Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Loosening US Financial Conditions, Technical Buying, Tech/Pharma Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.5 +3.6%
• DJIA Intraday % Swing .39% -39.0%
  
• Bloomberg Global Risk On/Risk Off Index 65.7 +1.3%

• Euro/Yen Carry Return Index 171.7 +.35%

• Emerging Markets Currency Volatility(VXY) 7.89 +.90%

• CBOE S&P 500 Implied Correlation Index 25.6 +1.5% 

• ISE Sentiment Index 102.0 -6.0
  

• Total Put/Call 1.07 +17.6%

• NYSE Arms 1.35 +10.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.20 +.76%
  

• US Energy High-Yield OAS 325.41 -.54%
• Bloomberg TRACE # Distressed Bonds Traded 378 -13
  

• European Financial Sector CDS Index 90.42 +1.0% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 262.15 +.54%
  

• Italian/German 10Y Yld Spread 191.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 122.18 -3.9%
  

• Emerging Market CDS Index 212.82 +3.15%
• Israel Sovereign CDS 131.1 -8.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.82 unch.

• 2-Year SOFR Swap Spread -14.25 basis points -1.25 basis points
  

• TED Spread 25.0 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.25 +.25 basis point
  
• MBS  5/10 Treasury Spread 171.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 907.0 -16.0 basis points
  
• Avg. Auto ABS OAS 98.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 +.1%
• 3-Month T-Bill Yield 5.42% +1.0 basis point
  

• China Iron Ore Spot 123.6 USD/Metric Tonne -.19%
• Dutch TTF Nat Gas(European benchmark) 44.8 euros/megawatt-hour -6.7%

• Citi US Economic Surprise Index 50.5 -.7 point

• Citi Eurozone Economic Surprise Index -43.4 +4.5 points

• Citi Emerging Markets Economic Surprise Index 23.0 +1.3 points
• S&P 500 Current Quarter EPS Growth Rate YoY(408 of 500 reporting) +3.0% +.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.42 -.14:  Growth Rate +8.7% -.2 percentage point, P/E 18.2 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.14% -6.0 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 273.89 +.47: Growth Rate +61.6% +.3 percentage point, P/E 27.9 +.4
  
• Bloomberg US Financial Conditions Index .08 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .04 -62.0 basis points
  
• US Yield Curve -27.25 basis points (2s/10s) +1.25 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +1.24% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% unch.
  
• 10-Year TIPS Spread 2.41 +3.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 82.9%(-8.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 65.6%(-2.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -138 open in Japan 
• China A50 Futures: Indicating -14 open in China

• DAX Futures: Indicating +58 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech//utility sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long