Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, Fed "Higher for Longer" Worries, Earnings Outlook Concerns, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.9 +7.6%
• DJIA Intraday % Swing .76%
  
• Bloomberg Global Risk On/Risk Off Index 58.6 -1.0%

• Euro/Yen Carry Return Index 146.8 +.25%

• Emerging Markets Currency Volatility(VXY) 10.4 +.9%

• CBOE S&P 500 Implied Correlation Index 34.9 +3.6% 

• ISE Sentiment Index 118.0 -3.0 point
  

• Total Put/Call .87 +6.1%

• NYSE Arms 1.24 +18.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 73.0 +2.1%
  

• US Energy High-Yield OAS 356.98 +1.0%
• Bloomberg TRACE # Distressed Bonds Traded 294.0 -11.0
  

• European Financial Sector CDS Index 89.19 +3.0% 
• Credit Suisse Subordinated 5Y Credit Default Swap 345.3 +4.0%
  

• Italian/German 10Y Yld Spread 188.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 104.76 +1.4%
  

• Emerging Market CDS Index 229.0 +3.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.87 -.06%

• 2-Year Swap Spread 28.25 basis points +.25 basis point
  

• TED Spread 16.0 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread  132.0 +1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 107.0 unch.
  
• Avg. Auto ABS OAS .70 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.5 -.21%
• 3-Month T-Bill Yield 4.65% unch.
  

• China Iron Ore Spot 126.6 USD/Metric Tonne -1.2%
• Dutch TTF Nat Gas(European benchmark) 55.1 euros/megawatt-hour -.49%

• Citi US Economic Surprise Index -5.4 -2.3 points

• Citi Eurozone Economic Surprise Index 91.0 +6.8 points
  

• Citi Emerging Markets Economic Surprise Index 5.2 +1.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.79 -.68:  Growth Rate +9.9% -.5 percentage point, P/E 17.8 -.1
  
• Bloomberg US Financial Conditions Index .31 -7.0 basis points
  
• Yield Curve -71.25 basis points (2s/10s) -2.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +.67% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% -15.0 basis points: CPI YoY +6.39% unch.
  
• 10-Year TIPS Spread 2.30 -3.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 84.3%(+.1 percentage point) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 51.3%(-5.6 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(-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 -83.2%(-3.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +26 open in Japan 
• China A50 Futures: Indicating +87 open in China

• DAX Futures: Indicating +17 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long