Stocks Sharply Higher into Afternoon on Less Hawkish Fed Hopes, Diminished European/Emerging Markets/US High-Yield Debt Angst, Technical Buying, Consumer Discretionary/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.3 -6.1%
• DJIA Intraday % Swing 1.67% +20.3%
  
• Bloomberg Global Risk On/Risk Off Index 4,727.0 +403.0 points

• Euro/Yen Carry Return Index 146.84 +.42%

• Emerging Markets Currency Volatility(VXY) 12.0 unch.

• CBOE S&P 500 Implied Correlation Index 47.9 -2.5% 

• ISE Sentiment Index 94.0 +4.0 points
  

• Total Put/Call .82 -10.9%

• NYSE Arms .54 -59.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 95.35 -3.8%
  

• US Energy High-Yield OAS 468.84 -1.8%
• Bloomberg TRACE # Distressed Bonds Traded 385.0 +8.0
  

• European Financial Sector CDS Index 120.39 -2.2%

• Italian/German 10Y Yld Spread 202.0 basis points +6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.12 -.83%
  

• Emerging Market CDS Index 317.22 -2.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.83 unch.
  
• Ukraine Sovereign Debt Credit Default Swap 11,106.80 +18.5%
  

• 2-Year Swap Spread 34.0 basis points -3.0 basis points
  

• TED Spread 55.5 basis points -4.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.25 basis points -1.75 basis points
  
• MBS  5/10 Treasury Spread  137.0 unch.
  
• iShares CMBS ETF 47.83 -.25%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 50.87 +.84%
• 3-Month T-Bill Yield 1.65% +7.0 basis points
  

• Yield Curve 6.0 basis points (2s/10s) -1.0 basis point
  

• China Iron Ore Spot 116.55 USD/Metric Tonne unch.

• Citi US Economic Surprise Index -71.7 +7.0 points

• Citi Eurozone Economic Surprise Index -25.8 -4.9 points
  

• Citi Emerging Markets Economic Surprise Index 25.6 +1.2 points

• 10-Year TIPS Spread 2.57 +6.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 62.2%(-.6 percentage point) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 41.9%(n/a) chance of 3.0%-3.25%.
  

US Covid-19:

• 221 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak -5/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -79.5%(+.2 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +341 open in Japan 
• China A50 Futures: Indicating +62 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

• Higher:  On gains in my tech/medical/commodity/industrial sector longs
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 75% Net Long