Stocks Surging into Afternoon on Less Hawkish Fed Hopes, Rising China Re-Opening Expectations, Short-Covering, Alt Energy/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.6 -1.1%
• DJIA Intraday % Swing 1.21%
  
• Bloomberg Global Risk On/Risk Off Index 48.6 +1.9%

• Euro/Yen Carry Return Index 148.5 +.28%

• Emerging Markets Currency Volatility(VXY) 11.8 -.17%

• CBOE S&P 500 Implied Correlation Index 42.8 +1.1% 

• ISE Sentiment Index 106.0 -5.0 points
  

• Total Put/Call 1.47 +42.7%

• NYSE Arms .79 +38.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.24 -3.8%
  

• US Energy High-Yield OAS 375.57 -.02%
• Bloomberg TRACE # Distressed Bonds Traded 375.0 +15.0
  

• European Financial Sector CDS Index 102.64 +2.2% 
• Credit Suisse Subordinated 5Y Credit Default Swap 453.68 +1.4%
  

• Italian/German 10Y Yld Spread 195.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 138.79 -1.94%
  

• Emerging Market CDS Index 230.36 -2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.6 +.04%

• 2-Year Swap Spread 31.5 basis points -.5 basis point
  

• TED Spread 40.0 basis points -2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -33.5 basis points +2.25 basis points
  
• MBS  5/10 Treasury Spread  146.0 +1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 127.0 unch.
  
• Avg. Auto ABS OAS 1.21 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.73 +.31%
• 3-Month T-Bill Yield 4.34% +4.0 basis points
  

• Yield Curve -72.5 basis points (2s/10s) +2.0 basis points
  

• China Iron Ore Spot 101.0 USD/Metric Tonne +1.24%
• Dutch TTF Nat Gas(European benchmark) 146.0 euros/megawatt-hour +7.2%

• Citi US Economic Surprise Index 8.9 -5.1 points

• Citi Eurozone Economic Surprise Index 32.5 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index -3.1 -5.0 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.70 -.05:  Growth Rate +11.0% -.1 percentage point, P/E 17.4 +.2
  
• Bloomberg US Financial Conditions Index -.53 +5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.26% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.49% unch.
  
• 10-Year TIPS Spread 2.32 +6.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 49.0%(-1.0 percentage point) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 42.9%(+4.4 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(+.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 -81.8%(+3.7 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +266 open in Japan 
• China A50 Futures: Indicating +228 open in China

• DAX Futures: Indicating +81 open in Germany

Portfolio:

• Higher:  On gains in my commodity/industrial/tech/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