Stocks Reversing Slightly Higher into Afternoon on Stable Long-Term Rates, Loosening US Financial Conditions, Short-Covering, Retail/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.7 -4.2%
• DJIA Intraday % Swing .42% -26.6%
  
• Bloomberg Global Risk On/Risk Off Index 65.8 -.3%

• Euro/Yen Carry Return Index 174.4 -.31%

• Emerging Markets Currency Volatility(VXY) 7.7 unch.

• CBOE S&P 500 Implied Correlation Index 19.1 -1.2% 

• ISE Sentiment Index 147.0 +40.0
  

• Total Put/Call .84 -13.4%

• NYSE Arms 1.05 -37.5% 
• NYSE Non-Block Money Flow +$161.1M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 65.0 -.41%
  

• US Energy High-Yield OAS 346.28 -1.3%
• Bloomberg TRACE # Distressed Bonds Traded 344 -2
  

• European Financial Sector CDS Index 81.1 -1.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 251.8 -1.0%
  

• Italian/German 10Y Yld Spread 177.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 106.9 -.06%
  

• Emerging Market CDS Index 194.03 -2.3%
• Israel Sovereign CDS 127.4 +1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.26 +.24%

• 2-Year SOFR Swap Spread -18.5 basis points -1.25 basis points
  

• TED Spread 23.75 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 +1.75 basis points
  
• MBS  5/10 Treasury Spread 158.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 943.0 +1.0 basis point
  
• Avg. Auto ABS OAS 96.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 -.03%
• 3-Month T-Bill Yield 5.39% -1.0 basis point
  

• China Iron Ore Spot 129.1 USD/Metric Tonne +.46%
• Dutch TTF Nat Gas(European benchmark) 45.06 euros/megawatt-hour -1.7%

• Citi US Economic Surprise Index 37.4 +3.2 points

• Citi Eurozone Economic Surprise Index -39.0 +1.5 points

• Citi Emerging Markets Economic Surprise Index 22.4 +.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(471 of 500 reporting) +2.6% -.3 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.92 +.13:  Growth Rate +9.1% +.1 percentage point, P/E 18.7 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.15% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +38.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 276.62 +.77: Growth Rate +63.2% +.5 percentage point, P/E 29.6 +.1
  
• Bloomberg US Financial Conditions Index .27 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .21 -7.0 basis points
  
• US Yield Curve -46.25 basis points (2s/10s) -7.0 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +1.97% -23.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.10% unch.
  
• 10-Year TIPS Spread 2.30 +1.0 basis point
  
• 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: 72.0%(+5.5 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -30 open in Japan 
• China A50 Futures: Indicating +53 open in China

• DAX Futures: Indicating +70 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long