Stocks Surging into Final Hour on Plunging Long-Term Rates, Rising Fed Rate Cut Odds, Less European/Emerging Markets/US High-Yield Debt Angst, Financial/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.1 -4.5%
• DJIA Intraday % Swing .99% +69.1%
  
• Bloomberg Global Risk On/Risk Off Index 63.2 -4.0%

• Euro/Yen Carry Return Index 174.9 +.79%

• Emerging Markets Currency Volatility(VXY) 7.67 -.65%

• CBOE S&P 500 Implied Correlation Index 21.0 -5.8% 

• ISE Sentiment Index 134.0 +6.0
  

• Total Put/Call .90 -22.4%

• NYSE Arms 1.20 -10.5% 
• NYSE Non-Block Money Flow +$316.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 64.88 -3.9%
  

• US Energy High-Yield OAS 337.8 -1.7%
• Bloomberg TRACE # Distressed Bonds Traded 354 +4
  

• European Financial Sector CDS Index 80.96 -4.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 260.5 -3.4%
  

• Italian/German 10Y Yld Spread 181.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 111.66 -3.3%
  

• Emerging Market CDS Index 201.8 -4.3%
• Israel Sovereign CDS 129.75 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 +.83%

• 2-Year SOFR Swap Spread -16.5 basis points +1.0 basis point
  

• TED Spread 26.75 basis points +2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 +.25 basis point
  
• MBS  5/10 Treasury Spread 161.0 -9.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 924.0 +10.0 basis points
  
• Avg. Auto ABS OAS 97.0 +3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 +.8%
• 3-Month T-Bill Yield 5.38% -4.0 basis points
  

• China Iron Ore Spot 130.3 USD/Metric Tonne +1.7%
• Dutch TTF Nat Gas(European benchmark) 47.6 euros/megawatt-hour -.55%

• Citi US Economic Surprise Index 36.3 -5.3 points

• Citi Eurozone Economic Surprise Index -41.3 +3.2 points

• Citi Emerging Markets Economic Surprise Index 20.7 -.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(461 of 500 reporting) +2.5% -.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.0 +.03:  Growth Rate +8.7% +.1 percentage point, P/E 18.7 +.3
  
• S&P 500 Current Year Estimated Profit Margin 12.11% -2.0 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 275.44 +.12: Growth Rate +62.5% +.1 percentage point, P/E 29.6 +.5
  
• Bloomberg US Financial Conditions Index .01 -16.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .21 -4.0 basis points
  
• US Yield Curve -37.75 basis points (2s/10s) +3.0 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.06% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% -8.0 basis points: CPI YoY +3.10% -18.0 basis points
  
• 10-Year TIPS Spread 2.30 -4.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 97.8%(+22.9 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 66.5%(-1.2 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +545 open in Japan 
• China A50 Futures: Indicating +187 open in China

• DAX Futures: Indicating +63 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long