 54.0 -4.3%

• Euro/Yen Carry Return Index 142.67 -1.1%

• Emerging Markets Currency Volatility(VXY) 10.9 unch.

• CBOE S&P 500 Implied Correlation Index 44.9 +.5% 

• ISE Sentiment Index 96.0 -2.0 points
  

• Total Put/Call 1.03 -10.4%

• NYSE Arms 1.46 +44.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.44 -1.64%
  

• US Energy High-Yield OAS 396.78 +.55%
• Bloomberg TRACE # Distressed Bonds Traded 268.0 -13.0
  

• European Financial Sector CDS Index 98.55 -.87% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.08 n/a
  

• Italian/German 10Y Yld Spread 211.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.96 -1.36%
  

• Emerging Market CDS Index 234.87 -1.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.10 +.63%

• 2-Year Swap Spread 28.0 basis points -2.0 basis points
  

• TED Spread 43.0 basis points +2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.0 basis points +1.5 basis points
  
• MBS  5/10 Treasury Spread  146.0 +1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 120.0 +2.0 basis points
  
• Avg. Auto ABS OAS .87 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.44 -.47%
• 3-Month T-Bill Yield 4.35% +1.0 basis point
  

• China Iron Ore Spot 116.95 USD/Metric Tonne +.7%
• Dutch TTF Nat Gas(European benchmark) 70.8 euros/megawatt-hour -8.1%

• Citi US Economic Surprise Index -1.30 +1.4 points

• Citi Eurozone Economic Surprise Index 69.3 +1.4 points
  

• Citi Emerging Markets Economic Surprise Index -19.0 +1.6 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.01 +.26:  Growth Rate +11.0% +.1 percentage point, P/E 16.6 unch.
  
• Bloomberg US Financial Conditions Index -.58 -14.0 basis points
  
• Yield Curve -62.25 basis points (2s/10s) -6.5 basis points
• US Atlanta Fed GDPNow Forecast +3.91% +25.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.26 -4.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 62.0%(+1.5 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 41.3%(-.4 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-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 -74.2%(-.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -324 open in Japan 
• China A50 Futures: Indicating +49 open in China

• DAX Futures: Indicating +43 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long