Stocks Substantially Higher into Afternoon on Less Hawkish Fed Hopes, Dollar Weakness, Less European/Emerging Markets/US High-Yield Debt Angst, Commodity/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume:  Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 29.2 -3.0%
• DJIA Intraday % Swing 1.60%
  
• Bloomberg Global Risk On/Risk Off Index 43.8 +1.5%

• Euro/Yen Carry Return Index 148.17 +1.24%

• Emerging Markets Currency Volatility(VXY) 12.2 -.81%

• CBOE S&P 500 Implied Correlation Index 48.4 -1.0% 

• ISE Sentiment Index 81.0 -27.0 points
  

• Total Put/Call .95 -1.0%

• NYSE Arms .55 +14.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 99.79 -4.67%
  

• US Energy High-Yield OAS 429.56 -4.8%
• Bloomberg TRACE # Distressed Bonds Traded 465.0 +15.0
  

• European Financial Sector CDS Index 138.0 -5.4%
  

• Italian/German 10Y Yld Spread 231.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 179.73 -3.8%
  

• Emerging Market CDS Index 302.20 -4.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.62 +.02%

• 2-Year Swap Spread 28.5 basis points -1.5 basis points
  

• TED Spread 41.25 basis points -9.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -66.75 basis points +1.0 basis point
  
• MBS  5/10 Treasury Spread  167.0 -3.0 basis points
  
• iShares CMBS ETF 45.97 +.14%
• Avg. Auto ABS OAS .71 +5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.64 +.42%
• 3-Month T-Bill Yield 3.35% +13.0 basis points
  

• Yield Curve -48.0 basis points (2s/10s) -3.25 basis points
  

• China Iron Ore Spot 94.60 USD/Metric Tonne +2.7%
• Dutch TTF Nat Gas(European benchmark) 169.50 euros/megawatt-hour -.24%

• Citi US Economic Surprise Index 6.30 -3.1 points

• Citi Eurozone Economic Surprise Index -.2 +.4 point
  

• Citi Emerging Markets Economic Surprise Index -4.4 -.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.36 +.36:  Growth Rate +15.8% +.1 percentage point, P/E 16.0 +.4
  
• Bloomberg US Financial Conditions Index -1.13 +33.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.28% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.24 +4.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 67.1%(+10.3 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 52.9%(+9.1 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 98 new infections/100K people(last 7 days total). 5.6%(-.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 -83.9%(-.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +108 open in Japan 
• China A50 Futures: Indicating +288 open in China

• DAX Futures: Indicating -58 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure:  75% net long