Stocks Surging into Afternoon on Less Hawkish Fed Hopes, Lower Long-Term Rates, Less European/Emerging Markets/US High-Yield Debt Angst, Commodity/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 30.2 -4.6%
• DJIA Intraday % Swing 1.95%
  
• Bloomberg Global Risk On/Risk Off Index 43.2 -4.7%

• Euro/Yen Carry Return Index 146.02 unch.

• Emerging Markets Currency Volatility(VXY) 12.3 -1.2%

• CBOE S&P 500 Implied Correlation Index 48.9 +.8% 

• ISE Sentiment Index 109.0 +12.0 points
  

• Total Put/Call .94 -14.6%

• NYSE Arms .89 -4.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 104.42 -3.14%
  

• US Energy High-Yield OAS 455.06 +1.86%
• Bloomberg TRACE # Distressed Bonds Traded 450.0 +39.0
  

• European Financial Sector CDS Index 146.30 -1.6%
  

• Italian/German 10Y Yld Spread 233.0 basis points -8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 186.83 +.6%
  

• Emerging Market CDS Index 315.20 -4.75%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.59 +.41%

• 2-Year Swap Spread 30.0 basis points +.75 basis point
  

• TED Spread 50.75 basis points +5.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -67.75 basis points -1.5 basis points
  
• MBS  5/10 Treasury Spread  170.0 -3.0 basis points
  
• iShares CMBS ETF 46.17 +.91%
• Avg. Auto ABS OAS .66 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.38 +.67%
• 3-Month T-Bill Yield 3.22% -7.0 basis points
  

• Yield Curve -44.75 basis points (2s/10s) -3.0 basis points
  

• China Iron Ore Spot 92.45 USD/Metric Tonne -1.3%
• Dutch TTF Nat Gas(European benchmark) 169.0 euros/megawatt-hour -10.5%

• Citi US Economic Surprise Index 10.4 -7.5 points

• Citi Eurozone Economic Surprise Index -.6 -.8 point
  

• Citi Emerging Markets Economic Surprise Index -4.3 +.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.0 -.05:  Growth Rate +15.7% -.1 percentage point, P/E 15.6 +.2
  
• Bloomberg US Financial Conditions Index -1.49 -14.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.28% -15.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.20 +5.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 54.4%(+.5 percentage point) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 46.4%(+.8 percentage points) chance of 4.25%-4.5%.
  

US Covid-19:

• 98 new infections/100K people(last 7 days total). 5.6%(-.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 -84.1%(-.7 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +409 open in Japan 
• China A50 Futures: Indicating -30 open in China

• DAX Futures: Indicating +30 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure:  Moved to 75% net long