Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, Less Hawkish Fed Hopes, Short-Covering, Energy/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 33.9 +.7%
• DJIA Intraday % Swing 1.09%
  
• Bloomberg Global Risk On/Risk Off Index 48.3 +.1%

• Euro/Yen Carry Return Index 146.80 +.6%

• Emerging Markets Currency Volatility(VXY) 12.7 +.32%

• CBOE S&P 500 Implied Correlation Index 52.1 -.42% 

• ISE Sentiment Index 115.0 +17.0 points
  

• Total Put/Call .94 -1.0%

• NYSE Arms .77 -10.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 102.72 -.32%
  

• US Energy High-Yield OAS 425.94 +1.08%
• Bloomberg TRACE # Distressed Bonds Traded 408.0 -22.0
  

• European Financial Sector CDS Index 148.36 -.8% 
• Credit Suisse Subordinated 5Y Credit Default Swap 440.0 +2.1%
  

• Italian/German 10Y Yld Spread 242.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 200.05 +3.2%
  

• Emerging Market CDS Index 324.60 +.52%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.2 -.22%

• 2-Year Swap Spread 32.75 basis points +1.0 basis point
  

• TED Spread 31.0 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -70.25 basis points -5.75 basis points
  
• MBS  5/10 Treasury Spread  181.0 +5.0 basis points
  
• iShares CMBS ETF 45.51 -.07%
• Avg. Auto ABS OAS .81 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.26 -.10%
• 3-Month T-Bill Yield 3.60% +18.0 basis points
  

• Yield Curve -38.75 basis points (2s/10s) -2.5 basis points
  

• China Iron Ore Spot 93.45 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 159.9 euros/megawatt-hour +2.0%

• Citi US Economic Surprise Index 5.30 +.2 point

• Citi Eurozone Economic Surprise Index 4.50 +2.5 points
  

• Citi Emerging Markets Economic Surprise Index -3.9 -1.0 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 235.57 n/a:  Growth Rate +15.4% n/a, P/E 15.2 n/a
  
• Bloomberg US Financial Conditions Index -1.30 +15.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.89% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.31 -1.0 basis point
  
• Highest target rate probability for December 14th FOMC meeting: 54.2%(-6.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 52.6%(-7.1 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(+.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 -84.5%(-.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +18 open in Japan 
• China A50 Futures: Indicating -124 open in China

• DAX Futures: Indicating +41 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/medical sector longs
  

• Disclosed Trades:  None
  

• Market Exposure:  25% Net Long