Stocks Substantially Higher into Final Hour on Year-End Window Dressing, Short-Covering, Dollar Weakness, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume:  Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.5 -3.1%
• DJIA Intraday % Swing .82%
  
• Bloomberg Global Risk On/Risk Off Index 56.4 +.9%

• Euro/Yen Carry Return Index 146.99 -.51%

• Emerging Markets Currency Volatility(VXY) 10.9 +.5%

• CBOE S&P 500 Implied Correlation Index 44.7 -.9% 

• ISE Sentiment Index 95.0 +6.0 points
  

• Total Put/Call 1.32 -32.3%

• NYSE Arms .61 -57.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.8 -2.1%
  

• US Energy High-Yield OAS 395.8 +.61%
• Bloomberg TRACE # Distressed Bonds Traded 299.0 +1.0
  

• European Financial Sector CDS Index 100.73 -1.9% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.09 n/a
  

• Italian/German 10Y Yld Spread 209.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.56 +.55%
  

• Emerging Market CDS Index 237.88 -.87%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.04 +.86%

• 2-Year Swap Spread 30.25 basis points -1.0 basis point
  

• TED Spread 28.5 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.5 basis points +6.75 basis points
  
• MBS  5/10 Treasury Spread  140.0 -4.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 118.0 unch.
  
• Avg. Auto ABS OAS .88 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 +.11%
• 3-Month T-Bill Yield 4.39% -6.0 basis points
  

• China Iron Ore Spot 114.9 USD/Metric Tonne -.17%
• Dutch TTF Nat Gas(European benchmark) 83.8 euros/megawatt-hour +3.1%

• Citi US Economic Surprise Index -4.20 +.2 point

• Citi Eurozone Economic Surprise Index 68.1 -.6 point
  

• Citi Emerging Markets Economic Surprise Index -20.2 -1.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.73 -.14:  Growth Rate +10.8% -.1 percentage point, P/E 16.8 +.3
  
• Bloomberg US Financial Conditions Index -.29 -3.0 basis points
  
• Yield Curve -54.0 basis points (2s/10s) -6.0 basis points
• US Atlanta Fed GDPNow Forecast +3.66% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.29 +1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 62.2%(+3.7 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 46.5%(+1.2 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 154 new infections/100K people(last 7 days total). 8.9%(+.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 -74.1%(+.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +197 open in Japan 
• China A50 Futures: Indicating +117 open in China

• DAX Futures: Indicating +50 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long