Stocks Higher into Afternoon on Less Earnings Outlook Pessimism, Diminished European/Emerging Market/US High-Yield Debt Angst, Short-Covering, Homebuilding/Industrial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 30.8 -1.9%
• DJIA Intraday % Swing 1.8%
  
• Bloomberg Global Risk On/Risk Off Index 48.9 +.6%

• Euro/Yen Carry Return Index 151.70 +.29%

• Emerging Markets Currency Volatility(VXY) 12.4 -.7%

• CBOE S&P 500 Implied Correlation Index 52.0 -1.1% 

• ISE Sentiment Index 71.0 -32.0 points
  

• Total Put/Call .94 -5.1%

• NYSE Arms .61 +96.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 95.6 -3.5%
  

• US Energy High-Yield OAS 397.93 -2.8%
• Bloomberg TRACE # Distressed Bonds Traded 427.0 unch.
  

• European Financial Sector CDS Index 136.84 -1.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 357.5 -3.4%
  

• Italian/German 10Y Yld Spread 241.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 205.89 -2.6%
  

• Emerging Market CDS Index 317.0 -2.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.80 -1.0%

• 2-Year Swap Spread 36.5 basis points -1.0 basis point
  

• TED Spread 30.25 basis points -9.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -63.5 basis points +5.0 basis points
  
• MBS  5/10 Treasury Spread  171.0 -4.0 basis points
  
• iShares CMBS ETF 45.23 +.29%
• Avg. Auto ABS OAS .88 +3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.45 +.37%
• 3-Month T-Bill Yield 3.86% +10.0 basis points
  

• Yield Curve -43.0 basis points (2s/10s) +2.75 basis points
  

• China Iron Ore Spot 92.5 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 112.2 euros/megawatt-hour -12.4%

• Citi US Economic Surprise Index 22.30 +2.9 points

• Citi Eurozone Economic Surprise Index 13.5 +5.1 points
  

• Citi Emerging Markets Economic Surprise Index -7.0 unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.82 -.13:  Growth Rate +15.2% -.1 percentage point, P/E 15.9 +.2
  
• Bloomberg US Financial Conditions Index -1.28 +13.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.81% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.13% unch.
  
• 10-Year TIPS Spread 2.42 -4.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 64.0%(-1.7 percentage points) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 54.1%(-.2 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 77 new infections/100K people(last 7 days total). 4.4%(-.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 -85.2%(+.9 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -86 open in Japan 
• China A50 Futures: Indicating -66 open in China

• DAX Futures: Indicating +51 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/commodity/medical sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long