Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Jitters, Dollar Strength, Metals & Mining/Airline Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.2 -1.3%
• DJIA Intraday % Swing 1.11%
  
• Bloomberg Global Risk On/Risk Off Index 56.0 -1.6%

• Euro/Yen Carry Return Index 143.5 -.5%

• Emerging Markets Currency Volatility(VXY) 10.7 +.4%

• CBOE S&P 500 Implied Correlation Index 36.5 -.5% 

• ISE Sentiment Index 124.0 +22.0
  

• Total Put/Call .98 -12.5%

• NYSE Arms 1.18 +5.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.3 +1.2%
  

• US Energy High-Yield OAS 352.38 +1.4%
• Bloomberg TRACE # Distressed Bonds Traded 337.0 +2.0
  

• European Financial Sector CDS Index 87.16 -2.0% 
• Credit Suisse Subordinated 5Y Credit Default Swap 380.61 +.24%
  

• Italian/German 10Y Yld Spread 180.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 106.25 -.11%
  

• Emerging Market CDS Index 230.3 +1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.84 +.09%

• 2-Year Swap Spread 25.5 basis points -1.5 basis points
  

• TED Spread 19.5 basis points -4.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.75 unch.
  
• MBS  5/10 Treasury Spread  135.0 +5.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 112.0 -2.0 basis points
  
• Avg. Auto ABS OAS .77 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.4 -.06%
• 3-Month T-Bill Yield 4.58% -1.0 basis point
  

• China Iron Ore Spot 121.7 USD/Metric Tonne +.92%
• Dutch TTF Nat Gas(European benchmark) 60.06 euros/megawatt-hour +8.3%

• Citi US Economic Surprise Index -13.3 -7.2 points

• Citi Eurozone Economic Surprise Index 88.9 +8.6 points
  

• Citi Emerging Markets Economic Surprise Index 11.8 +28.3 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.83 -.25:  Growth Rate +10.9% unch., P/E 17.5 +.1
  
• Bloomberg US Financial Conditions Index .18 +6.0 basis points
  
• Yield Curve -66.75 basis points (2s/10s) +5.75 basis points
• US Atlanta Fed GDPNow Forecast +4.07% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% unch.: CPI YoY +6.31% unch.
  
• 10-Year TIPS Spread 2.17 -3.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 72.6%(-5.9 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 53.5%(-1.1 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%(-4.9 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +199 open in Japan 
• China A50 Futures: Indicating +86 open in China

• DAX Futures: Indicating +58 open in Germany

Portfolio:

• Higher:  On gains in my tech/commodity sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long