Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, Fed Credibility Worries, Earnings Outlook Concerns, Tech/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.0 +7.2%
• DJIA Intraday % Swing .72%
  
• Bloomberg Global Risk On/Risk Off Index 59.9 -1.5%

• Euro/Yen Carry Return Index 146.3 +.21%

• Emerging Markets Currency Volatility(VXY) 10.4 -.4%

• CBOE S&P 500 Implied Correlation Index 34.1 +3.6% 

• ISE Sentiment Index 130.0 +16.0 points
  

• Total Put/Call .85 -5.6%

• NYSE Arms .93 +5.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.0 +1.5%
  

• US Energy High-Yield OAS 349.7 +1.1%
• Bloomberg TRACE # Distressed Bonds Traded 313.0 -1.0
  

• European Financial Sector CDS Index 84.4 +.2% 
• Credit Suisse Subordinated 5Y Credit Default Swap 354.4 +1.7%
  

• Italian/German 10Y Yld Spread 187.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 103.8 -.68%
  

• Emerging Market CDS Index 228.5 +2.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.7 unch.

• 2-Year Swap Spread 28.25 basis points +.75 basis point
  

• TED Spread 15.5 basis points -9.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  135.0 -2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 104.0 unch.
  
• Avg. Auto ABS OAS .70 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.0 -.24%
• 3-Month T-Bill Yield 4.69% +5.0 basis points
  

• China Iron Ore Spot 121.0 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 53.7 euros/megawatt-hour -3.1%

• Citi US Economic Surprise Index 24.2 +.6 point

• Citi Eurozone Economic Surprise Index 94.4 -1.2 points
  

• Citi Emerging Markets Economic Surprise Index 5.9 +.2 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.11 -.14:  Growth Rate +.4% unch., P/E 18.4 unch.
• S&P 500 Current Year Estimated Profit Margin 12.08% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .44 unch.
  
• Yield Curve -81.0 basis points (2s/10s) -1.75 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.16% +7.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.44% unch.
  
• 10-Year TIPS Spread 2.36 +4.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 70.2%(+.6 percentage point) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 48.3%(-.7 percentage point) chance of 5.0%-5.25%.
  

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 -83.0%(+.5 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 -32 open in China

• DAX Futures: Indicating +53 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long