Stocks Slightly Higher into Afternoon on China Re-Opening/Stimulus Hopes, Dollar Weakness, Short-Covering, Airline/Gambling Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.4 -2.1%
• DJIA Intraday % Swing 1.13%
  
• Bloomberg Global Risk On/Risk Off Index 53.6 -.4%

• Euro/Yen Carry Return Index 145.3 +1.7%

• Emerging Markets Currency Volatility(VXY) 10.9 -.3%

• CBOE S&P 500 Implied Correlation Index 42.9 -2.6% 

• ISE Sentiment Index 83.0 -4.0 points
  

• Total Put/Call 1.12 +14.3%

• NYSE Arms .86 -37.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.3 -2.8%
  

• US Energy High-Yield OAS 390.65 -2.5%
• Bloomberg TRACE # Distressed Bonds Traded 283.0 +15.0
  

• European Financial Sector CDS Index 93.03 -4.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.08 n/a
  

• Italian/German 10Y Yld Spread 200.0 basis points -11.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 123.60 -4.88%
  

• Emerging Market CDS Index 230.72 -1.24%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.06 unch.

• 2-Year Swap Spread 28.0 basis points -2.0 basis points
  

• TED Spread 28.0 basis points -15.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 basis points +2.5 basis points
  
• MBS  5/10 Treasury Spread  144.0 -2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 116.0 -4.0 basis points
  
• Avg. Auto ABS OAS .82 -5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.5 +.13%
• 3-Month T-Bill Yield 4.5% +15.0 basis points
  

• China Iron Ore Spot 114.5 USD/Metric Tonne -.5%
• Dutch TTF Nat Gas(European benchmark) 64.0 euros/megawatt-hour -11.5%

• Citi US Economic Surprise Index -.5 -.8 point

• Citi Eurozone Economic Surprise Index 76.6 +7.3 points
  

• Citi Emerging Markets Economic Surprise Index -23.2 -4.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.79 -.22:  Growth Rate +11.3% +.3 percentage point, P/E 16.8 +.2
  
• Bloomberg US Financial Conditions Index -.39 +13.0 basis points
  
• Yield Curve -67.25 basis points (2s/10s) -5.0 basis points
• US Atlanta Fed GDPNow Forecast +3.91% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.23 -3.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 61.4%(+1.9 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 42.0%(+1.3 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-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 -69.9%(+4.3 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +146 open in Japan 
• China A50 Futures: Indicating +193 open in China

• DAX Futures: Indicating -30 open in Germany

Portfolio:

• Lower:  On losses in my commodity/tech sector longs and emerging market shorts
  

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

• Market Exposure: 50% Net Long