Stocks Slightly Higher into Afternoon on Less Hawkish Fed Hopes, Diminished Earnings Outlook Fears, Technical Buying, Retail/Defense Sector Strength

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) 19.6 -2.0%
• DJIA Intraday % Swing 1.1% -2.5%
  
• Bloomberg Global Risk On/Risk Off Index 3,840.0 +195.0 points

• Euro/Yen Carry Return Index 140.63 +.92%

• Emerging Markets Currency Volatility(VXY) 11.8 +.5%

• CBOE S&P 500 Implied Correlation Index 41.0 -1.2% 

• ISE Sentiment Index 111.0 +4.0 points
  

• Total Put/Call .83 -8.8%

• NYSE Arms .68 -46.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.51 +.6%
  

• US Energy High-Yield OAS 389.38 -.17%
• Bloomberg TRACE # Distressed Bonds Traded 323.0 +4.0
  

• European Financial Sector CDS Index 102.61 +2.6%

• Italian/German 10Y Yld Spread 216.0 basis points +8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 130.80 -4.6%
  

• Emerging Market CDS Index 292.99 +2.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.73 +1.1%
  
• Ukraine Sovereign Debt Credit Default Swap 9,018.0 +4.0%
  

• 2-Year Swap Spread 30.5 basis points +.25 basis point
  

• TED Spread 32.75 basis points -7.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.0 basis points +1.75 basis points
  
• MBS  5/10 Treasury Spread  114.0 -1.0 basis point
  
• iShares CMBS ETF 48.47 -.28%
• Avg. Auto ABS OAS .96 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 49.47 -.11%
• 3-Month T-Bill Yield 2.60% +4.0 basis points
  

• Yield Curve -43.5 basis points (2s/10s) -1.75 basis points
  

• China Iron Ore Spot 106.25 USD/Metric Tonne -.2%

• Citi US Economic Surprise Index -31.5 +2.6 points

• Citi Eurozone Economic Surprise Index -49.0 -.7 point
  

• Citi Emerging Markets Economic Surprise Index 34.1 +.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.43 +.01:  Growth Rate +16.7% +1.3 percentage points, P/E 18.3 +.1 point
  
• US Atlanta Fed GDPNow Q3 Forecast +1.81% -64.0 basis points
  
• Bloomberg US Financial Conditions Index -.09 +11.0 basis points
  

• 10-Year TIPS Spread 2.45 +1.0 basis point
  
• Highest target rate probability for November 2nd FOMC meeting: 49.6%(-.2 percentage point) chance of 3.25%-3.5%. Highest target rate probability for December 14th meeting: 45.4%(+1.4 percentage points) chance of 3.50%-3.75%.
  

US Covid-19:

• 224 new infections/100K people(last 7 days total). 12.9%(+.4 percentage point) of 1/14/22 peak(1,740) +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -72.9%(+2.1 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +26 open in Japan 
• China A50 Futures: Indicating +22 open in China

• DAX Futures: Indicating +49 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/utility sector longs
  

• Disclosed Trades:  None
  

• Market Exposure:  50% net long