Stocks Rising into Final Hour on Senate Political Pressure on Fed, Dollar Decline, Less European/Emerging Market/US High-Yield Debt Angst, Consumer Discretionary/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 28.7 -3.8%
• DJIA Intraday % Swing 1.2%
  
• Bloomberg Global Risk On/Risk Off Index 48.2 -3.3%

• Euro/Yen Carry Return Index 152.19 +.25%

• Emerging Markets Currency Volatility(VXY) 13.0 +1.0%

• CBOE S&P 500 Implied Correlation Index 53.0 -.4% 

• ISE Sentiment Index 93.0 -12.0 points
  

• Total Put/Call .82 -14.6%

• NYSE Arms 1.15 +18.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.40 -2.2%
  

• US Energy High-Yield OAS 382.69 -.29%
• Bloomberg TRACE # Distressed Bonds Traded 445.0 +1.0
  

• European Financial Sector CDS Index 130.6 -1.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 347.14 -2.2%
  

• Italian/German 10Y Yld Spread 221.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 231.62 +2.3%
  

• Emerging Market CDS Index 303.45 -2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.21 -.33%

• 2-Year Swap Spread 36.0 basis points -.5 basis point
  

• TED Spread 35.5 basis points -6.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -57.5 basis points +2.25 basis points
  
• MBS  5/10 Treasury Spread  171.0 -3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 124.0 +2.0 basis points
  
• Avg. Auto ABS OAS .97 +5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.37 +.37%
• 3-Month T-Bill Yield 4.0% unch.
  

• Yield Curve -37.5 basis points (2s/10s) -9.25 basis points
  

• China Iron Ore Spot 89.50 USD/Metric Tonne -2.1%
• Dutch TTF Nat Gas(European benchmark) 100.0 euros/megawatt-hour +.8%

• Citi US Economic Surprise Index 16.3 -4.4 points

• Citi Eurozone Economic Surprise Index 10.3 +.7 point
  

• Citi Emerging Markets Economic Surprise Index 4.5 +3.1 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 233.50 -.10:  Growth Rate +14.7% -.1 percentage point, P/E 16.5 +.3
  
• Bloomberg US Financial Conditions Index -1.15 +8.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.85% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.11% -3.0 basis points
  
• 10-Year TIPS Spread 2.53 -7.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 50.5%(-4.4 percentage points) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 49.5%(-.9 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 70 new infections/100K people(last 7 days total). 4.0%(-.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 -85.0%(+1.1 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +255 open in Japan 
• China A50 Futures: Indicating +52 open in China

• DAX Futures: Indicating +17 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 75% Net Long