Daily Game Plan

by Contributor
on February 12, 2025

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

TODAY’S ECONOMIC DATA:  8:30ET *CPI, Core CPI*, Hourly Earnings; 10:00ET Fed’s Powell testifies before House
committee; 12:00ET Fed’s Bostic speaks; 1:00ET 10-Year Note Auction; 2:00ET Federal Budget Balance; 5:05ET Fed’s Waller speaks

Highlights and News:  

  • Apple Partners With Alibaba to Develop AI Features for iPhone Users in China
  • A senior Israeli official estimated this morning that only three hostages will be released on Saturday
  • Coast Guard intercepts 132 Haitians on boat south of Florida Keys, sends them back home
  • Japanese companies ban DeepSeek
  • Wednesdays are the best performing day this year for stocks

 

Global stocks make mild gains as investor focus turns to US inflation figures due this morning and the latest on trade tariffs. After raising steel and aluminum tariffs
to 25% earlier this week, Trump’s advisers are now finalizing plans for reciprocal tariffs. Japanese government officials asked Trump today to exempt the nation’s companies from his fresh tariffs. A Trump adviser claimed that Australia is “killing” the US
aluminum market, which could jeopardize its chances of obtaining an exemption.  Trump hailed the release of an American who had been detained in Russia, saying he hoped the move would allow the two nations to work toward ending the war in Ukraine. The Kremlin
said the US will release a Russian in return. A senior Israeli official estimated this morning that three hostages will be released on Saturday, trying to reduce the time for the release of all nine who are alive.

 

EQUITIES:  

US equity futures traded in a narrow range overnight as traders brace for key inflation data for clues on the outlook for interest-rate cuts. CPI is expected to show a 0.3% rise in January
after December’s 0.4% increase, according to a Reuters poll. A print of 0.4% or more would send the S&P 500 down as much as 2%, JPMorgan warned. Attention will also be on Fed Chair Powell’s second day of testimony before Congress later in the day. Trump says
this morning that interest rates should be lower and would go hand in hand with upcoming tariffs.

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

In pre-market trading, Super Micro Computer (SMCI) jumps 10% after giving an aggressive long-term revenue outlook and saying it “believes” it will meet a Nasdaq Inc.
deadline to file audited financial results. Confluent (CFLT) gains 14% after the application software company reported fourth-quarter results that beat expectations. CVS Health (CVS) jumps 10% after its fourth-quarter profit beat Wall Street expectations.
Edwards Lifesciences (EW) gains 4% after the maker of heart valves provided a 1Q profit forecast range with a midpoint that beat estimates. Freshworks (FRSH) rises 6% after the application software company reported 4Q results above street estimates. Gilead
Sciences (GILD) gains 4% after the biopharmaceutical company’s 2025 guidance beat analysts’ estimates. Kraft Heinz (KHC) declines 3% after providing 2025 adjusted earnings per share guidance that missed the average analyst estimate. Lyft (LYFT) falls 13% after
giving a disappointing outlook for first-quarter gross bookings, warning that cold weather has hurt demand for ride hails and bike rentals. OneStream (OS) tumbles 19% after the application software company reported a sequential slowdown in key metrics. Teradata
(TDC) falls 13% after the infrastructure software company gave a weaker than expected outlook. Upstart (UPST) soars 26% after the AI lending marketplace reported stronger than expected fourth-quarter results and provided an upbeat outlook. Tesla is leading
gains for the Magnificent Seven, +1.6%.

European gauges fluctuate in cautious trading ahead of US inflation numbers.  The Stoxx 600 rises for a third day, setting a new intraday record. European stocks were
supported by positive earnings news, with Heineken NV surging 13% as the brewer reported strong demand for premium brands and a share buyback. ABN Amro Bank NV jumped more than 8% after its net interest income beat estimates. In the UK, Chancellor Rachel Reeves
faces a new risk of having to make spending cuts after the UK government’s fiscal watchdog downgraded its growth forecast. The BOE estimates there is a 40% chance that Britain is already in a technical recession. Stoxx 600 +0.1%, DAX +0.3%, CAC +0.1%, FTSE
~flat. Food & Beverage +1.2%, Banks +1%, Real Estate +0.8%. Energy -0.7%, Healthcare -0.3%, Utilities -0.3%.

Shares in Asia rose, led by gains in Chinese and Hong Kong stocks on continued optimism about artificial intelligence. Alibaba Group surged over 8% after the Information
reported that Apple is working with the firm to roll out artificial intelligence features in China.  The MSCI Asia Pacific Index gained 0.3%, with Alibaba and Tencent among the biggest boosts. Strategists from Morgan Stanley, JPMorgan and UBS expect further
gains in Chinese stocks, driven by DeepSeek. Chinese medical equipment makers rose as Citigroup says it’s constructive on the sector. Indonesia’s key equity gauge rebounded after falling to a three-year low on Tuesday.  Shares of South Korean defense contractors
and shipbuilders rise on a report that the nation seeks to establish a policy fund for defense ventures. Hang Seng Index +2.6%, Indonesia +1.7%, CSI 33 +0.95%, Philippines +0.95%, ASX 200 +0.6%, Nikkei 225 +0.4%, Kospi +0.4%, Singapore +0.4%. Vietnam -0.1%,
Sensex -0.15%, Taiwan -0.4%.   

FIXED INCOME: 
 

Treasuries are steady as traders await January CPI data. A busy event slate includes $42 billion 10-year note sale, following strong demand for Tuesday’s 3-year note
auction. 10-year yield is ~0.5bp higher on the day near 4.45%. Curve spreads are narrowly mixed after steepening over past two sessions. Japan’s five-year note yield climbed to 1% for the first time since 2008. 

 

METALS: 

Gold prices eased from record highs, weighed by Federal Reserve Chair Jerome Powell’s hawkish comments, while focus shifted to US inflation data. The Bureau of Labor
Statistics figures are forecast to show the consumer price index, excluding food and energy, rose 0.3% in January. That would be the fifth time in the last six months that this pace of core inflation was sustained, supporting the Fed’s stance to hold the line
on rates for now. Spot gold -0.6%, Silver -0.4%, Copper +0.4%.

 

 

ENERGY:   

 

Oil dropped after an industry report indicated a large increase in US crude stockpiles. US crude inventories jumped by 9 million barrels last week, the API reported.
That would be the biggest increase in a year if confirmed by the EIA today. The market will be watching official figures to see if inflows from Canada climbed further. Traders are also awaiting a monthly update to forecasts from OPEC+ due later today. Meanwhile,
the US intensified efforts to broker a peace deal between Moscow and Kyiv.  European natural gas prices declined due to hopes of a potential peace deal between Russia and Ukraine. Traders are also watching discussions in Brussels about a potential price cap
for gas. WTI -1.1%, Brent -0.9%, US Nat Gas -0.2%, RBOB -0.3%. 

 

CURRENCIES: 

In currency markets, the yen weakened for a third day, the worst performer among its Group-of-10 peers, on concerns over President Trump’s trade-tariff measures.
Bank of Japan Governor Kazuo Ueda told parliamentarians the central bank is closely watching the US measures, but it’s hard to discern their impact. The US$ Index fluctuates ahead of US inflation data and Fed Chair Jerome Powell’s testimony to the House Financial
Services panel. The Reserve Bank of India intervened in the foreign exchange market this week to curb speculation in the rupee, surprising traders who expected a more hands-off approach from the new governor. US$ Index -0.01%, GBPUSD -0.02%, EURUSD +0.1%,
USDJPY +0.7%, AUDUSD -0.3%, NZDUSD -0.2%, USDCHF -0.2%, USDCAD +0.1%, USDMXN +0.01%, USDCAD +0.05%.

 

 

Spot Bitcoin -0.5%, Spot Ethereum +0.3%.

 

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
    • Compass Minerals (CMP) Raised to Overweight at JPMorgan; PT $15
    • Crispr Therapeutics (CRSP) Raised to Hold at TD Cowen; PT $35
    • EOG Resources (EOG) Raised to Outperform at RBC; PT $155
    • ERO Copper (ERO CN) Raised to Buy at TD Cowen; PT C$23
    • GAP Airports (GAPB MM) ADRs Raised to Hold at Jefferies; PT $210
    • Mercury General (MCY) Raised to Strong Buy at Raymond James; PT $80
    • NXP Semi (NXPI) Raised to Overweight at Morgan Stanley
    • Santander (SAN SM) Brasil ADRs Raised to Neutral at Goldman; PT $4.70
    • Upstart (UPST) Raised to Neutral at JPMorgan; PT $79
      • Raised to Buy at B Riley; PT $105
  • Downgrades
    • Axcelis Technologies (ACLS) Cut to Market Perform at William Blair
    • BayCom Corp (BCML) Cut to Market Perform at Hovde Group; PT $31
    • Bradesco (BBDC4 BZ) ADRs Cut to Sell at Goldman; PT $2
    • Endeavor Group (EDR) Cut to Sell at Seaport Global Securities
    • Fidelity National (FIS) Cut to Neutral at Susquehanna; PT $81
    • Fluence Energy (FLNC) Cut to Neutral at Roth Capital Partners; PT $6.50
      • Cut to Peerperform at Wolfe
      • Cut to Sector Perform at RBC; PT $7
    • Inhibikase Therapeutics (IKT) Cut to Neutral at HC Wainwright
    • On Holding (ONON) Cut to Neutral at Goldman; PT $57
    • OneStream (OS) Cut to Neutral at JPMorgan; PT $26
    • OppFi (OPFI) Cut to Market Perform at JMP
    • PPG Industries (PPG) Cut to Neutral at JPMorgan; PT $115
    • Staar Surgical (STAA) Cut to Neutral at BTIG
      • Cut to Neutral at Mizuho Securities; PT $17
      • Cut to Market Perform at William Blair
    • Tempus AI (TEM) Cut to Market Perform at William Blair
    • Third Harmonic Bio (THRD) Cut to Equal-Weight at Morgan Stanley; PT $5
    • TKO (TKO) Cut to Neutral at Seaport Global Securities
  • Initiations
    • AstraZeneca (AZN LN) ADRs Reinstated Overweight at Morgan Stanley; PT $90
    • Blaize Holdings (BZAI) Rated New Buy at DA Davidson; PT $10
    • Capital Power (CPX CN) Rated New Buy at Janney Montgomery; PT C$71
    • CleanSpark (CLSK) Rated New Buy at Needham; PT $20
    • Exodus Movement (EXOD) Rated New Buy at Compass Point; PT $70
    • GSK (GSK LN) ADRs Reinstated Underweight at Morgan Stanley; PT $36
    • Instacart (CART) Rated New Buy at Seaport Global Securities; PT $62
    • IsoEnergy (ISO CN) Rated New Outperform at National Bank; PT C$4.50
    • Kraken Sonar (PNG CN) Rated New Buy at Desjardins; PT C$3.60
    • Lucid (LCID) Rated New Buy at Benchmark; PT $5
    • Novartis (NOVN SW) ADRs Reinstated Underweight at Morgan Stanley; PT $100
    • Novo (NOVOB DC) ADRs Reinstated Equal-Weight at Morgan Stanley; PT $99
    • ProQR Therapeutics (PRQR) Rated New Buy at Jones; PT $11
    • Ralph Lauren (RL) Rated New Buy at Needham; PT $310
    • Rapid Micro (RPID) Rated New Overweight at KeyBanc; PT $8
    • Roche (ROG SW) ADRs Reinstated Equal-Weight at Morgan Stanley; PT $42
    • Tesla (TSLA) Rated New Buy at Benchmark; PT $475
    • TGS (TGSU2 AR) ADRs Rated New Buy at Citi; PT $35
    • Uranium Energy (UEC) Rated New Outperform at National Bank; PT $10
    • Uranium Royalty (URC CN) Rated New Sector Perform at National Bank
    • VF Corp (VFC) Rated New Buy at Needham; PT $28
    • Vita Coco (COCO) Rated New Buy at William O’Neil
    • Volaris (VOLARA MM) ADRs Rated New Outperform at Itau BBA; PT $12

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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