Stocks Finish Modestly Higher on Diminished Fed Rate-Hike Odds, US Economic Soft-Landing Hopes, Short-Covering, Commodity/Airline Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.1 -9.3%
• DJIA Intraday % Swing 1.47%
  
• Bloomberg Global Risk On/Risk Off Index 56.5 +.1%

• Euro/Yen Carry Return Index 145.5 -1.5%

• Emerging Markets Currency Volatility(VXY) 10.7 -.2%

• CBOE S&P 500 Implied Correlation Index 36.5 -6.7% 

• ISE Sentiment Index 114.0 +15.0
  

• Total Put/Call .96 unch.

• NYSE Arms 1.01 -24.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.0 -2.5%
  

• US Energy High-Yield OAS 359.69 -.83%
• Bloomberg TRACE # Distressed Bonds Traded 341.0 -11.0
  

• European Financial Sector CDS Index 86.48 -2.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 388.66 -5.7%
  

• Italian/German 10Y Yld Spread 184.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 109.4 -3.43%
  

• Emerging Market CDS Index 225.67 -.68%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.0 -.09%

• 2-Year Swap Spread 29.0 basis points +.5 basis point
  

• TED Spread 23.5 basis points +11.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.0 -1.0 basis point
  
• MBS  5/10 Treasury Spread  128.0 -4.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 115.0 unch.
  
• Avg. Auto ABS OAS .79 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.5 +.48%
• 3-Month T-Bill Yield 4.57% -10.0 basis points
  

• China Iron Ore Spot 122.9 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 68.0 euros/megawatt-hour +4.1%

• Citi US Economic Surprise Index -9.7 +2.1 points

• Citi Eurozone Economic Surprise Index 78.8 -.7 point
  

• Citi Emerging Markets Economic Surprise Index -16.8 +7.1 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.04 -.26:  Growth Rate +10.9% -.1 percentage point, P/E 17.4 +.2
  
• Bloomberg US Financial Conditions Index .10 +1.0 basis point
  
• Yield Curve -70.75 basis points (2s/10s) -2.75 basis points
• US Atlanta Fed GDPNow Forecast +4.07% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% -7.0 basis points: CPI YoY +6.31% -33.0 basis points
  
• 10-Year TIPS Spread 2.21 -1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 80.2%(+14.3 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 57.9%(+10.3 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 140 new infections/100K people(last 7 days total). 8.0%(+0.0 percentage points) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -72.2%(-.2 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -270 open in Japan 
• China A50 Futures: Indicating +115 open in China

• DAX Futures: Indicating +77 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long