Stocks Reversing Higher into Final Hour on Lower Long-Term Rates, US Economic Soft-Landing Hopes, Earnings Optimism, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance:  Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.5 -1.8%
• DJIA Intraday % Swing 1.24% +32.8%
  
• Bloomberg Global Risk On/Risk Off Index 4,358.0 -183.0 points

• Euro/Yen Carry Return Index 144.40 -.20%

• Emerging Markets Currency Volatility(VXY) 12.4 +.5%

• CBOE S&P 500 Implied Correlation Index 44.3 -1.8% 

• ISE Sentiment Index 89.0 +12.0 points
  

• Total Put/Call .95 +1.06%

• NYSE Arms 1.10 -8.94%

Credit Investor Angst:

• North American Investment Grade CDS Index 84.67 -.18%
  

• US Energy High-Yield OAS 505.65 +2.0%
• Bloomberg TRACE # Distressed Bonds Traded 484.0 -30.0
  

• European Financial Sector CDS Index 119.76 -1.4%

• Italian/German 10Y Yld Spread 232.0 basis points +19.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 164.70 -3.9%
  

• Emerging Market CDS Index 354.76 +.65%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.3 +.8%
  
• Ukraine Sovereign Debt Credit Default Swap 12,550.90 +10.8%
  

• 2-Year Swap Spread 23.75 basis points +.25 basis point
  

• TED Spread 30.25 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.5 basis points -.5 basis point
  
• MBS  5/10 Treasury Spread  136.0 -3.75 basis points
  
• iShares CMBS ETF 48.14 +.54%
• Avg. Auto ABS OAS .95 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.86 -.57%
• 3-Month T-Bill Yield 2.42% -2.0 basis points
  

• Yield Curve -19.5 basis points (2s/10s) +1.0 basis point
  

• China Iron Ore Spot 98.3 USD/Metric Tonne -.3%

• Citi US Economic Surprise Index -60.0 -6.8 points

• Citi Eurozone Economic Surprise Index -61.60 unch.
  

• Citi Emerging Markets Economic Surprise Index 21.8 +.5 point

• 10-Year TIPS Spread 2.30 -8.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 48.2%(-2.5 percentage points) chance of 3.0%-3.25%. Highest target rate probability for November 2nd meeting: 45.6%(+3.5 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 266 new infections/100K people(last 7 days total). 15.3%(-.4 percentage point) of 1/14/22 peak(1,740) -7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -71.3%(+.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +7 open in Japan 
• China A50 Futures: Indicating -20 open in China

• DAX Futures: Indicating -51 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 75% Net Long