Stocks Lower into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Dollar Strength, Tech/Consumer Discretionary 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) 22.1 +4.5%
• DJIA Intraday % Swing 1.09%
  
• Bloomberg Global Risk On/Risk Off Index 60.2 -.4%

• Euro/Yen Carry Return Index 149.8 +.9%

• Emerging Markets Currency Volatility(VXY) 10.95 +1.7%

• CBOE S&P 500 Implied Correlation Index 38.2 +7.6% 

• ISE Sentiment Index 95.0 -8.0 points
  

• Total Put/Call 1.13 +10.8%

• NYSE Arms .94 -29.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.5 +2.53%
  

• US Energy High-Yield OAS 375.26 -.72%
• Bloomberg TRACE # Distressed Bonds Traded 301.0 unch.
  

• European Financial Sector CDS Index 90.2 +2.1% 
• Credit Suisse Subordinated 5Y Credit Default Swap 404.91 +.6%
  

• Italian/German 10Y Yld Spread 190.0 basis basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 117.8 -1.3%
  

• Emerging Market CDS Index 245.31 +3.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.15 -.09%

• 2-Year Swap Spread 34.0 basis points unch.
  

• TED Spread 15.0 basis points +2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -8.0 -1.25 basis points
  
• MBS  5/10 Treasury Spread  153.0 +6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 513.0 -5.0 basis points
  
• Avg. Auto ABS OAS 61.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.4 -.44%
• 3-Month T-Bill Yield 4.81% unch.
  

• China Iron Ore Spot 123.8 USD/Metric Tonne -2.3%
• Dutch TTF Nat Gas(European benchmark) 51.0 euros/megawatt-hour +.5%

• Citi US Economic Surprise Index 37.5 -3.3 points

• Citi Eurozone Economic Surprise Index 68.7 -3.0 points
  

• Citi Emerging Markets Economic Surprise Index 2.5 -.9 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 223.97 -.06:  Growth Rate +.3% unch., P/E 17.7 unch.
• S&P 500 Current Year Estimated Profit Margin 12.39% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .24 unch.
  
• Yield Curve -86.0 basis points (2s/10s) -4.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.75% +25.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% +42.0 basis points: CPI YoY +6.23% unch.
  
• 10-Year TIPS Spread 2.38 -2.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 69.3%(-2.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 56.8%(+.9 percentage point) 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 -150 open in Japan 
• China A50 Futures: Indicating -205 open in China

• DAX Futures: Indicating +38 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long