Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET Trade Balance; 11:45ET Trump to meet Mark Carney; 1:00ET 10-Year Auction

Highlights and News:  

• China Built a Robot with a Human Brain Made from Human Stem Cells
• Germany in Political Chaos After Merz Loses Chancellor Vote: Lawmakers to Vote Again Today
• EU TARGETS €100 BILLION OF US GOODS WITH TARIFFS IF TALKS FAIL
• China to Brief on Market Support Tomorrow
• Trump Says Announcement on Cost of Drugs to Come Next Week
  

Global stocks slipped as a slew of corporate statements reinforced concerns about the trade war’s harmful impact on companies and the world economy.  Canada’s prime
minister and the EU’s top trade official will navigate tricky negotiations as they push for lower tariffs in Washington today. China’s central bank and financial regulators will hold a press briefing on Wednesday to discuss policies aimed at stabilizing markets,
as the country’s economic outlook comes under increasing threat from US tariffs. Officials may unveil new measures to support key sectors like technology, trade, and domestic consumption.  Meanwhile, Friedrich Merz failed to secure enough parliamentary votes
to become Germany’s chancellor, disrupting his governing strategy and coalition. Merz won 310 votes, short of the 316 that constitute an absolute majority. It was the first time since World War II that an incoming chancellor failed to secure backing from lawmakers
in the first round of voting in the Bundestag.

EQUITIES: 

US equity futures are lower after the S&P500 index snapped a nine-day winning streak on Monday. Nasdaq contracts underperform as Palantir Technologies fell about 8% post-market after
the software firm’s results failed to meet investors’ expectations, and analysts noted weakness in its international sales division. Ford Motor Co. dropped over 2% after the carmaker pulled its financial guidance and flagged a total tariff impact of about
$2.5 billion on 2025 earnings. DoorDash is buying hospitality tech company SevenRooms for $1.2 billion, hours after confirming its plans to acquire London-based Deliveroo, underscoring its appetite for aggressive global expansion. DoorDash also issued a strong
orders outlook for the current quarter and posted better-than-expected gross order value for the first quarter. Focus will now turn to the Federal Reserve’s policy announcement on Wednesday.  

Futures ahead of the bell: E-Mini S&P -0.8%, Nasdaq -1.1%, Russell 2000 -0.9%, DJI -0.7%.

In pre-market trading, Tesla (TSLA) slips 1.6% as sales kept sliding across Europe’s biggest electric-car markets in April. Celsius Holdings (CELH) falls about 4% after
the energy-drink maker reported first-quarter revenue that trailed expectations. Constellation Energy (CEG) drops 6% after the power producer reported adjusted profit and Ebitda for the first quarter that fell short of expectations. Datadog (DDOG) climbs 2%
as the software company forecast revenue for the second quarter, guidance that beat. DoorDash (DASH) falls 3% as the company is buying SevenRooms for $1.2 billion and Deliveroo for $3.9 billion. Fabrinet (FN) drops 6% as the maker of optical communications
products posted a sequential decline in datacom revenue. Ford (F) slips 2% as the automaker suspended its full-year financial guidance and said President Trump’s tariffs will take a toll on profits. Hims & Hers Health (HIMS) slumps 6% after the telehealth
company gave guidance for second-quarter revenue that fell short of expectations. Ichor (ICHR) drops 15% after the maker of fluid delivery subsystems for semiconductor capital equipment posted disappointing gross margins. Palantir Technologies (PLTR) falls
7% after results failed to impress. SolarEdge (SEDG) rises 13% after the solar equipment maker forecast revenue for the 2Q that beat estimates. Vertex Pharmaceuticals (VRTX) falls 5% after the company reported adjusted earnings per share for the first quarter
that missed expectations. WeRide Inc.’s US-listed shares (WRD) rise 12% after news that Uber Technologies is expanding its autonomous-vehicle partnership with the China-based firm to 15 more cities globally, including in Europe.

European gauges reverse early gains with Germany leading declines after Friedrich Merz’s surprise loss in a parliamentary vote which may hamstring his ability to enact
his agenda. The loss may delay Merz’s swearing-in as head of government and dampen recent optimism around European stocks based on ambitious plans for defense and infrastructure spending. Aero & Defense and Basic Resources sectors fall the most, while utilities
and energy stocks gain. Britain’s FTSE 100 inches lower as it strains for a record 16th straight positive close. Results today were mixed. Royal Philips NV lowered its profitability outlook for the year due to the cost of dealing with rising trade hurdles,
while Vestas Wind Systems A/S jumped after it kept its forecast despite citing “global uncertainty.” Meanwhile, Continental AG more than doubled earnings in the first quarter as its car-parts unit slashed costs and tire sales bounced back. Stoxx 600 -0.3%,
DAX -0.8%, CAC -0.4%, FTSE 100 -0.1%. Aero & defense -1.1%, Luxury -1%, Basic Resources -1%, Technology -0.9%. Utilities +0.5%, Energy +0.5%, Food & Beverage +0.4%.  

Shares in Asia were mostly higher, as Chinese shares rose on resilient holiday spending data and signs of easing trade tensions with the US. The MSCI Asia Pacific Index
rose 0.3%, while Chinese markets outperformed in the region after returning from an extended holiday. Investors’ mood was lifted by strong retail sales and robust airline traffic results during the Labor Day holiday in early May. Traders also dialed up bets
on easing tensions after Treasury Secretary Scott Bessent said the US could see “substantial progress in the coming weeks” in trade talks with China. Hong Kong launched a scheme today to offer smoother listings for tech companies on its stock exchange, as
it looks to capitalize on Chinese companies’ growing appetite to raise funds offshore.  Markets in Japan and South Korea were closed for a holiday.  CSI 300 +1.1%, Indonesia +1%, Philippines +0.9%, Hang Seng Index +0.7%, Singapore +0.2%, Vietnam +0.15%. Taiwan
-0.05%, ASX 200 -0.1%, Sensex -0.2%, Thailand -0.9%.

FIXED INCOME: 
 

Treasuries are mixed, with outperformance at the shorter-end of the curve. US 10-year yields ease 1.5 bps to 4.34% while two-year yields fall 1 bp. Yields marginally
cheaper further out the curve, with focus on 10-year note auction. Front-end outperformance has 2s10s spread about 2bp wider on the day, off session highs reached during London morning.  Treasury auction cycle continues with $42 billion 10-year new issue,
following good demand for Monday’s 3-year note sale. A $25b 30-year new issue Thursday will complete the cycle.

METALS: 

Gold rose to a one-week high on safe-haven demand as the world’s biggest bullion buyer returned from holiday. Trading in gold contracts on the Shanghai Futures Exchange
has hit record volumes in recent weeks, even as the exchange tightened margin requirements to try quell speculative fervor. Investors across markets are looking ahead to the Federal Reserve’s midweek interest-rate decision. Policymakers are widely expected
to hold rates steady when they conclude their meeting on Wednesday. Spot gold +1.2%, Silver +1.7%, Copper +0.5%.

ENERGY:   

Oil prices climbed after reaching four-year lows in the prior session, spurred by OPEC+’s decision to speed up production increases. Saudi Arabia’s budget deficit
hit $15.6 billion in the first quarter of 2025, more than half its forecast for the entire year, even before oil prices significantly dropped. Yet, Saudi Arabia appears to be willing to sustain a period of low oil prices to punish OPEC+ overproducers and discipline
US shale producers. The European Union will announce plans to end its reliance on Russian gas by the end of 2027. The proposals will reportedly include banning new gas import deals and may also seek to break existing contracts with Russia. WTI +2.4%, Brent
+2.3%, US Nat Gas -0.6%, RBOB +1.4%. 

CURRENCIES: 

In currency markets, the Taiwan dollar was fairly sedate as attention shifted to Hong Kong, where the de facto central bank bought $7.8 billion to stop the local
currency from strengthening and breaking its peg to the greenback. The Hong Kong Monetary Authority said today that it has been diversifying currency exposure in its investment portfolio to manage risks. China signaled it’s not ready to let the yuan strengthen
dramatically against the dollar, helping restore calm to Asia’s foreign-exchange market. The PBOC kept its daily reference rate for the yuan steady as it returned from a public holiday, pushing back against a recent rally in the offshore version of its currency.
US$ Index -0.25%, GBPUSD +0.5%, EURUSD +0.1%, USDJPY -0.6%, AUDUSD -0.05%, NZDUSD +0.25%, USDCHF +0.3%, USDCAD -0.1%, USDSEK -0.5%, USDNOK -0.5%, USDMXN +0.1%.

Bitcoin -0.5%, Ethereum -2.2%.  

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
• Ardmore Shipping (ASC) Raised to Buy at Fearnley; PT $12.50
• Bank First Corp (BFC) Raised to Outperform at Hovde Group; PT $130
• Canadian National (CNR CN) Raised to Positive at Susquehanna; PT C$165.86
• First Savings Finl (FSFG) Raised to Outperform at Hovde Group; PT $34
• HBT Financial (HBT) Raised to Outperform at Hovde Group; PT $28
• Lakeland Financial (LKFN) Raised to Outperform at Hovde Group; PT $72
• Playstudios (MYPS) Raised to Speculative Buy at Benchmark; PT $2
• ScanSource (SCSC) Raised to Buy at Northcoast; PT $42
• Scorpio Tankers (STNG) Raised to Buy at Fearnley; PT $56
• Downgrades
• Chevron (CVX) Cut to Sell at DZ Bank; PT $130
• Church & Dwight (CHD) Cut to Hold at TD Cowen; PT $100
• Fortinet (FTNT) Cut to Sell at DZ Bank; PT $95
• FrontView REIT (FVR) Cut to Neutral at BofA
• Green Impact Partners In (GIP CN) Cut to Hold at Canaccord; PT C$3
• Lineage (LINE) Cut to Neutral at BofA
• McDonald’s (MCD) Cut to Neutral at Northcoast
• Napco Security Technologies (NSSC) Cut to Hold at Lake Street; PT $26
• Offerpad Solutions (OPAD) Cut to Market Perform at Citizens
• Parkland (PKI CN) Cut to Sell at TD Cowen; PT C$44
• Cut to Sector Perform at Peters & Co; PT C$42
• Skechers USA (SKX) Cut to Market Perform at Raymond James
• Cut to Hold at Deutsche Bank; PT $63
• Cut to Hold at Williams Trading; PT $63
• Sweetgreen (SG) Cut to Neutral at JPMorgan; PT $25
• Tactile Systems (TCMD) Cut to Neutral at Piper Sandler; PT $14
• Vertex Pharmaceuticals (VRTX) Cut to Market Perform at Leerink; PT $503
• Initiations
• Andersons (ANDE) Reinstated Market Perform at BMO; PT $45
• Broadridge (BR) Rated New Buy at Needham; PT $300
• Cal-Maine (CALM) Rated New Market Perform at BMO; PT $100
• Canaan (CAN) ADRs Rated New Buy at Benchmark; PT $3
• Emera (EMA CN) Reinstated Hold at Desjardins; PT C$62
• Firstsun Capital (FSUN) Rated New Overweight at Stephens; PT $44
• Fortis (FTS CN) Reinstated Hold at Desjardins; PT C$70
• Hydro One (H CN) Reinstated Buy at Desjardins; PT C$58
• Shopify (SHOP CN) Rated New Outperform at BMO; PT C$165.86
• Vital Farms (VITL) Rated New Outperform at BMO; PT $44
• Workday (WDAY) Rated New Buy at WestPark Capital; PT $315

Data sources: Bloomberg, Reuters, CQG

David Wienke