Stocks Reversing Higher into Afternoon on US Economic Soft Landing Hopes, Less Hawkish Fed Speak, Earnings Outlook Optimism, Tech/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.1 -1.9%
• DJIA Intraday % Swing 1.59%
  
• Bloomberg Global Risk On/Risk Off Index 61.0 +2.9%

• Euro/Yen Carry Return Index 145.8 -1.3%

• Emerging Markets Currency Volatility(VXY) 10.6 unch.

• CBOE S&P 500 Implied Correlation Index 33.8 -1.5% 

• ISE Sentiment Index 133.0 +29.0 points
  

• Total Put/Call .81 +6.1%

• NYSE Arms 1.32 +64.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.3 +.4%
  

• US Energy High-Yield OAS 350.90 +1.3%
• Bloomberg TRACE # Distressed Bonds Traded 314.0 +7.0
  

• European Financial Sector CDS Index 84.2 -.1% 
• Credit Suisse Subordinated 5Y Credit Default Swap 353.70 -1.9%
  

• Italian/German 10Y Yld Spread 188.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 104.5 +2.8%
  

• Emerging Market CDS Index 224.98 -.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.69 -.57%

• 2-Year Swap Spread 27.5 basis points +1.75 basis points
  

• TED Spread 25.25 basis points +5.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -9.75 -.75 basis point
  
• MBS  5/10 Treasury Spread  137.0 -1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 104.0 unch.
  
• Avg. Auto ABS OAS .70 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.1 +.02%
• 3-Month T-Bill Yield 4.64% unch.
  

• China Iron Ore Spot 119.0 USD/Metric Tonne -1.6%
• Dutch TTF Nat Gas(European benchmark) 55.4 euros/megawatt-hour -4.7%

• Citi US Economic Surprise Index 23.60 +1.7 points

• Citi Eurozone Economic Surprise Index 95.6 -5.0 points
  

• Citi Emerging Markets Economic Surprise Index 5.7 +2.4 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.25 +.02:  Growth Rate +.4% unch., P/E 18.4 +.1
• S&P 500 Current Year Estimated Profit Margin 12.09% +6.0 basis points
  
• Bloomberg US Financial Conditions Index .38 -2.0 basis points
  
• Yield Curve -79.25 basis points (2s/10s) +3.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.09% +142.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.44% unch.
  
• 10-Year TIPS Spread 2.32 +6.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 70.0%(+2.2 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 47.4%(-5.1 percentage points) chance of 5.0%-5.25%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(-0.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.5%(+1.4 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -165 open in Japan 
• China A50 Futures: Indicating -24 open in China

• DAX Futures: Indicating +57 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/medical/commodity sector longs and emerging market shorts
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long