Stock Declining Substantially into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Surging European/Emerging Markets/US High-Yield Debt Angst

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.9 +7.9%
• DJIA Intraday % Swing 1.56%
  
• Bloomberg Global Risk On/Risk Off Index 60.8 -.5%

• Euro/Yen Carry Return Index 149.4 +.13%

• Emerging Markets Currency Volatility(VXY) 10.8 -.3%

• CBOE S&P 500 Implied Correlation Index 38.3 +8.5% 

• ISE Sentiment Index 89.0 -7.0 points
  

• Total Put/Call 1.0 -13.1%

• NYSE Arms .90 -.10%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.81 +5.5%
  

• US Energy High-Yield OAS 383.86 +2.2%
• Bloomberg TRACE # Distressed Bonds Traded 313.0 -9.0
  

• European Financial Sector CDS Index 90.4 +4.5% 
• Credit Suisse Subordinated 5Y Credit Default Swap 399.95 +3.2%
  

• Italian/German 10Y Yld Spread 194.0 basis points +8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 118.5 +4.7%
  

• Emerging Market CDS Index 247.90 +4.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.1 -1.31%

• 2-Year Swap Spread 31.5 basis points -.5 basis point
  

• TED Spread 11.75 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -6.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread  154.0 +6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 505.0 unch.
  
• Avg. Auto ABS OAS 61.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.54 -.27%
• 3-Month T-Bill Yield 4.80% +2.0 basis points
  

• China Iron Ore Spot 126.3 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 48.5 euros/megawatt-hour -2.7%

• Citi US Economic Surprise Index 32.7 +3.7 points

• Citi Eurozone Economic Surprise Index 79.4 -10.8 points
  

• Citi Emerging Markets Economic Surprise Index 3.1 -.7 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.07 +.05:  Growth Rate +.2% unch., P/E 17.9 -.2
• S&P 500 Current Year Estimated Profit Margin 12.42% unch.
  
• Bloomberg US Financial Conditions Index .24 -2.0 basis points
  
• Yield Curve -78.50 basis points (2s/10s) +1.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.50% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.24% unch.
  
• 10-Year TIPS Spread 2.43 +6.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 75.2%(-1.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 57.6%(+4.7 percentage points) chance of 5.25%-5.5%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(-0.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.3%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -200 open in Japan 
• China A50 Futures: Indicating -60 open in China

• DAX Futures: Indicating -10 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 Market Neutral