Stocks Higher into Final Hour on Lower Long-Term Rates, Diminished European Currency Crisis Fears, Short-Covering, Commodity/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 31.3 -4.0%
• DJIA Intraday % Swing 1.9%
  
• Bloomberg Global Risk On/Risk Off Index 47.0 -4.4%

• Euro/Yen Carry Return Index 144.4 +.9%

• Emerging Markets Currency Volatility(VXY) 12.1 unch.

• CBOE S&P 500 Implied Correlation Index 49.0 -3.8% 

• ISE Sentiment Index 116.0 +5.0 points
  

• Total Put/Call 1.10 -5.3%

• NYSE Arms .73 -12.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 107.54 -3.1%
  

• US Energy High-Yield OAS 453.25 +3.3%
• Bloomberg TRACE # Distressed Bonds Traded 411.0 +15.0
  

• European Financial Sector CDS Index 151.61 +2.6%
  

• Italian/German 10Y Yld Spread 241.0 basis points -12.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 182.07 +6.8%
  

• Emerging Market CDS Index 321.83 -3.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 -1.4%

• 2-Year Swap Spread 33.0 basis points +5.0 basis points
  

• TED Spread 34.75 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  163.0 -10.0 basis points
  
• iShares CMBS ETF 45.72 +.78%
• Avg. Auto ABS OAS .64 +3.0 basis  points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.31 +.26%
• 3-Month T-Bill Yield 3.31% +2.0 basis points
  

• Yield Curve -37.75 basis points (2s/10s) -3.0 basis points
  

• China Iron Ore Spot 96.0 USD/Metric Tonne -1.1%
• Dutch TTF Nat Gas(European benchmark) 205.0 euros/megawatt-hour +10.2%

• Citi US Economic Surprise Index 15.0 +.1 point

• Citi Eurozone Economic Surprise Index -.8 +.1 point
  

• Citi Emerging Markets Economic Surprise Index -1.2 +1.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.03 -.23:  Growth Rate +15.8% -.1 percentage point, P/E 15.7 +.3
  
• Bloomberg US Financial Conditions Index -1.28 -18.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.27% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.33 -1.0 basis point
  
• Highest target rate probability for December 14th FOMC meeting: 47.7%(-12.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 45.3%(+5.1 percentage points) chance of 4.25%-4.5%.
  

US Covid-19:

• 112 new infections/100K people(last 7 days total). 6.4%(-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 -82.5%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +257 open in Japan 
• China A50 Futures: Indicating +77 open in China

• DAX Futures: Indicating +69 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 50% Net Long