Stocks Modestly Higher into Final Hour on More Dovish Fed Hopes, Loosening US Financial Conditions, Short-Covering, Retail/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.2 +.5%
• DJIA Intraday % Swing .37% -62.7%
  
• Bloomberg Global Risk On/Risk Off Index 65.4 +1.6%

• Euro/Yen Carry Return Index 175.6 +.4%

• Emerging Markets Currency Volatility(VXY) 7.69 +.26%

• CBOE S&P 500 Implied Correlation Index 20.9 -.8% 

• ISE Sentiment Index 134.0 +7.0
  

• Total Put/Call .77 -19.8%

• NYSE Arms .71 -22.8% 
• NYSE Non-Block Money Flow +$81.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 65.0 -.45%
  

• US Energy High-Yield OAS 334.79 -.92%
• Bloomberg TRACE # Distressed Bonds Traded 360 +6
  

• European Financial Sector CDS Index 81.49 +.65% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 251.40 -3.5%
  

• Italian/German 10Y Yld Spread 180.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 107.0 -3.7%
  

• Emerging Market CDS Index 199.15 -.14%
• Israel Sovereign CDS 126.70 -2.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 unch.

• 2-Year SOFR Swap Spread -16.75 basis points -.25 basis point
  

• TED Spread 24.0 basis points -2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.0 +.75 basis point
  
• MBS  5/10 Treasury Spread 163.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 933.0 +9.0 basis points
  
• Avg. Auto ABS OAS 99.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 +.06%
• 3-Month T-Bill Yield 5.41% +3.0 basis points
  

• China Iron Ore Spot 128.1 USD/Metric Tonne -1.5%
• Dutch TTF Nat Gas(European benchmark) 47.0 euros/megawatt-hour -1.2%

• Citi US Economic Surprise Index 41.6 +5.3 points

• Citi Eurozone Economic Surprise Index -41.7 -.4 point

• Citi Emerging Markets Economic Surprise Index 22.7 +2.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(464 of 500 reporting) +2.5% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.03 +.03:  Growth Rate +8.7% unch., P/E 18.8 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.15% +4.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +38.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 275.62 +.18: Growth Rate +62.6% +.1 percentage point, P/E 29.7 +.1
  
• Bloomberg US Financial Conditions Index .01 -16.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .25 +22.0 basis points
  
• US Yield Curve -39.25 basis points (2s/10s) -1.5 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.20% +14.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.10% unch.
  
• 10-Year TIPS Spread 2.32 +2.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 100.0%(+2.2 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 76.0%(+11.4 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -110 open in Japan 
• China A50 Futures: Indicating +95 open in China

• DAX Futures: Indicating +60 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long