Stocks Higher into Final Hour on Less Hawkish Fed Hopes, Diminished Earnings Outlook Fears, Short-Covering, Consumer Discretionary/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.8 +8.8%
• DJIA Intraday % Swing 1.99%
  
• Bloomberg Global Risk On/Risk Off Index 48.3 -1.9%

• Euro/Yen Carry Return Index 148.3 -.63%

• Emerging Markets Currency Volatility(VXY) 12.2 -.8%

• CBOE S&P 500 Implied Correlation Index 46.9 +3.9% 

• ISE Sentiment Index 98.0 +5.0 points
  

• Total Put/Call .79 -9.2%

• NYSE Arms .99 -13.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.9 -.6%
  

• US Energy High-Yield OAS 361.55 -.41%
• Bloomberg TRACE # Distressed Bonds Traded 406.0 -71
  

• European Financial Sector CDS Index 102.60 -2.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 328.8 -1.6%
  

• Italian/German 10Y Yld Spread 195.0 basis points -8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 141.64 -1.4%
  

• Emerging Market CDS Index 240.66 -1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 +.8%

• 2-Year Swap Spread 33.25 basis points -2.25 basis points
  

• TED Spread 42.75 basis points -2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -52.25 basis points -1.25 basis points
  
• MBS  5/10 Treasury Spread  146.0 unch.
  
• Bloomberg US Agg CMBS Avg OAS 132.0 unch.
  
• Avg. Auto ABS OAS 1.22 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.55 -.01%
• 3-Month T-Bill Yield 4.15% -2.0 basis points
  

• Yield Curve -57.5 basis points (2s/10s) -3.5 basis points
  

• China Iron Ore Spot 96.1 USD/Metric Tonne +1.1%
• Dutch TTF Nat Gas(European benchmark) 121.5 euros/megawatt-hour +6.9%

• Citi US Economic Surprise Index 10.8 +2.4 points

• Citi Eurozone Economic Surprise Index 17.6 +5.1 points
  

• Citi Emerging Markets Economic Surprise Index -.4 -3.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.71 -.16:  Growth Rate +11.4% -.2 percentage point, P/E 17.3 unch.
  
• Bloomberg US Financial Conditions Index -.87 -10.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.0% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.60% -2.0 basis points
  
• 10-Year TIPS Spread 2.37 -2.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.7%(+3.2 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 47.7%(+1.2 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 -84.4%(+.6 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +45 open in Japan 
• China A50 Futures: Indicating +57 open in China

• DAX Futures: Indicating -94 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 75% Net Long