Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing; 10:00ET NAHB Housing Market Index; 10:20ET Fed’s Daly speaks;
1:00ET Fed’s Barr speaks; 4:00ET TIC Flows

Highlights and News:  

• Russia is against European peacekeeping forces in Ukraine, calling it “escalatory”
• First session of Russian-US talks in Riyadh concludes; agree to appoint teams to end the conflict
• Detained Britons Craig and Lindsay Foreman are charged in Iran with espionage
• Egyptian President to arrive in Riyadh on Thursday to discuss Arab plan for Gaza reconstruction
• HAMAS SAYS IT WILL RELEASE SIX HOSTAGES ON SATURDAY  
• FDA’s food division head steps down, citing widespread cuts at the agency

World shares rose as Russian and US officials met to negotiate an end to the three-year war in Ukraine. EU Commission President Ursula von der Leyen said the region
would step up support for Ukraine as the US and Russia began bilateral talks on a prospective peace deal that Kyiv warned could not be made on its behalf. Meanwhile, Israel will start negotiations with Hamas on a second phase of the ceasefire as early as this
week, aiming to dismantle Hamas in Gaza. Global stocks have become the most popular asset class with investors, who are showing the biggest willingness to take risk in 15 years, according to a survey by Bank of America. A gauge of emerging-market equities
hit a three-month high. Chinese markets were buoyed by Monday’s rare meeting between Xi and some of its biggest business leaders. Xi stressed continuity in China’s economic development strategy, and said its private business had “broad prospects and great
promise” to create wealth and opportunity.

EQUITIES:  

US equity futures are modestly higher as markets re-open from a holiday break, while top US and Russian officials started meeting in Saudi Arabia to discuss how to end the war in Ukraine.
France’s Macron spoke separately with Trump and Zelenskiy on aligning with the US on peace talks. Fed Governor Waller said uncertainty over trade, other policies, shouldn’t paralyze rate moves. Waller said  “any imposition of tariffs will only modestly increase
prices and in a nonpersistent manner.”  Elon Musk’s xAI launched its Grok-3 chatbot which he claimed outperforms rivals including OpenAI’s GPT-4o and Google’s Gemini across math, science and coding benchmarks. New York Governor Kathy Hochul raised “serious
questions” about the future of NYC Mayor Eric Adams’ administration, citing her power to remove him as she called for a meeting with key leaders today.

Futures ahead of the bell: E-Mini S&P +0.4%, Nasdaq +0.5%, Russell 2000 +0.4%, DJI +0.2%

In pre-market trading, Intel (INTC) rises 5% as the Wall Street Journal reports that Taiwan Semiconductor Manufacturing Co. and Broadcom are mulling potential deals
that would break the US chipmaking giant in two. Constellation Brands (STZ) rises 8% after Berkshire Hathaway reported a new position in the Corona and Modelo maker. Delta Air Lines (DAL) slips about 1% after one of the company’s regional jets flipped out
of control after landing in windy, freezing conditions in Toronto on Monday. Fluor (FLR) drops 6% after the infrastructure construction company’s annual profit forecast fell short of Wall Street expectations. GeneDX Holdings (WGS) rises 22% after the genomics
testing company issued guidance for 2025. H&E Equipment Services (HEES) jumps 16% after announcing that the company received a superior proposal from Herc Holdings. Shares of Herc (HRI) fall 4%. Hims & Hers Health (HIMS) declines 1% after Morgan Stanley downgraded
the telehealth company. Solid Biosciences Inc. (SLDB) gains 94% after reporting initial clinical data from next-generation Duchenne Gene Therapy candidate SGT-003. Southwest Airlines (LUV) rises 2% after the carrier said it will cut about 1,750 jobs in its
leadership ranks to reduce expenses.

European gauges edge higher as investors assessed the outlook for defense spending and a potential ceasefire in Ukraine. On the data front, Germany’s ZEW investor expectations
rose more than expected in February.  Defense and aerospace stocks lead gains, climbing over 1% after rallying about 4.5% on Monday on signs of European moves to relax military spending limits. Among individual stocks, InterContinental Hotels Group Plc dropped
4.4% after analysts flagged that higher interest expense and capital expenditure guidance could weigh on the hotelier’s earnings expectations. Capgemini SE shares fell 8.1% after the French company gave a lower-than-expected revenue growth target for this
year. Stoxx 600 +0.4%, DAX +0.1%, CAC +0.3%, FTSE 100 +0.2%. Banks +0.9%, Industrials +0.9%, Construction +0.6%. Travel & Leisure -0.4%.

Shares in Asia were mixed after President Xi Jinping met with prominent entrepreneurs Monday. The MSCI Asia Pacific Index advanced 0.1%, with Hong-Kong listed technology
stocks leading gains. The Hang Seng Tech Index is now up more than 25% for the year. Australian shares fell amid the central bank’s decision to cut interest rates by a quarter point, and those in mainland China declined. Stocks related to new-energy storage
and lithium rose in China as the government issued guidance to promote the industry for high quality development. Defense stocks surged in South Korea and Japan on speculation European governments are set to boost military spending to protect Ukraine. Hang
Seng Tech +2.6%, Philippines +1.7%, Hang Seng Index +1.6%, Taiwan +0.7%, Kospi +0.6%, Indonesia +0.6%, Singapore +0.5%, Vietnam +0.4%, Topix +0.3%, Thailand +0.1%. Sensex -0.05%, ASX 200 -0.7%, CSI 300 -0.9%.

FIXED INCOME: 
 

Treasury yields climb as US trading restarted following Monday’s national holiday, climbing from its lowest closing level in a week and re-steepening the yield curve.
The 10-year yield rose as much as four basis points to 4.52%. European benchmark rates rose for the second consecutive day, driven by worries that increased defense expenditures in the region might require additional bond issuance.  A busy week for corporate
issuance is expected, while Treasury supply includes 20-year bond auction Wednesday.  Comments by Fed’s Waller late Monday were balanced, saying recent economic data support keeping interest rates on hold, but if inflation behaves as it did in 2024, policymakers
can get back to cutting “at some point this year.”

METALS: 

Gold extended gains to trade around $2,917 an ounce after Goldman Sachs raised its price forecast to $3,100 by year end on higher-than-expected central-bank buying
and bullion ETF inflows. Gold shipments from Singapore to the US rose to the highest level in almost three years in January amid pricing disparities in key markets. Typically, most Singaporean flows go to Asia.  Spot gold +0.7%, Silver +0.4%, Copper -1.8%.

ENERGY:   

Oil prices held steady after the US and Russia met to discuss ending the war in Ukraine. OPEC+ is considering pushing back a series of monthly supply increases due
to begin in April despite calls from Trump to lower prices. Meanwhile a drone attack on a pumping station in Russia may reduce crude exports from Kazakhstan. Following a meeting of top officials from the two powers, Russia said an expected summit between presidents
Vladimir Putin and Donald Trump is unlikely to be next week, according to Interfax. The US said one call and one meeting aren’t enough for an enduring peace.  WTI +0.7%, Brent ~flat, US Nat Gas -1.4%, RBOB +0.25%. 

CURRENCIES: 

In currency markets, the dollar strengthened, ending a three day decline after a Federal Reserve policymaker favored keeping US interest rates on hold. Fed Governor
Waller said recent economic data support keeping interest rates on hold and characterized the economy as solid, with a labor market that is in a “sweet spot.” The euro eased, with traders looking ahead to German elections this weekend that could spur fiscal
stimulus to support the flailing economy. The yen weakened slightly, though remained at the strong end of its recent range, supported by Monday’s solid growth data which bolstered chances of a rate hike in Japan in coming months. Sterling slipped from its
highest level in two months. UK pay growth picked up to 5.9% last quarter, its highest level in eight months, and employment unexpectedly rose.  Australia’s central bank also began its rate cutting cycle today as expected, as policymakers presented the cut
with caution on further easing. RBA cut the cash rate by a quarter-point to 4.1%, the first reduction since November 2020. US$ Index +0.4%, GBPUSD -0.3%, EURUSD -0.3%, USDJPY +0.1%, AUDUSD -0.2%, NZDUSD -0.7%, USDCHF +0.1%, USDCAD +0.2%, USDSEK +0.3%, USDNOK
+0.5%. 

Spot Bitcoin -0.1%, Spot Ethereum -2.7%. Starting today, some FTX customers will get repayments.

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
• Altice USA (ATUS) Raised to Outperform at Raymond James; PT $3.50
• Avient Corp (AVNT) Raised to Buy at Seaport Global Securities; PT $56
• Bath & Body Works (BBWI) Raised to Overweight at JPMorgan; PT $47
• Booking (BKNG) Raised to Buy at CFRA
• Canadian Apartment (CAR-U CN) Raised to Buy at Ventum Financial; PT C$57
• Capital Power (CPX CN) Raised to Outperform at CIBC; PT C$64
• Cisco (CSCO) Raised to Buy at DZ Bank; PT $71
• CNX Resources (CNX) Raised to Market Perform at Raymond James
• Digital Realty (DLR) Raised to Sector Outperform at Scotiabank
• Ecopetrol (ECOPETL CB) ADRs Raised to Buy at Citi; PT $14
• Gilead (GILD) Raised to Buy at Deutsche Bank; PT $120
• Kellanova (K) Raised to Outperform at RBC; PT $83.50
• Lumine Group (LMN CN) Raised to Buy at TD Cowen; PT C$47
• Magnolia Oil & Gas (MGY) Raised to Buy at SWS
• Parsons (PSN) Raised to Outperform at William Blair
• Schwab (SCHW) Raised to Buy at TD Cowen; PT $103
• Snowflake (SNOW) Raised to Outperform at Wolfe; PT $235
• Tapestry (TPR) Raised to Buy at Redburn; PT $110
• TC Energy (TRP CN) Raised to Buy at Veritas Investment Research Co
• TransAlta (TA CN) Raised to Outperform at CIBC; PT C$19.50
• WP Carey (WPC) Raised to Outperform at BMO; PT $67
• Wynn Resorts (WYNN) Raised to Buy at Jefferies; PT $118
• Downgrades
• Bank of Nova Scotia (BNS CN) Cut to Neutral at CIBC; PT C$81
• BASF (BAS GR) ADRs Cut to Hold at Berenberg; PT $13.60
• Capital Clean Energy Car (CCEC) Cut to Hold at Fearnley; PT $20
• Cognex (CGNX) Cut to Neutral at President Capital Management; PT $36.20
• Datadog (DDOG) Cut to Peerperform at Wolfe
• Fortuna Mining (FVI CN) Cut to Underperform at CIBC; PT C$7
• GPA (PCAR3 BZ) ADRs Cut to Underweight at JPMorgan
• Hims & Hers Health (HIMS) Cut to Equal-Weight at Morgan Stanley; PT $60
• Leslie’s (LESL) Cut to Underperform at BofA; PT $1.40
• Lyft (LYFT) Cut to Sell at Arete; PT $10
• Merck & Co (MRK) Cut to Hold at Deutsche Bank; PT $105
• Moderna (MRNA) Cut to Equal-Weight at Barclays; PT $45
• PG&E (PCG) Cut to Neutral at Guggenheim
• Portland General (POR) Cut to Neutral at Ladenburg Thalmann; PT $42
• Robinhood (HOOD) Cut to Peerperform at Wolfe
• Shopify (SHOP CN) Cut to Accumulate at Phillip Secs; PT C$198.31
• TriNet Group (TNET) Cut to Hold at TD Cowen; PT $74
• Initiations
• Atyr Pharma (ATYR) Rated New Outperform at Leerink; PT $16
• Cardiff Oncology Inc (CRDF) Rated New Buy at Freedom Capital; PT $20
• Engene Holdings (ENGN) Rated New Overweight at Piper Sandler; PT $26
• GE Aerospace (GE) Rated New Buy at Redburn; PT $250
• Oklo (OKLO) Rated New Outperform at Haitong Intl; PT $64.93
• Venture Global (VG) Rated New Buy at Guggenheim; PT $27
• Rated New Sector Perform at Scotiabank; PT $17
• Rated New Outperform at Mizuho Securities; PT $25
• Rated New Equal-Weight at Wells Fargo; PT $18
• Rated New Buy at Goldman; PT $29
• Rated New Outperform at RBC; PT $20
• Rated New Overweight at JPMorgan; PT $25
• Rated New Neutral at Citi; PT $18
• Zegna Group (ZGN) Rated New Hold at TD Cowen; PT $10

Data sources: Bloomberg, Reuters, CQG

David Wienke