Stocks Surging into Afternoon on Earnings Optimism, Less China Debt Bubble Bursting Angst, Technical Buying, Financial/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.1 -4.6%
• Bloomberg Global Risk On/Risk Off Index 3,494.0 +244.0 points

• Euro/Yen Carry Return Index 136.73 +.56%

• Emerging Markets Currency Volatility(VXY) 8.79 -.11%

• S&P 500 Implied Correlation 54.9 +.2%

• ISE Sentiment Index 110.0  +6.0 points
  

• Total Put/Call .89 +8.5%

• NYSE Arms .69 -20.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.90 -.81%
  

• US Energy High-Yield OAS 359.57 -1.4%

• European Financial Sector CDS Index 57.13 -1.2%

• Italian/German 10Y Yld Spread 104.0 +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 87.08 -6.3%
  

• Emerging Market CDS Index 180.38 -.57%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 34.74 +.17%

• 2-Year Swap Spread 14.25 +.5 basis point
  

• TED Spread 8.25 -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.5 -2.0 basis points
  
• MBS  5/10 Treasury Spread  67.25 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 71.5 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.83 +.19%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 117.0 -3.0 basis points
  

• China Iron Ore Spot 120.6 USD/Metric Tonne -.2%

• Citi US Economic Surprise Index -22.1 -2.8 points

• Citi Eurozone Economic Surprise Index -73.7 +.1 point
  

• Citi Emerging Markets Economic Surprise Index -4.3 -1.2 points

• 10-Year TIPS Spread 2.56 +6.0 basis points
• 99.5% chance of no change at Dec. 15th meeting, 94.5% chance of no change at Jan. 26th meeting

US Covid-19:

• 185 new infections/100K people(last 7 days total) -3/100K people
• 35% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +162 open in Japan 
• China A50 Futures: Indicating -56 open in China

• DAX Futures: Indicating -13 open in Germany

Portfolio:

• Higher: On gains in my tech/commodity/industrial/medical/consumer discretionary 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