Stocks Reversing Slightly Higher into Afternoon on Less Hawkish Fed Hopes, Diminished China Hard-Landing Fears, Less Emerging Markets Debt Angst, Commodity/Pharma Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.0 +2.3%
• DJIA Intraday % Swing .99%
  
• Bloomberg Global Risk On/Risk Off Index 49.6 -.4%

• Euro/Yen Carry Return Index 149.6 +.9%

• Emerging Markets Currency Volatility(VXY) 12.3 -.3%

• CBOE S&P 500 Implied Correlation Index 44.9 -2.0% 

• ISE Sentiment Index 96.0 -6.0 points
  

• Total Put/Call .93 +25.7%

• NYSE Arms .86 +11.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.2 -1.3%
  

• US Energy High-Yield OAS 359.65 -4.1%
• Bloomberg TRACE # Distressed Bonds Traded 477.0 unch.
  

• European Financial Sector CDS Index 105.41 -1.8% 
• Credit Suisse Subordinated 5Y Credit Default Swap 331.08 -.42%
  

• Italian/German 10Y Yld Spread 203.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 143.61 -9.3%
  

• Emerging Market CDS Index 239.23 -3.06%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.5 +2.3%

• 2-Year Swap Spread 35.5 basis points -1.5 basis points
  

• TED Spread 45.0 basis points -4.25 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 +5.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 132.0 unch.
  
• Avg. Auto ABS OAS 1.22 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.57 -.08%
• 3-Month T-Bill Yield 4.17% +1.0 basis point
  

• Yield Curve -54.0 basis points (2s/10s) -1.5 basis points
  

• China Iron Ore Spot 95.25 USD/Metric Tonne +1.8%
• Dutch TTF Nat Gas(European benchmark) 117.5 euros/megawatt-hour +20.1%

• Citi US Economic Surprise Index 8.4 -.5 point

• Citi Eurozone Economic Surprise Index 12.5 -3.6 points
  

• Citi Emerging Markets Economic Surprise Index 3.3 -.7 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.87 -.03:  Growth Rate +11.6% unch., P/E 17.3 unch.
  
• Bloomberg US Financial Conditions Index -.74 +21.0 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 2.39 -2.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 46.7%(-6.5 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 46.2%(-2.1 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 -85.0%(-.7 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +126 open in Japan 
• China A50 Futures: Indicating +41 open in China

• DAX Futures: Indicating +27 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long