Stocks Modestly Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, China Economy Concerns, Alt Energy/Airlines Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.2 -1.4%
• DJIA Intraday % Swing .23% -75.2%
  
• Bloomberg Global Risk On/Risk Off Index 64.5 -3.0%

• Euro/Yen Carry Return Index 173.2 -.26%

• Emerging Markets Currency Volatility(VXY) 7.8 unch.

• CBOE S&P 500 Implied Correlation Index 19.4 -.62% 

• ISE Sentiment Index 140.0 -13.0
  

• Total Put/Call 1.14 +15.2%

• NYSE Arms 1.26 +20.0% 
• NYSE Non-Block Money Flow -$77.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 63.7 -.2%
  

• US Energy High-Yield OAS 340.91 +.53%
• Bloomberg TRACE # Distressed Bonds Traded 366 +10
  

• European Financial Sector CDS Index 79.66 +.04% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 251.39 +.73%
  

• Italian/German 10Y Yld Spread 175.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 99.3 -4.7%
  

• Emerging Market CDS Index 188.79 +.78%
• Israel Sovereign CDS 116.9 -3.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.51 +.51%

• 2-Year SOFR Swap Spread -19.0 basis points unch.
  

• TED Spread 24.75 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.0 -1.5 basis points
  
• MBS  5/10 Treasury Spread 157.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 943.0 +1.0 basis point
  
• Avg. Auto ABS OAS 95.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.9 -.16%
• 3-Month T-Bill Yield 5.38% -1.0 basis point
  

• China Iron Ore Spot 133.9 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 44.07 euros/megawatt-hour -3.8%

• Citi US Economic Surprise Index 33.9 -3.7 points

• Citi Eurozone Economic Surprise Index -33.4 -1.7 points

• Citi Emerging Markets Economic Surprise Index 21.6 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(478 of 500 reporting) +2.6% -.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 241.04 unch.:  Growth Rate +9.1% unch., P/E 18.8 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.16% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +38.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 276.81 -.11: Growth Rate +63.3% -.1 percentage point, P/E 29.9 unch.
  
• Bloomberg US Financial Conditions Index .31 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .36 +10.0 basis points
  
• US Yield Curve -47.5 basis points (2s/10s) -1.75 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +1.97% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.07% -3.0 basis points
  
• 10-Year TIPS Spread 2.26 -5.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 94.8%(-3.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 67.9%(-3.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -159 open in Japan 
• China A50 Futures: Indicating -47 open in China

• DAX Futures: Indicating +62 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech sector longs
  

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

• Market Exposure: Moved to 75% Net Long