Stocks Reversing Higher into Afternoon on Dovish Fedspeak, Loosening US Financial Conditions, Earnings Optimism, Consumer Discretionary/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 20.3 -1.2%
• DJIA Intraday % Swing .53%
  
• Bloomberg Global Risk On/Risk Off Index 64.8 +1.8%

• Euro/Yen Carry Return Index 150.90 -.3%

• Emerging Markets Currency Volatility(VXY) 10.6 +.6%

• CBOE S&P 500 Implied Correlation Index 36.6 +2.2% 

• ISE Sentiment Index 96.0 -16.0 points
  

• Total Put/Call 1.07 -5.3%

• NYSE Arms .76 -15.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.2 +.7%
  

• US Energy High-Yield OAS 350.90 -.36%
• Bloomberg TRACE # Distressed Bonds Traded 329.0 +5
  

• European Financial Sector CDS Index 89.16 +1.2% 
• Credit Suisse Subordinated 5Y Credit Default Swap 397.1 -.3%
  

• Italian/German 10Y Yld Spread 187.0 basis basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 114.1 +.5%
  

• Emerging Market CDS Index 241.0 +1.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.3 +.02%

• 2-Year Swap Spread 33.5 basis points -1.0 basis point
  

• TED Spread 13.25 basis points -3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -6.5 +1.25 basis points
  
• MBS  5/10 Treasury Spread  155.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 532.0 unch.
  
• Avg. Auto ABS OAS 57.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.32%
• 3-Month T-Bill Yield 4.84% unch.
  

• China Iron Ore Spot 126.2 USD/Metric Tonne -.13%
• Dutch TTF Nat Gas(European benchmark) 46.8 euros/megawatt-hour -.6%

• Citi US Economic Surprise Index 38.1 +.5 point

• Citi Eurozone Economic Surprise Index 70.8 +11.4 points
  

• Citi Emerging Markets Economic Surprise Index 9.4 +.3 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 223.99 -1.14:  Growth Rate +1.0% -.2 percentage point, P/E 17.6 unch.
• S&P 500 Current Year Estimated Profit Margin 12.34% unch.
  
• Bloomberg US Financial Conditions Index .27 +3.0 basis points
  
• Yield Curve -84.5 basis points (2s/10s) +5.25 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.27% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.21% unch.
  
• 10-Year TIPS Spread 2.48 +6.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 63.8%(-4.6 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 55.7%(-4.1 percentage points) chance of 5.25%-5.5%.
  

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 -83.3%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +162 open in Japan 
• China A50 Futures: Indicating +101 open in China

• DAX Futures: Indicating +61 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long