Stocks Slightly Higher into Afternoon on Earnings Outlook Optimism, Less European Debt Angst, Short-Covering, Alt Energy/Commodity Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance:  Most Sectors Rising
  

• Volume:  Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.3 -3.4%
• DJIA Intraday % Swing .81% -4.0%
  
• Bloomberg Global Risk On/Risk Off Index 43.2 +2.9%

• Euro/Yen Carry Return Index 140.53 +.15%

• Emerging Markets Currency Volatility(VXY) 11.97 -1.2%

• CBOE S&P 500 Implied Correlation Index 44.3 -3.2% 

• ISE Sentiment Index 116.0 +10.0 points
  

• Total Put/Call .88 -10.2%

• NYSE Arms .78 +2.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 84.10 -.65%
  

• US Energy High-Yield OAS 401.30 -1.5%
• Bloomberg TRACE # Distressed Bonds Traded 344.0 +3.0
  

• European Financial Sector CDS Index 117.30 -1.7%

• Italian/German 10Y Yld Spread 232.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 138.64 -3.4%
  

• Emerging Market CDS Index 308.66 -4.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.81 +.15%
  
• Ukraine Sovereign Debt Credit Default Swap 9,588.9 n/a
  

• 2-Year Swap Spread 33.5 basis points -4.0 basis points
  

• TED Spread 21.75 basis points -3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.0 basis points +1.0 basis point
  
• MBS  5/10 Treasury Spread  139.0 +1.0 basis point
  
• iShares CMBS ETF 47.83 -.39%
• Avg. Auto ABS OAS .92 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.70 -.11%
• 3-Month T-Bill Yield 2.74% +4.0 basis points
  

• Yield Curve -27.25 basis points (2s/10s) -1.0 basis point
  

• China Iron Ore Spot 104.5 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 290.9 euros/megawatt-hour +8.1%

• Citi US Economic Surprise Index -22.1 -.5 point

• Citi Eurozone Economic Surprise Index -45.8 unch.
  

• Citi Emerging Markets Economic Surprise Index 25.7 -.8 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.85 +.00:  Growth Rate +15.7% +0.0 percentage point, P/E 17.5 +.1 point
  
• US Atlanta Fed GDPNow Q3 Forecast +1.38% -24.0 basis points
  
• Bloomberg US Financial Conditions Index -.30 +10.0 basis points
  

• 1-Year TIPS Spread 2.75 unch.: 10-Year TIPS Spread 2.62 +3.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 46.3%(-2.9 percentage points) chance of 3.25%-3.5%. Highest target rate probability for December 14th meeting: 45.8%(-1.2 percentage points) chance of 3.50%-3.75%.
  

US Covid-19:

• 189 new infections/100K people(last 7 days total). 10.9%(-.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 -74.1%(+.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +47 open in Japan 
• China A50 Futures: Indicating +57 open in China

• DAX Futures: Indicating -31 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 50% Net Long