Stocks Slightly Lower into Afternoon on Rising Consumer Inflation Expectations, Fed Credibility Concerns, Dollar Strength, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 20.8 +.6%
• DJIA Intraday % Swing .87%
  
• Bloomberg Global Risk On/Risk Off Index 60.6 +3.0%

• Euro/Yen Carry Return Index 145.7 -.7%

• Emerging Markets Currency Volatility(VXY) 10.6 +.9%

• CBOE S&P 500 Implied Correlation Index 36.0 +2.8% 

• ISE Sentiment Index 125.0 +34.0 points
  

• Total Put/Call .99 +15.1%

• NYSE Arms 1.01 -12.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.2 +2.1%
  

• US Energy High-Yield OAS 350.13 +2.0%
• Bloomberg TRACE # Distressed Bonds Traded 313.0 +4.0
  

• European Financial Sector CDS Index 87.3 +4.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 371.2 +5.6%
  

• Italian/German 10Y Yld Spread 185.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 106.6 +2.1%
  

• Emerging Market CDS Index 235.3 +1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.8 -.39%

• 2-Year Swap Spread 29.75 basis points +.75 basis point
  

• TED Spread 12.75 basis points -2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -9.5 unch.
  
• MBS  5/10 Treasury Spread  144.0 +9.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 102.0 -2.0 basis points
  
• Avg. Auto ABS OAS .66 -4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.9 -.23%
• 3-Month T-Bill Yield 4.74% +2.0 basis points
  

• China Iron Ore Spot 124.1 USD/Metric Tonne -.5%
• Dutch TTF Nat Gas(European benchmark) 53.9 euros/megawatt-hour +2.3%

• Citi US Economic Surprise Index 24.1 +.3 point

• Citi Eurozone Economic Surprise Index 92.4 -.6 point
  

• Citi Emerging Markets Economic Surprise Index 6.5 +2.8 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 223.95 +.01:  Growth Rate +.3% unch., P/E 18.2 -.2
• S&P 500 Current Year Estimated Profit Margin 11.93% -14.0 basis points
  
• Bloomberg US Financial Conditions Index .39 -2.0 basis points
  
• Yield Curve -77.5 basis points (2s/10s) +5.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.16% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.48% +4.0 basis points
  
• 10-Year TIPS Spread 2.35 +1.0 basis point
  
• Highest target rate probability for May 3rd FOMC meeting: 72.6%(+1.6 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 48.3%(-1.7 percentage points) 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 -83.2%(-.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -95 open in Japan 
• China A50 Futures: Indicating -23 open in China

• DAX Futures: Indicating +47 open in Germany

Portfolio:

• Higher:  On gains in my medical/industrial/commodity sector longs, index hedges and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long