Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Seasonal Strength, Short-Covering, Tech/Healthcare 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) 13.6 -2.7%
• DJIA Intraday % Swing .59 +10.1%
  
• Bloomberg Global Risk On/Risk Off Index 67.9 -.7%

• Euro/Yen Carry Return Index 179.6 +.96%

• Emerging Markets Currency Volatility(VXY) 8.7 -.8%

• CBOE S&P 500 Implied Correlation Index 11.0 -4.1% 

• ISE Sentiment Index 169.0 -5.0 points
  

• Total Put/Call .84 -4.6%

• NYSE Arms .74 -14.9%
  
• NYSE Non-Block Money Flow -$198.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 47.9 +.8%
  

• US Energy High-Yield OAS 307.0 +.5%
• Bloomberg TRACE # Distressed Bonds Traded 181.0 -9.0
  

• European Financial Sector CDS Index 60.6 +1.6%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 148.6 +.5%
  

• Italian/German 10Y Yld Spread 114.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 70.8 +2.6%
  

• Emerging Market CDS Index 156.4 +1.4%
• Israel Sovereign CDS 104.9 +.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.08%

• 2-Year SOFR Swap Spread -19.5 basis points -.75 basis point
  

• 3M T-Bill Treasury Repo Spread -28.0 basis points -3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 unch.
  
• MBS  5/10 Treasury Spread 137.0 +7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 643.0 -1.0 basis point
  
• Avg. Auto ABS OAS 45.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.4 -.1%
• 3-Month T-Bill Yield 4.32% -1.0 basis point
  

• China Iron Ore Spot 104.5 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 41.2 euros/megawatt-hour -3.7%

• Citi US Economic Surprise Index 19.3 -6.4 points
  

• Citi Eurozone Economic Surprise Index -23.0 +2.9 points

• Citi Emerging Markets Economic Surprise Index -1.2 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(4 of 500 reporting) +9.7% +.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 270.96 +.12:  Growth Rate +13.6% +.1 percentage point, P/E 22.3 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.55% -3.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 384.87 +.01: Growth Rate +22.8% +.1 percentage point, P/E 34.8 +.1
  
• Bloomberg US Financial Conditions Index .88 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.13 -29.0 basis points
  
• US Yield Curve 15.75 basis points (2s/10s) +5.0 basis points
  
• US Atlanta Fed Q4 GDPNow Forecast +3.33% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 27.6% -4.0 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.97% unch.: CPI YoY +2.86% unch.
  
• 10-Year TIPS Spread 2.35 +4.0 basis points
  
• Highest target rate probability for Jan. 29th FOMC meeting: 81.0%(+3.8 percentage points) chance of 4.25%-4.5%. Highest target rate probability for March 19th meeting: 52.7%(-.8 percentage point) chance of 4.0%-4.25%. (current target rate is 4.5-4.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +225 open in Japan 
• China A50 Futures: Indicating -47 open in China

• DAX Futures: Indicating +35 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure: 75% Net Long