Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Technical Selling, Financial/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.0 +3.5%
• DJIA Intraday % Swing 1.77%
  
• Bloomberg Global Risk On/Risk Off Index 53.7 -4.0%

• Euro/Yen Carry Return Index 144.2 +.62%

• Emerging Markets Currency Volatility(VXY) 10.6 -.5%

• CBOE S&P 500 Implied Correlation Index 38.7 +6.2% 

• ISE Sentiment Index 92.0 -21.0
  

• Total Put/Call 1.29 +30.3%

• NYSE Arms 1.97 +37.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.57 +1.1%
  

• US Energy High-Yield OAS 357.24 +2.2%
• Bloomberg TRACE # Distressed Bonds Traded 328.0 -9.0
  

• European Financial Sector CDS Index 87.0 -.24% 
• Credit Suisse Subordinated 5Y Credit Default Swap 361.62 -5.0%
  

• Italian/German 10Y Yld Spread 174.0 basis points -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 104.3 -1.7%
  

• Emerging Market CDS Index 227.8 -.86%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.95 +.24%

• 2-Year Swap Spread 27.5 basis points +2.0 basis points
  

• TED Spread 14.5 basis points -5.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread  134.0 -1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 110.0 -2.0 basis points
  
• Avg. Auto ABS OAS .77 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.40 -.13%
• 3-Month T-Bill Yield 4.63% +5.0 basis points
  

• China Iron Ore Spot 123.5 USD/Metric Tonne +1.5%
• Dutch TTF Nat Gas(European benchmark) 61.71 euros/megawatt-hour +2.7%

• Citi US Economic Surprise Index -24.7 -11.4 points

• Citi Eurozone Economic Surprise Index 88.2 -.7 point
  

• Citi Emerging Markets Economic Surprise Index 7.8 -4.0 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.56 -.27:  Growth Rate +10.9% unch., P/E 17.3 -.2
  
• Bloomberg US Financial Conditions Index .17 +1.0 basis point
  
• Yield Curve -70.5 basis points (2s/10s) -3.75 basis points
• US Atlanta Fed GDPNow Forecast +3.49% -58.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% unch.: CPI YoY +6.34% +3.0 basis points
  
• 10-Year TIPS Spread 2.13 -4.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 70.6%(-6.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 55.7%(-0.0 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 126 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 -78.0%(-0.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -226 open in Japan 
• China A50 Futures: Indicating +19 open in China

• DAX Futures: Indicating +48 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long