Stocks Higher into Afternoon on Less Hawkish Fed Hopes, Short-Covering, Seasonality, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.2 -.3%
• DJIA Intraday % Swing .70%
  
• Bloomberg Global Risk On/Risk Off Index 47.2 -2.1%

• Euro/Yen Carry Return Index 149.77 -.30%

• Emerging Markets Currency Volatility(VXY) 11.98 -.58%

• CBOE S&P 500 Implied Correlation Index 43.1 -1.0% 

• ISE Sentiment Index 110.0 +8.0 points
  

• Total Put/Call 1.13 -1.74%

• NYSE Arms 1.15 +3.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.3 -2.2%
  

• US Energy High-Yield OAS 361.95 -1.2%
• Bloomberg TRACE # Distressed Bonds Traded 424.0 +2.0
  

• European Financial Sector CDS Index 98.92 -2.95% 
• Credit Suisse Subordinated 5Y Credit Default Swap 351.66 -1.6%
  

• Italian/German 10Y Yld Spread 188.0 basis points -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 151.3 -2.7%
  

• Emerging Market CDS Index 240.51 -1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.68 +.36%

• 2-Year Swap Spread 31.5 basis points +1.5 basis points
  

• TED Spread 39.0 basis points -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -37.5 basis points +9.5 basis points
  
• MBS  5/10 Treasury Spread  144.0 unch.
  
• Bloomberg US Agg CMBS Avg OAS 127.0 -3.0 basis points
  
• Avg. Auto ABS OAS 1.21 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.40 +.27%
• 3-Month T-Bill Yield 4.29% +8.0 basis points
  

• Yield Curve -77.0 basis points (2s/10s) -1.0 basis point
  

• China Iron Ore Spot 95.2 USD/Metric Tonne +2.3%
• Dutch TTF Nat Gas(European benchmark) 129.5 euros/megawatt-hour +89.2%

• Citi US Economic Surprise Index 13.5 -.1 point

• Citi Eurozone Economic Surprise Index 30.1 +28.7 points
  

• Citi Emerging Markets Economic Surprise Index -.6 -.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.77 -.34:  Growth Rate +11.2% -.2 percentage point, P/E 17.5 +.2
  
• Bloomberg US Financial Conditions Index -.48 +11.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.26% +8.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.55% unch.
  
• 10-Year TIPS Spread 2.32 -1.0 basis point
  
• Highest target rate probability for Feb. 1st FOMC meeting: 51.8%(-2.5 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 41.1%(+4.9 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(+.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 -83.7%(+.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +234 open in Japan 
• China A50 Futures: Indicating +35 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long