Stocks Slightly Higher into Final Hour on Less Hawkish Fed Hopes, Lower Long-Term Rates, Dollar Weakness, Tech/Medical 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) 20.3 -1.3%
• DJIA Intraday % Swing 1.36%
  
• Bloomberg Global Risk On/Risk Off Index 48.5 -.3%

• Euro/Yen Carry Return Index 147.2 -.94%

• Emerging Markets Currency Volatility(VXY) 11.9 +.9%

• CBOE S&P 500 Implied Correlation Index 40.6 -3.2% 

• ISE Sentiment Index 129.0 +32.0 points
  

• Total Put/Call .97 -19.8%

• NYSE Arms 1.46 +149.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.6 -.05%
  

• US Energy High-Yield OAS 368.08 -2.2%
• Bloomberg TRACE # Distressed Bonds Traded 378.0 +3.0
  

• European Financial Sector CDS Index 96.90 -5.6% 
• Credit Suisse Subordinated 5Y Credit Default Swap 463.05 +2.1%
  

• Italian/German 10Y Yld Spread 189.0 basis points -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 131.2 -5.6%
  

• Emerging Market CDS Index 228.27 +.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.0 +.86%

• 2-Year Swap Spread 33.25 basis points +.75 basis point
  

• TED Spread 43.75 basis points +3.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -32.25 basis points +1.25 basis points
  
• MBS  5/10 Treasury Spread  136.0 -10.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 128.0 +1.0 basis point
  
• Avg. Auto ABS OAS 1.24 +3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.86 +.22%
• 3-Month T-Bill Yield 4.29% -5.0 basis points
  

• Yield Curve -72.75 basis points (2s/10s) -.25 basis point
  

• China Iron Ore Spot 102.15 USD/Metric Tonne +.25%
• Dutch TTF Nat Gas(European benchmark) 137.0 euros/megawatt-hour -6.4%

• Citi US Economic Surprise Index 9.5 +.6 point

• Citi Eurozone Economic Surprise Index 27.4 -5.1 points
  

• Citi Emerging Markets Economic Surprise Index -.8 -3.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.62 -.08:  Growth Rate +11.0% unch., P/E 17.8 +.4
  
• Bloomberg US Financial Conditions Index -.54 -3.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.84% -142.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.87% -15.0 basis points: CPI YoY +7.49% unch.
  
• 10-Year TIPS Spread 2.36 +4.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.1%(+7.7 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 46.5%(+2.6 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 -80.5%(+1.3 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -211 open in Japan 
• China A50 Futures: Indicating -1 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio:

• Slightly Higher:  On gains in my medical sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 75% Net Long