Stocks Higher into Afternoon on Lower Long-Term Rates, China Stimulus Hopes, Short-Covering, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.2 -2.9%
• DJIA Intraday % Swing .75% -8.1%
  
• Bloomberg Global Risk On/Risk Off Index 42.7 -1.9%

• Euro/Yen Carry Return Index 140.05 -.45%

• Emerging Markets Currency Volatility(VXY) 11.8 -1.2%

• CBOE S&P 500 Implied Correlation Index 42.6 -1.6% 

• ISE Sentiment Index 137.0 +13.0 points
  

• Total Put/Call .90 unch.

• NYSE Arms 1.0 +44.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.60 -1.67%
  

• US Energy High-Yield OAS 401.52 -.03%
• Bloomberg TRACE # Distressed Bonds Traded 342.0 -2.0
  

• European Financial Sector CDS Index 115.34 -1.7%

• Italian/German 10Y Yld Spread 224.0 basis points -8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.56 -4.4%
  

• Emerging Market CDS Index 307.44 -.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.95 +.54%
  
• Ukraine Sovereign Debt Credit Default Swap 9,588.9 n/a
  

• 2-Year Swap Spread 33.0 basis points -.5 basis point
  

• TED Spread 22.75 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 basis points -1.0 basis point
  
• MBS  5/10 Treasury Spread  135.0 -4.0 basis points
  
• iShares CMBS ETF 47.71 -.08%
• Avg. Auto ABS OAS .85 -7.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.83 +.24%
• 3-Month T-Bill Yield 2.77% +3.0 basis points
  

• Yield Curve -33.75 basis points (2s/10s) -6.5 basis points
  

• China Iron Ore Spot 104.1 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 310.50 euros/megawatt-hour +6.3%

• Citi US Economic Surprise Index -19.1 +3.0 points

• Citi Eurozone Economic Surprise Index -37.2 +8.6 points
  

• Citi Emerging Markets Economic Surprise Index 24.6 -1.1 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.74 -.11:  Growth Rate +15.8% +.1 percentage point, P/E 17.6 +.1 point
  
• US Atlanta Fed GDPNow Q3 Forecast +1.38% unch.
  
• Bloomberg US Financial Conditions Index -.25 +5.0 basis points
  

• 1-Year TIPS Spread 2.60 -15.0 basis points: 10-Year TIPS Spread 2.60 -2.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 46.3%(+5.2 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 44.6%(-1.1 percentage points) chance of 3.50%-3.75%.
  

US Covid-19:

• 196 new infections/100K people(last 7 days total). 11.3%(+.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 -75.3%(-1.2 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +111 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating +19 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long