Stocks Substantially Higher into Final Hour on Earnings Outlook Optimism, Technical Buying, Seasonality, Commodity/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.1 -6.3%
• DJIA Intraday % Swing 1.23%
  
• Bloomberg Global Risk On/Risk Off Index 55.4 +5.2%

• Euro/Yen Carry Return Index 145.2 +.3%

• Emerging Markets Currency Volatility(VXY) 10.6 -.2%

• CBOE S&P 500 Implied Correlation Index 44.1 -2.8% 

• ISE Sentiment Index 89.0 -21.0 points
  

• Total Put/Call 1.6 +63.3%

• NYSE Arms .52 -29.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.0 -4.9%
  

• US Energy High-Yield OAS 386.93 -2.0%
• Bloomberg TRACE # Distressed Bonds Traded 410.0 +2.0
  

• European Financial Sector CDS Index 103.88 -4.0% 
• Credit Suisse Subordinated 5Y Credit Default Swap 452.2 -.73%
  

• Italian/German 10Y Yld Spread 212.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 133.8 +.31%
  

• Emerging Market CDS Index 236.5 -4.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.4 +.05%

• 2-Year Swap Spread 31.5 basis points +.75 basis point
  

• TED Spread 44.5 basis points -3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -27.75 basis points -3.5 basis points
  
• MBS  5/10 Treasury Spread  133.0 -8.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 119.0 unch.
  
• Avg. Auto ABS OAS .97 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.03%
• 3-Month T-Bill Yield 4.30% +5.0 basis points
  

• China Iron Ore Spot 112.0 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 97.90 euros/megawatt-hour -7.4%

• Citi US Economic Surprise Index -7.90 +2.4 points

• Citi Eurozone Economic Surprise Index 68.2 +.8 point
  

• Citi Emerging Markets Economic Surprise Index -19.4 +.8 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.60 +.09:  Growth Rate +11.4% +.1 percentage point, P/E 16.9 +.2
  
• Bloomberg US Financial Conditions Index -.44 +9.0 basis points
  
• Yield Curve -54.0 basis points (2s/10s) +4.25 basis points
• US Atlanta Fed GDPNow Forecast +2.73% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.69% unch.
  
• 10-Year TIPS Spread 2.29 +5.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 52.7%(-2.1 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 48.0%(-.3 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 140 new infections/100K people(last 7 days total). 8.0%(+0.0 percentage points) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -76.4%(+2.6 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +83 open in Japan 
• China A50 Futures: Indicating +107 open in China

• DAX Futures: Indicating +47 open in Germany

Portfolio:

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