Daily Game Plan

by Contributor
on January 23, 2025

TODAY’S GAME PLAN:  from the trading
desk, this is not research

TODAY’S ECONOMIC DATA:  8:30ET Jobless Claims; 11:00ET Kansas City Fed Mfg Activity, Trump speaks via video to World
Economic Forum; 1:00ET 10-Year TIPS Auction

Highlights and News:  

  • NATO’s Rutte supports Trump’s pressure campaign against Russia to halt the war
  • US South is grappling with its worst snowstorm in 130 years, with up to 10 inches falling in Louisiana and Florida
  • CHINA WILLING TO PROMOTE HEALTHY DEVELOPMENT OF TIES WITH US
  • Trump Minimizes Security Threat From TikTok
  • Secretary of State Marco Rubio plans to travel to Panama next week

 

World stocks fluctuated as markets waited for further pledges on global trade from President Trump. Markets take a breather a three-day rally that had taken US and
European stocks to within striking distance of all-time highs. The World Trade Organization chief said today that any tit-for-tat trade wars would have catastrophic consequences for global growth.  Bank of Japan is widely expected to raise interest rates at
the end of a two-day meeting on Friday. Rate decisions from the US Federal Reserve, Bank of Canada and European Central Bank are scheduled for next week.      

 

EQUITIES:  

US equity futures are lower, weighed down by a premarket pullback in chipmakers after Nvidia supplier SK Hynix’s record quarterly results failed to impress. President Trump downplayed
the risk posed by TikTok in a Fox News interview. He suggested that all Chinese-made electronics may carry a spying risk, and said TikTok was not the most serious. The focus is now on Trump’s speech at the World Economic Forum in Davos later today for more
insight into his trade policy. Amazon said it will close its warehouses in Quebec, with a loss of about 1,700 jobs, while Tesla plans hefty price hikes on all its EV models sold in Canada. 

Futures ahead of the bell: E-Mini S&P -0.2%, Nasdaq -0.5%, Russell 2000 -0.6%, DJI +0.05%.

In pre-market trading, American Airlines (AAL) slides 8% after forecasting a surprise first-quarter loss. expected loss in the first quarter. AST Spacemobile (ASTS)
drops 15% after pricing a convertible notes sale. Electronic Arts (EA) plunges 14% after the video-game company cut its full-year net bookings guidance. Elevance Health (ELV) rises 5% after the health insurer increased its quarterly dividend. GE Aerospace
(GE) climbs 5% after the company reported adjusted earnings per share for the fourth quarter that topped Wall Street expectations and announced plans to buy back $7 billion of stock. Plexus (PLXS) falls 9% after the electronics manufacturing services company
forecast revenue for the second quarter below the average analyst estimate. Vertical Aerospace (EVTL) tumbles 31% after the aerospace company announced that it has commenced an underwritten public offering of $75 million of units.

European gauges recoup early losses to trade marginally higher as a softer US tariff stance boosted sentiment corporate earnings kicked into high gear. The Stoxx 600
is near the highs of the day, with banks and real estate leading gains, while technology lags. Swedbank AB hit a record high on stronger-than-expected lending profits, Puma SE plunged 21% after the German sportswear maker missed earnings estimates. Associated
British Foods slid ~3% as it lowered sales growth guidance, citing weak UK consumer sentiment. Stoxx 600 +0.15%, DAX +0.3%, CAC +0.4%, FTSE 100 +0.15%. Banks +0.8%, Real Estate +0.7%, Healthcare +0.5%. Technology -1.5%, Media -0.8%.

Shares in Asia were mixed, with the MSCI Asia Pacific index ending little changed. Chinese shares gained after officials encouraged local mutual funds and insurers
to boost their stock purchases in the government’s latest initiative to shore up its ailing equity market. Large state-owned insurers must invest 30% of their new policy premiums. The CSI 300 Index rose as much as 1.8% in early trading as the announcements
were made, but later pared gains to close up just 0.2%. In Korea, SK Hynix fell even after reporting record-breaking quarterly earnings, as investors were unimpressed due to ongoing stagnant demand for smartphones and uncertainties regarding AI spending. Vietnam
+1.4%, Nikkei 225 +0.8%, Singapore +0.7%, Shanghai Composite +0.5%, Philippines +0.5%, Sensex +0.15%. Hang Seng Index -0.4%, ASX 200 -0.6%, Kospi -1.2%, Thailand -1.3%.

FIXED INCOME: 
 

Treasuries ease, with US 10-year yields rising 3 bps to 4.64%. The front end is little changed, with the 2s10s curve steeper by 2bps. IG corporate new-issue slate
is expected to include more financial offerings; five names priced $5.9b on Wednesday. Treasury’s $20b 10-year TIPS new issue today is record size and may draw highest yield since 2009.

 

 

METALS: 

Gold edged lower after hitting a two-month high as investors awaited US jobs data and updates on President Trump’s trade tariffs. Uncertainty over Trump’s global
relations and potential impacts on growth and inflation continued to support haven demand. Spot gold -0.4%, Silver -1.3%, Copper -0.5%.

 

 

ENERGY:   

 

Oil inched higher after an industry report pointed to the first gain in US crude stockpiles since mid-November. US crude inventories rose by 1 million barrels last
week, the API reported. That would be the first increase in nine weeks if confirmed by the EIA today. Oil refiners across Asia are cutting or considering cutting run rates due to US sanctions on Russia, with some margins even turning negative. WTI +0.3%, Brent
+0.3%, US Nat Gas +0.3%, RBOB +0.8%

 

CURRENCIES: 

In currency markets, the dollar traded in narrow ranges against major peers in the absence of concrete announcements on tariffs from President Trump. Loonie and peso
are broadly steady after President Trump stays quiet about tariffs in a Fox News interview. The yen inches higher as the BOJ kicked off a two-day policy meeting, with some help from a Nikkei report that said the Bank of Japan is set to raise rates tomorrow.
The Norwegian krone fell modestly after the Norges Bank left interest rates on hold as expected and stuck with its guidance for a reduction in March. The Bank of Canada is seen as likely to reduce rates by a quarter point next Wednesday. The ECB is widely
expected to cut rates by a quarter point next Thursday.  US$ Index +0.1%, GBPUSD -0.02%, EURUSD -0.1%, USDJPY -0.2%, AUDUSD -0.1%, NZDUSD -0.05%, USDCHF +0.1%, USDCAD +0.2%.    

 

 

Spot Bitcoin -2.3%, Spot Ethereum -1.5%. Bitcoin’s market capitalization is officially above $2 trillion, doubling in just eleven months. Ether has struggled to keep
pace with Bitcoin, rising 40% over the past year to its rival’s 160%. Now its founder is backing a new startup that hopes to market it as the best crypto for Wall Street.

 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

  • Upgrades
    • American Electric Power (AEP) Raised to Buy at Guggenheim
    • Aptiv (APTV) Raised to Neutral at Piper Sandler; PT $65
    • Birchcliff Energy (BIR CN) Raised to Buy at TD Cowen; PT C$7
      • Raised to Sector Perform at Peters & Co
      • Raised to Outperform at National Bank; PT C$8
    • Boot Barn (BOOT) Raised to Overweight at KeyBanc; PT $190
    • DTE Energy (DTE) Raised to Buy at Guggenheim
    • Evergy (EVRG) Raised to Buy at Guggenheim
    • Exelon (EXC) Raised to Buy at Guggenheim; PT $44
    • Idacorp (IDA) Raised to Buy at Guggenheim; PT $121
    • Netflix (NFLX) Raised to Neutral at Arete; PT $833
      • Raised to Outperform at Wolfe; PT $1,100
    • Northwestern (NWE) Raised to Buy at Guggenheim; PT $63
    • Option Care Health (OPCH) Raised to Buy at Jefferies; PT $35
    • Revolve Group (RVLV) Raised to Overweight at KeyBanc; PT $37
    • Trupanion (TRUP) Raised to Overweight at Piper Sandler; PT $57
  • Downgrades
    • Acushnet (GOLF) Cut to Underweight at JPMorgan; PT $64
    • AG Growth International (AFN CN) Cut to Sector Perform at RBC; PT C$45
    • American Homes (AMH) Cut to Sector Perform at Scotiabank; PT $38
    • ASML (ASML NA) ADRs Cut to Sell at Aletheia Capital; PT $525
    • Boston Beer (SAM) Cut to Neutral at Piper Sandler; PT $275
    • Casella Waste (CWST) Cut to Hold at Jefferies; PT $113
    • CenterPoint Energy (CNP) Cut to Neutral at Guggenheim; PT $33
    • CMS Energy (CMS) Cut to Neutral at Guggenheim; PT $69
    • Dentsply (XRAY) Cut to Hold at Jefferies; PT $20
    • Edison International (EIX) Cut to Neutral at Guggenheim; PT $60
    • Electronic Arts (EA) Cut to Neutral at BofA; PT $130
      • Cut to Market Perform at Raymond James
      • Cut to Market Perform at BMO; PT $145
    • FirstEnergy (FE) Cut to Peerperform at Wolfe
    • Liberty Global (LBTYA) Cut to Market Perform at Bernstein
    • Parsons (PSN) Cut to Market Perform at William Blair
    • Southern Co (SO) Cut to Neutral at Guggenheim; PT $93
    • TransAlta (TA CN) Cut to Sector Perform at Scotiabank; PT C$21
    • Veeva (VEEV) Cut to Sell at Goldman; PT $200
  • Initiations
    • Aflac (AFL) Rated New Market Perform at BMO; PT $111
    • Bright Minds Biosciences (DRUG CN) Rated New Overweight at Piper Sandler
    • CNO Financial (CNO) Rated New Market Perform at BMO; PT $38
    • Corebridge Financial (CRBG) Rated New Outperform at BMO; PT $43
    • CyberArk (CYBR) Rated New Outperform at CICC; PT $382
    • Electrovaya (ELVA CN) Rated New Strong Buy at Raymond James; PT C$6.46
    • EQB Inc (EQB CN) Rated New Buy at Jefferies; PT C$129
    • Equitable Holdings (EQH) Rated New Outperform at BMO; PT $70
    • Exact Sciences (EXAS) Rated New Overweight at Barclays
    • Exodus Movement (EXOD) Rated New Buy at HC Wainwright; PT $50
    • Globe Life (GL) Rated New Market Perform at BMO; PT $114
    • Guardant Health (GH) Rated New Overweight at Barclays
    • Guidewire (GWRE) Reinstated Buy at Goldman; PT $210
    • Innventure (INV) Rated New Buy at Roth Capital Partners; PT $16
    • Magnera Corp (MAGN) Rated New Overweight at Wells Fargo; PT $22
    • MetLife (MET) Rated New Market Perform at BMO; PT $97
    • Mobile Infrastructure (BEEP) Rated New Buy at B Riley; PT $5
    • Natera (NTRA) Rated New Overweight at Barclays
    • Philip Morris (PM) Rated New Buy at First Shanghai; PT $150
    • Primerica (PRI) Rated New Market Perform at BMO; PT $311
    • Principal Financial (PFG) Rated New Market Perform at BMO; PT $93
    • Prudential Financial (PRU) Rated New Underperform at BMO; PT $101
    • Unum (UNM) Rated New Outperform at BMO; PT $91
    • Western Copper (WRN CN) Rated New Outperform at BMO; PT C$3
    • Worksport (WKSP) Rated New Buy at HC Wainwright; PT $1.50

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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