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

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.3 +.7%
• DJIA Intraday % Swing 1.26%
  
• Bloomberg Global Risk On/Risk Off Index 56.2 -.5%

• Euro/Yen Carry Return Index 146.6 -.3%

• Emerging Markets Currency Volatility(VXY) 10.3 -1.1%

• CBOE S&P 500 Implied Correlation Index 36.8 +2.3% 

• ISE Sentiment Index 96.0 +8.0 points
  

• Total Put/Call .96 -5.9%

• NYSE Arms .80 -42.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.07 +.59%
  

• US Energy High-Yield OAS 363.08 +1.1%
• Bloomberg TRACE # Distressed Bonds Traded 326.0 +16.0
  

• European Financial Sector CDS Index 89.6 +1.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 362.5 -.2%
  

• Italian/German 10Y Yld Spread 179.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 105.8 -1.1%
  

• Emerging Market CDS Index 228.7 +.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.01 +.25%

• 2-Year Swap Spread 29.5 basis points +4.75 basis points
  

• TED Spread 16.25 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  134.0 -2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 108.0 unch.
  
• Avg. Auto ABS OAS .72 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.73 +.17%
• 3-Month T-Bill Yield 4.65% -1.0 basis point
  

• China Iron Ore Spot 124.7 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 56.7 euros/megawatt-hour -2.8%

• Citi US Economic Surprise Index -15.7 -.5 point

• Citi Eurozone Economic Surprise Index 87.7 -2.1 points
  

• Citi Emerging Markets Economic Surprise Index 2.9 -.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.92 -.30:  Growth Rate +10.4% -.2 percentage point, P/E 17.6 unch.
  
• Bloomberg US Financial Conditions Index .26 +1.0 basis point
  
• Yield Curve -68.75 basis points (2s/10s) +6.0 basis points
• US Atlanta Fed GDPNow Forecast +3.53% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% unch.: CPI YoY +6.39% +5.0 basis points
  
• 10-Year TIPS Spread 2.28 unch.
  
• Highest target rate probability for March 22nd FOMC meeting: 82.5%(+2.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 59.3%(+4.5 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 105 new infections/100K people(last 7 days total). 7.2%(-.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 -79.8%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +15 open in Japan 
• China A50 Futures: Indicating +263 open in China

• DAX Futures: Indicating +93 open in Germany

Portfolio:

• Slightly Lower:  On losses in my medical/tech/utility sector longs
  

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

• Market Exposure: Moved to 25% Net Long