Stocks Closing Substantially Higher on US Economic Soft Landing Hopes, Short-Covering, Less European/Emerging Markets/US High-Yield Debt Angst, Consumer Discretionary/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.7 -2.6%
• DJIA Intraday % Swing 2.0% +169.5%
  
• Bloomberg Global Risk On/Risk Off Index 4,569.0 +211.0 points

• Euro/Yen Carry Return Index 145.33 +.89%

• Emerging Markets Currency Volatility(VXY) 12.5 -.7%

• CBOE S&P 500 Implied Correlation Index 45.3 -.4% 

• ISE Sentiment Index 89.0 +15.0 points
  

• Total Put/Call .98 -6.8%

• NYSE Arms .52 -32.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 86.46 -5.2%
  

• US Energy High-Yield OAS 505.65 -1.9%
• Bloomberg TRACE # Distressed Bonds Traded 536.0 +9.0
  

• European Financial Sector CDS Index 112.53 -6.0%

• Italian/German 10Y Yld Spread 205.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 172.59 +1.94%
  

• Emerging Market CDS Index 360.29 -4.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.3 -.30%
  
• Ukraine Sovereign Debt Credit Default Swap 12,203.90 +23.7%
  

• 2-Year Swap Spread 24.75 basis points +.5 basis point
  

• TED Spread 30.75 basis points -14.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 basis points +.25 basis point
  
• MBS  5/10 Treasury Spread  137.0 -2.0 basis points
  
• iShares CMBS ETF 48.04 +.10%
• Avg. Auto ABS OAS .96 -4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 49.24 +.41%
• 3-Month T-Bill Yield 2.44% +13.0 basis points
  

• Yield Curve -22.25 basis points (2s/10s) -2.25 basis points
  

• China Iron Ore Spot 98.4 USD/Metric Tonne +1.1%

• Citi US Economic Surprise Index -52.0 +1.7 points

• Citi Eurozone Economic Surprise Index -55.30 +2.7 points
  

• Citi Emerging Markets Economic Surprise Index 19.6 +1.7 points

• 10-Year TIPS Spread 2.40 +2.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 51.3%(+.5 percentage point) chance of 3.0%-3.25%. Highest target rate probability for November 2nd meeting: 42.2%(-1.2 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 273 new infections/100K people(last 7 days total). 15.7%(+.0 percentage point) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -71.7%(-2.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +423 open in Japan 
• China A50 Futures: Indicating +15 open in China

• DAX Futures: Indicating -11 open in Germany

Portfolio:

• Slightly Higher:  On gains in my commodity/industrial/medical/technology sector longs
  

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

• Market Exposure:  Moved to 50% Net Long