Stocks Surging into Afternoon on Less Hawkish Fed Hopes, Dollar Decline, Short-Covering, Tech/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.6 -9.7%
• DJIA Intraday % Swing 1.1%
  
• Bloomberg Global Risk On/Risk Off Index 45.8 -2.5%

• Euro/Yen Carry Return Index 148.9 -1.6%

• Emerging Markets Currency Volatility(VXY) 12.1 +.3%

• CBOE S&P 500 Implied Correlation Index 47.6 -4.8% 

• ISE Sentiment Index 105.0 +18.0 points
  

• Total Put/Call .88 -12.9%

• NYSE Arms 1.32 -45.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.72 -8.8%
  

• US Energy High-Yield OAS 378.05 -1.0%
• Bloomberg TRACE # Distressed Bonds Traded 494.0 +20.0
  

• European Financial Sector CDS Index 108.4 -7.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 347.2 -8.0%
  

• Italian/German 10Y Yld Spread 199.0 basis points -13.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 184.0 +.1%
  

• Emerging Market CDS Index 248.75 -10.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.5 +1.11%

• 2-Year Swap Spread 38.0 basis points +2.75 basis points
  

• TED Spread 50.5 basis points +11.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -50.25 basis points +7.0 basis points
  
• MBS  5/10 Treasury Spread  143.0 -22.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 130.0 umch.
  
• Avg. Auto ABS OAS 1.18 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.30 +.60%
• 3-Month T-Bill Yield 4.14% -5.0 basis points
  

• Yield Curve -48.5 basis points (2s/10s) -.25 basis point
  

• China Iron Ore Spot 88.3 USD/Metric Tonne +2.3%
• Dutch TTF Nat Gas(European benchmark) 109.0 euros/megawatt-hour -3.6%

• Citi US Economic Surprise Index 13.2 -8.3 points

• Citi Eurozone Economic Surprise Index 9.0 -1.0 point
  

• Citi Emerging Markets Economic Surprise Index 1.7 -1.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.06 -.26:  Growth Rate +11.7% -.2 percentage point, P/E 17.0 +.7
  
• Bloomberg US Financial Conditions Index -1.02 -10.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.0% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% -14.0 basis points: CPI YoY +7.62% -47.0 basis points
  
• 10-Year TIPS Spread 2.40 -4.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 55.5%(+30.1 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 48.9%(+17.6 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%(+0.0 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +464 open in Japan 
• China A50 Futures: Indicating +273 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure:  Moved to 75% Net Long