Stocks Rising into Final Hour on Earnings Outlook Optimism, Trump Policy Initiatives, Short-Covering, Road & Rail/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average
  

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.8 -2.3%
• S&P 500 Intraday % Swing .42 +2.2%.
  
• Bloomberg Global Risk On/Risk Off Index 73.8 +.5%

• Euro/Yen Carry Return Index 181.4 -.27%

• Emerging Markets Currency Volatility(VXY) 8.2 -.9%

• CBOE S&P 500 Implied Correlation Index 11.5 +.7% 

• ISE Sentiment Index 172.0 +7.0 points
  

• Total Put/Call .74 -2.6%

• NYSE Arms .67 -50.7%
  
• NYSE Non-Block Money Flow -$17.9M 
  

Credit Investor Angst:

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

• US Energy High-Yield OAS 276.5 +.5%
• Bloomberg TRACE # Distressed Bonds Traded 184 -7
  

• European Financial Sector CDS Index 59.55 -.13%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 144.84 +.42%
  

• Italian/German 10Y Yld Spread 110.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 75.5 +1.0%
  

• Emerging Market CDS Index 157.1 -.4%
• Israel Sovereign CDS 89.0 +.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.97 -.15%

• 2-Year SOFR Swap Spread -16.0 basis points unch.
  

• 3M T-Bill Treasury Repo Spread 3.75 basis points unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 +1.75 basis points
  
• MBS  5/10 Treasury Spread 137.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 609.0 unch.
  
• Avg. Auto ABS OAS 43.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.1 +.08%
• 3-Month T-Bill Yield 4.32% unch.
  

• China Iron Ore Spot 103.7 USD/Metric Tonne -.01%
• Dutch TTF Nat Gas(European benchmark) 49.1 euros/megawatt-hour +.84%

• Citi US Economic Surprise Index 18.7 -1.1 point
  

• Citi Eurozone Economic Surprise Index -24.9 -.3 point

• Citi Emerging Markets Economic Surprise Index 7.9 -.2 point
• S&P 500 Current Quarter EPS Growth Rate YoY(70 of 500 reporting) +18.9% +.4 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.28 +.07:  Growth Rate +15.1% +.1 percentage point, P/E 22.2 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.25% -2.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +97.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 398.63 +1.44: Growth Rate +27.1% +.4 percentage point, P/E 34.5 -.4
  
• Bloomberg US Financial Conditions Index .87 +4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index 1.76 +1.0 basis point
  
• US Yield Curve 35.0 basis points (2s/10s) +5.0 basis points
  
• US Atlanta Fed Q4 GDPNow Forecast +2.99% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 23.4% -1.0 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.83% unch.: CPI YoY +2.84% unch.
  
• 10-Year TIPS Spread 2.45 +4.0 basis points
  
• Highest target rate probability for March 19th FOMC meeting: 73.6% (-1.6 percentage points) chance of 4.25%-4.5%. Highest target rate probability for May 7th meeting: 54.2%(-2.7 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -48 open in Japan 
• China A50 Futures: Indicating +10 open in China

• DAX Futures: Indicating +172 open in Germany

Portfolio:

• Higher: On gains in my industrial/tech/financial/utility/consumer discretionary sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  
• Market Exposure: Moved to 100% Net Long