Stocks Higher into Final Hour on Rising Fed "Pivot" Expectations, Loosening US Financial Conditions, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.5 -.4%
• DJIA Intraday % Swing 1.39%
  
• Bloomberg Global Risk On/Risk Off Index 56.9 +2.6%

• Euro/Yen Carry Return Index 147.2 +.9%

• Emerging Markets Currency Volatility(VXY) 10.6 -.09%

• CBOE S&P 500 Implied Correlation Index 38.2 -.7% 

• ISE Sentiment Index 88.0 -6.0 points
  

• Total Put/Call .83 -5.7%

• NYSE Arms .73 +30.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.35 -2.8%
  

• US Energy High-Yield OAS 355.5 -2.2%
• Bloomberg TRACE # Distressed Bonds Traded 318.0 -19.0
  

• European Financial Sector CDS Index 87.81 -3.5% 
• Credit Suisse Subordinated 5Y Credit Default Swap 376.50 -.48%
  

• Italian/German 10Y Yld Spread 182.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 106.6 +.7%
  

• Emerging Market CDS Index 227.07 -1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.09 +.16%

• 2-Year Swap Spread 24.0 basis points -1.25 basis points
  

• TED Spread 18.75 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  138.0 -2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 108.0 -2.0 basis points
  
• Avg. Auto ABS OAS .72 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.5 +.02%
• 3-Month T-Bill Yield 4.65% +1.0 basis point
  

• China Iron Ore Spot 125.8 USD/Metric Tonne +.11%
• Dutch TTF Nat Gas(European benchmark) 66.0 euros/megawatt-hour -1.3%

• Citi US Economic Surprise Index -17.7 unch.

• Citi Eurozone Economic Surprise Index 84.6 -3.1 points
  

• Citi Emerging Markets Economic Surprise Index 4.0 -2.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.28 -.19:  Growth Rate +10.7% -.2 percentage point, P/E 17.6 +.4
  
• Bloomberg US Financial Conditions Index .27 +6.0 basis points
  
• Yield Curve -71.75 basis points (2s/10s) -1.0 basis point
• US Atlanta Fed GDPNow Forecast +3.53% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% unch.: CPI YoY +6.34% unch.
  
• 10-Year TIPS Spread 2.28 +5.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 88.5%(+9.4 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 57.4%(+.8 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 105 new infections/100K people(last 7 days total). 7.2%(-.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 -81.0%(-3.5 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +229 open in Japan 
• China A50 Futures: Indicating +170 open in China

• DAX Futures: Indicating +46 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure: 50% Net Long