Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, Rising Fed Rate-Hike Odds, Earnings Outlook Worries, Tech/Retail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.8 +.2%
• DJIA Intraday % Swing .75%
  
• Bloomberg Global Risk On/Risk Off Index 63.9 +2.3%

• Euro/Yen Carry Return Index 151.05 +.74%

• Emerging Markets Currency Volatility(VXY) 10.5 -.7%

• CBOE S&P 500 Implied Correlation Index 36.0 +1.5% 

• ISE Sentiment Index 105.0 +4.0 points
  

• Total Put/Call 1.21 +21.0%

• NYSE Arms .96 -21.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.8 -.5%
  

• US Energy High-Yield OAS 351.7 -2.0%
• Bloomberg TRACE # Distressed Bonds Traded 324.0 +30
  

• European Financial Sector CDS Index 88.1 -.28% 
• Credit Suisse Subordinated 5Y Credit Default Swap 398.3 -1.3%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 113.0 -2.5%
  

• Emerging Market CDS Index 237.5 -1.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27. +.06%

• 2-Year Swap Spread 34.5 basis points -1.5 basis points
  

• TED Spread 13.25 basis points -3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -7.75 -1.25 basis points
  
• MBS  5/10 Treasury Spread  154.0 +6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 532.0 +7.0 basis points
  
• Avg. Auto ABS OAS 59.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.6%
• 3-Month T-Bill Yield 4.84% +4.0 basis points
  

• China Iron Ore Spot 126.5 USD/Metric Tonne +.3%
• Dutch TTF Nat Gas(European benchmark) 47.1 euros/megawatt-hour +.9%

• Citi US Economic Surprise Index 37.6 -1.0 point

• Citi Eurozone Economic Surprise Index 59.4 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index 9.1 +6.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.13 +.33:  Growth Rate +1.2% +.1 percentage point, P/E 17.6 -.1
• S&P 500 Current Year Estimated Profit Margin 12.34% -3.0 basis points
  
• Bloomberg US Financial Conditions Index .24 +5.0 basis points
  
• Yield Curve -89.75 basis points (2s/10s) -1.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.27% -53.0 basis  points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.21% unch.
  
• 10-Year TIPS Spread 2.42 unch.
  
• Highest target rate probability for May 3rd FOMC meeting: 66.3%(-6.9 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 58.5%(-1.0 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 -61 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +8 open in Germany

Portfolio:

• Slightly Lower:  On losses in my medical sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure: 25% Net Long