Stocks Higher into Afternoon on Diminished China Hard-Landing Fears, Dollar Weakness, Short-Covering, Commodity/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.6 -4.0%
• DJIA Intraday % Swing 1.2%
  
• Bloomberg Global Risk On/Risk Off Index 49.1 +7.2%

• Euro/Yen Carry Return Index 148.1 -.27%

• Emerging Markets Currency Volatility(VXY) 12.4 +.6%

• CBOE S&P 500 Implied Correlation Index 46.6 -5.1% 

• ISE Sentiment Index 126.0 +19.0 points
  

• Total Put/Call .77 -10.5%

• NYSE Arms .72 -16.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.33 +.27%
  

• US Energy High-Yield OAS 378.05 n/a
• Bloomberg TRACE # Distressed Bonds Traded 477.0 -17.0
  

• European Financial Sector CDS Index 107.3 -1.0% 
• Credit Suisse Subordinated 5Y Credit Default Swap 337.7 -.9%
  

• Italian/German 10Y Yld Spread 205.0 basis points +6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 158.24 -14.0%
  

• Emerging Market CDS Index 246.79 unch.
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 +1.4%

• 2-Year Swap Spread 37.0 basis points -1.0 basis point
  

• TED Spread 49.25 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -51.0 basis points -.75 basis point
  
• MBS  5/10 Treasury Spread  141.0 -2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 132.0 +2.0 basis points
  
• Avg. Auto ABS OAS 1.22 +4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.62 +.59%
• 3-Month T-Bill Yield 4.16% +2.0 basis points
  

• Yield Curve -52.5 basis points (2s/10s) -4.0 basis points
  

• China Iron Ore Spot 92.5 USD/Metric Tonne +3.1%
• Dutch TTF Nat Gas(European benchmark) 98.5 euros/megawatt-hour -13.2%

• Citi US Economic Surprise Index 8.9 -4.3 points

• Citi Eurozone Economic Surprise Index 8.9 -.1 point
  

• Citi Emerging Markets Economic Surprise Index 4.0 +2.3 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.90 -.16:  Growth Rate +11.6% -.1 percentage point, P/E 17.3 +.3
  
• Bloomberg US Financial Conditions Index -.94 +6.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.0% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.62% unch.
  
• 10-Year TIPS Spread 2.41 +1.0 basis point
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.8%(-3.0 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 47.2%(-1.3 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 -84.3%(-.6 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -153 open in Japan 
• China A50 Futures: Indicating +114 open in China

• DAX Futures: Indicating +100 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 75% Net Long