Daily Game Plan

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

TODAY’S ECONOMIC DATA:   10:00ET JOLTS Job Openings, Factory Orders, Durable Goods Orders,
Cap Goods Orders; 11:00ET Fed’s Bostic speaks; 2:00ET Fed’s Daly speaks

Highlights and News:  

• China announces measures against Google, other US firms
• US 10% tariffs on China have gone into effect, China’s response seen as measured, positioning for trade talks
• El Salvador offered to accept US criminal deportees of any nationality “for a fee”
• Benjamin Netanyahu and Trump will hold a press conference today after their meeting
• CHINA REGULATORS LOOKING AT FORMAL PROBE INTO INTEL: FT
  

World shares were choppy as markets quickly pared their initial moves lower following the latest tit-for-tat trade measures between the US and China, with analysts
saying the steps from Beijing seemed quite measured. China imposed targeted tariffs on American imports and put several US companies, including Google, on notice for possible sanctions, in a measured response to the duties on Chinese imports imposed by President
Trump. China’s modest tariffs take effect Feb. 1 and would apply to only about $20 billion of annual imports, compared with the $450 billion worth of Chinese goods subject to the Trump tariff.  China’s pushback included a 15% levy on some energy imports and
a 10% fee on American oil and agricultural equipment. Traders saw the measures as positioning for trade talks.

EQUITIES:  With 50% of companies reported,
S&P 500 4th quarter operating earnings are up 14% over the prior year, the 8th consecutive quarter of positive YoY growth.

US equity futures struggled for direction as traders worried about the economic implications of tariffs while parsing the latest batch of earnings. Futures are mixed to little changed
after China’s restrained response to US tariffs and a last-minute reprieve for Canada and Mexico. China announced an investigation into Google and put new levies on a range of US products in an apparent retaliatory move, moments after the US tariffs of 10%
kicked in.  A mixed bag of corporate results, meanwhile, did little to give the market direction. Palantir Technologies soared as much as 20% in premarket trading after the software company gave a stronger than expected forecast, citing demand for its AI products.
But Merck & Co., PepsiCo and Estée Lauder declined on disappointing outlooks. Traders are also awaiting results from Alphabet, as well as data on US factory- and durable-goods orders.

Futures ahead of the bell: E-Mini S&P +0.15%, Nasdaq +0.3%, Russell 2000 +0.1%, DJI -0.1%.

In pre-market trading, Chinese stocks listed in the US are broadly higher as analysts say Beijing’s retaliation to Donald Trump’s tariffs is relatively measured and
appears to be aimed at increasing its bargaining power at trade talks. Alibaba (BABA) +1.5%, Nio (NIO) +1%,  PDD (PDD) +2%. Fabrinet (FN) declines 6% after the engineering and manufacturing services company reported its second-quarter results that showed weakness
in the company’s datacom business. Grab (GRAB) climbs 6% as the company is weighing a takeover of rival GoTo Group. Illumina and Calvin Klein owner PVH Corp. decline after China placed the companies on a so-called blacklist of entities. Merck (MRK) falls 7%
as the company is halting shipments of its cancer-preventing Gardasil vaccine to China. PayPal (PYPL) slips 6% after posting fourth quarter results. Palantir (PLTR) rises 21% after the software company gave a forecast that is stronger than expected. PepsiCo
(PEP) slips 2% after reporting sales that missed expectations. Sirius XM (SIRI) rises 3% after Berkshire Hathaway reported insider transactions in the firm. Spotify (SPOT) advances 8% after the audio-streaming company’s first-quarter forecasts for monthly
active users, revenue and operating income topped estimates. Super Micro Computer (SMCI) rises 5% after the company said that it will give a business update on Feb. 11. Magnificent Seven: Alphabet (GOOGL) +0.7%, Amazon (AMZN) +0.5%, Apple (AAPL) -0.5%, Microsoft
(MSFT) flat, Meta Platforms (META) +0.6%, Nvidia (NVDA) +0.4% and Tesla (TSLA) +0.5%.

Mag 7 holding above the
50dma

European gauges reverse early losses to trade mixed to slightly higher as investors juggle the risk of a global trade war with a slew of positive earnings reports from
the region. Technology stocks outperform, led by Infineon after the German chipmaker raised its full-year outlook. Banks rise after BNP Paribas announced a new share buyback and higher-than-expected dividend. UBS Group AG shares dropped as concern about a
potentially substantial increase in capital requirements outweighed a $3 billion buyback and strong earnings beat. Vodafone Group Plc fell after the communications firm noted worsening conditions in Germany.  Merck & Co. halted shipments to China of its Gardasil
vaccine, threatening the future of one of its top-selling products.  France’s budget deficit narrowed by €17 billion in 2024 from the year earlier, providing the government with some relief. Stoxx 600 +0.1%, DAX +0.1%, CAC +0.3%, FTSE 100 -0.1%. Technology
+1.6%, Travel & Leisure +0.8%, Luxury +0.8%. Telecom -0.9%, Financial Services –0.7%, Energy -0.4%.

Shares in Asia pared gains in afternoon trading, as the US imposed a 10% tariff on all Chinese imports and China retaliated to the new levies. The MSCI Asia Pacific
Index ended higher by 1.1%. Trump’s earlier deals to delay 25% tariffs on Canada and Mexico for a month had given the market hope for a similar pause on the China duties, sending Hong Kong shares higher in the morning. The Hang Seng Index reversed its retreat
on the retaliatory news as traders saw the measures as mainly being positioning for trade talks. Key gauges also rose in Taiwan, Japan and South Korea. Stocks climbed in the Philippines, rebounding from a recent selloff. Shares of Indian companies with a presence
in Mexico were mostly higher after US President Trump deferred imposing tariffs on the country and Canada. Hang Seng Tech +5%, Philippines +3.5%, Hang Seng Index +2.8%, Sensex +1.8%, Kospi +1.1%, Vietnam +0.9%, Nikkei 225 +0.7%, Indonesia +0.6%, Taiwan +0.4%,
ASX 200 -0.05%, Singapore -0.1%, Thailand -0.3%.

FIXED INCOME: 
 

Treasury yields edge higher, led by the long-end, steepening the yield curve. 30-year, higher by nearly 3bp at about 4.82%, is approaching Friday’s high, and 2s10s
and 5s30s spreads also top Monday’s wides. US 10-year yield, ~2bp cheaper on the day at ~4.58%. Focal points of US session also include JOLTS job openings data at 10am New York time.

METALS: 

Gold prices held near record levels as US President Trump’s 10% tariffs on China triggered swift retaliation from Beijing, boosting haven demand. The price of gold
is holding above the $2,820 mark after reaching an all-time high on Monday as investors seek safe-haven assets amid rising volatility in bitcoin and global equities. Spot gold +0.5%, Silver +0.5%, Copper +0.4%.

ENERGY:   

Oil prices extended losses, as WTI tumbled over 2% after China hits back with retaliatory levies. As an additional 10% tariff on China imports to the U.S. took effect
Tuesday, while China announced a 15% tariff on U.S. coal and liquefied natural-gas products as well as a 10% tariff on crude oil, agricultural machinery and large-engine cars that go into effect next Monday. Iraq is planning to export at least 300,000 barrels
a day of crude oil once operations resume at a pipeline from the country’s north to Turkey that’s been shut for almost two years, its oil minister said. WTI -2.7%, Brent -1.7%, US Nat Gas -5.2%, RBOB -2.7%. 

CURRENCIES: 

In currency markets, the dollar erased earlier gains to trade lower as US tariffs on China took effect and China announced retaliatory measures. China-sensitive currencies
like the Australian and New Zealand dollars declined. Sterling slipped as focus turns to positioning ahead of the Bank of England interest-rate decision on Thursday, with the rapidly-evolving tariff situation complicating the outlook for officials. The loonie
edged higher and Mexican peso eased after rebounding on Canada and Mexico’s tariff reprieve. US$ Index -0.35%, GBPUSD -0.2%, EURUSD -0.1%, USDJPY +0.35%, AUDUSD -0.2%, NZDUSD -0.4%, USDCHF -0.1%, USDCAD -0.1%.

Spot Bitcoin -2.3%, Spot Ethereum +0.3%. Ether shed more than a quarter of its value yesterday before staging a near-full recovery.

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
• AMC Entertainment (AMC) Raised to Neutral at Roth Capital Partners
• Aptiv (APTV) Raised to Buy at HSBC; PT $77
• Grab Holdings (GRAB) Raised to Buy at HSBC; PT $5.45
• Iamgold (IMG CN) Raised to Market Perform at Raymond James; PT C$10.20
• Juniper (JNPR) Raised to Outperform at Evercore ISI; PT $40
• Loma Negra (LOMA AR) ADRs Raised to Outperform at Grupo Santander; PT $15
• Mastercard (MA) Raised to Buy at DZ Bank; PT $620
• Palantir (PLTR) Raised to Equal-Weight at Morgan Stanley; PT $95
• Princeton (BPRN) Raised to Buy at Janney Montgomery; PT $35
• TC Energy (TRP CN) Raised to Overweight at US Capital; PT C$75
• Treace Medical (TMCI) Raised to Buy at BTIG; PT $16
• Tyson (TSN) Raised to Neutral at Piper Sandler; PT $58
• Raised to Hold at HSBC; PT $66
• Downgrades
• American Woodmark (AMWD) Cut to Peerperform at Wolfe
• Amphastar (AMPH) Cut to Neutral at Piper Sandler; PT $36
• Autoliv (ALV) Cut to Hold at HSBC; PT $100
• Brilliant Earth Group (BRLT) Cut to Hold at Jefferies; PT $1.60
• Napco Security Technologies (NSSC) Cut to Hold at TD Cowen; PT $27
• Olin (OLN) Cut to Sector Perform at RBC; PT $30
• Ollie’s Bargain (OLLI) Cut to Hold at Jefferies; PT $111
• Triumph Group (TGI) Cut to Neutral at Baird; PT $26
• Initiations
• 89bio (ETNB) Rated New Outperform at Wolfe; PT $15
• AnaptysBio (ANAB) Rated New Outperform at Wolfe; PT $25
• Artemis Gold (ARTG CN) Rated New Buy at TD Cowen; PT C$20
• Catalyst Pharma (CPRX) Rated New Outperform at Baird; PT $28
• Crinetics Pharma (CRNX) Rated New Peerperform at Wolfe
• Dundee Precious Metals (DPM CN) Rated New Buy at TD Cowen; PT C$18
• Endeavour Mining (EDV CN) Rated New Buy at TD Cowen; PT C$38
• Equinox Gold (EQX CN) Rated New Hold at TD Cowen; PT C$10
• Expand Energy Corp (EXE) Rated New Strong Buy at Raymond James
• K92 Mining (KNT CN) Rated New Buy at TD Cowen; PT C$13
• OceanaGold (OGC CN) Rated New Buy at TD Cowen; PT C$5.50
• Orla Mining (OLA CN) Rated New Hold at TD Cowen; PT C$9.50
• Oruka Therapeutics Inc (ORKA) Rated New Outperform at Wolfe; PT $20
• Rambus (RMBS) Rated New Outperform at Evercore ISI; PT $71
• Terreno Realty (TRNO) Rated New Market Perform at BMO; PT $71
• Venture Global (VG) Rated New Market Perform at Bernstein; PT $20
• Vera Therapeutics (VERA) Rated New Outperform at Wolfe; PT $49
• Wesdome Gold Mines (WDO CN) Rated New Hold at TD Cowen; PT C$16
• Zenas Biopharma (ZBIO) Rated New Outperform at Wolfe; PT $19

Data sources: Bloomberg, Reuters, CQG

David Wienke