Daily Game Plan

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

TODAY’S ECONOMIC DATA:  08:30ET Housing Starts, Building Permits,
Initial Jobless Claims; 2:00ET FOMC Rate Decision; 4:00ET Net Long-term TIC Flows

Highlights and News:  

• Trump weighs Iran options as Israel ratchets up air strikes
  
• IAEA: IMPORTANT FACILITIES AT NATANZ NUCLEAR PLANT BADLY HIT
• Trump again extended TikTok’s sale deadline by 90 days
• Japan will protect trade interests and not rush deal
• Bessent Will Likely Meet With China in About 3 Weeks: NYP
• Florida beat Edmonton in Game 6 to win second straight Stanley Cup
• Cash-strapped Vatican unveils fundraising video centered on Pope Leo

Global stocks eased as an overnight meeting between President Trump and his national security team raised speculation that the US may join Israel’s attacks against
Iran. US military involvement with Israel could significantly boost the likelihood of permanently halting Iran’s nuclear ambitions but risks sparking widespread conflict in the oil-rich region. Iran’s Supreme Leader Ayatollah Ali Khamenei said that his country
won’t surrender to Israel. The Trump administration is pressing ahead with another tariff barrage that some trade experts say is more legally sound than the president’s country-by-country duties. The US Commerce Department is poised to reveal findings from
its probes into sectors critical to national security, semiconductors, pharmaceuticals, and critical minerals—within weeks. Japan will prioritize protecting its national interests in trade talks without rushing into a deal with the US, according to the Japanese
Prime Minister

EQUITIES: 

US equity futures wavered before the Federal Reserve’s interest rate decision, as the Israel-Iran conflict continued into its sixth day with fresh missile attacks from both nations. Futures
recovered from early losses after a report suggested a proposal to ease bank capital requirements. The Fed is expected to keep interest rates unchanged, then attention will turn to Chairman Jerome Powell’s guidance after the meeting for signals on future moves.
Investors are in a holding pattern ahead of today’s dot plot from the Fed — the first since Trump’s April tariff turmoil.  Traders continue to wager on just shy of two quarter-point interest rate cuts this year, with the first move fully priced in for October.
Fed officials penciled in two cuts for 2025 at their March projection. Alcohol beverage stocks may move after Reuters reports that
US Dietary Guidelines are expected to eliminate the long-standing recommendation that adults limit alcohol consumption to one or two drinks per day.

Futures ahead of the data/bell: E-Mini S&P +0.15%, Nasdaq +0.25%, Russell 2000 +0.1%, DJI +0.1%.

In pre-market trading, Biomea Fusion (BMEA) falls 8% after the drug developer launched an offering of stock and warrants. Bitdeer Technologies (BTDR) drops 6% after
the Bitcoin miner said it was offering $300 million in convertible senior notes due 2031 in a private placement. Circle Internet Group (CRCL) climbs 3% after the US Senate passed stablecoin legislation setting up regulatory rules for cryptocurrencies pegged
to the dollar. Marvell Technology (MRVL) gains 2%, with analysts positive on the chipmaker following an event focused on AI. Nucor (NUE) rises 2% after the steelmaker forecast guidance that beat the average analyst estimate.

European gauges are mostly lower as speculation grew that the US may become increasingly involved in the escalating Middle East conflict. UK inflation rose 3.4% in
May from a year earlier, slightly more than expected. It remains at its highest in over a year, ahead of the BOE’s rate decision tomorrow.  The Stoxx 600 is off session lows, with real estate and healthcare sectors leading the decline. Among individual movers,
Airbus SE advanced as much as 2.8% after saying it would target higher dividend payments. UBS Group AG declined ~2% as Morgan Stanley cut its recommendation on the Swiss lender following new capital demands imposed by Switzerland earlier this month. Barclays
strategists expect the Stoxx 600 to rally about 14% by the end of 2026.  German stimulus and rate cuts have the potential to lift euro-area economic growth, boosting earnings and valuations for the region, they said. Stoxx 600 -0.25%, DAX -0.2%, CAC -0.1%,
FTSE 100 +0.1%. Real Estate -1.2%, Healthcare -1%, Autos -0.9%. Aero & Defense +0.9%.

Shares in Asia were mixed as traders monitored the latest developments in the Middle East and awaited the Federal Reserve’s monetary-policy decision. The MSCI Asia
Pacific Index was steady, with gains in Japanese and South Korean shares offset by losses in Hong Kong and India. Sentiment was dampened by news that the European Union is refusing to hold an economic meeting with China due to a lack of progress on trade disputes.
Meanwhile, a closely-watched forum in Shanghai featuring China’s financial chiefs has so far yielded little positive surprise for investors. Japan’s exports fell 1.7% year on year in May, their first decline in eight months. Nikkei 225 +0.9%, Kospi +0.7%,
Taiwan +0.6%, CSI 300 +0.1%. Vietnam -0.05%, ASX 200 -0.1%, Sensex -0.2%, Singapore -0.25%, Philippines -0.5%, Indonesia -0.7%, Hang Seng Index -1.1%, Hang Seng Tech Index -1.5%, Thailand -1.7%.

FIXED INCOME: 
 

Treasuries are slightly richer across maturities as US trading gets under way, supported by bigger gains for gilts following UK May inflation data. US session includes
weekly jobless claims report, a day earlier than normal because of US holiday Thursday, Fed rate decision at 2pm New York time and Chair Powell news conference 30 minutes later. US 10-year yields are -2bps around 4.365%. 2s10s and 5s30s are just a tad flatter.
US bank regulators plan to reduce the enhanced supplementary leverage ratio (eSLR) by up to 1.5 percentage points for the biggest lenders, which could lower their capital requirements.  The revisions aim to bolster banks’ roles as intermediaries in the market. 

METALS: 

Gold is steady in choppy trade near $3,385 an ounce as the market watched for signs of US involvement in the Middle East conflict.  President Trump has so far resisted
calls from some political allies to join in strikes against Iran and its nuclear sites. Iran International said multiple loud explosions were heard moments ago in eastern Tehran. New reports from large mainstream publications have said Israel is running out
of missile interceptors and Iran is hampered in its ability to launch missiles. “Despite increased safe-haven demand, speculative gold positioning remains unusually low given the macro uncertainty,” Goldman Sachs said. Spot gold -0.1%, Silver +0.1%, Copper
+0.6%.

ENERGY:   

Oil prices steadied, with traders focused on flows through the region’s vital shipping chokepoint. Early data from TankerTrackers.com show that Iran has actually
increased its exports significantly in the days since attacks began, and there’s been no major disruption to Hormuz. The cost of shipping crude from the Middle East to China is up more than 50% since the attacks began. Oil options are their most bullish since
2013 as Israel-Iran tensions escalate. Meanwhile, US industry figures showed the nation’s crude inventories fell by more than 10 million barrels last week. That would be the biggest decline since last summer if confirmed by official EIA data later today. WTI
and Brent are roughly flat, US Nat Gas +1.25%, RBOB +0.9%. 

CURRENCIES: 

In currency markets, the dollar drifts lower against most currency majors ahead of the FOMC decision, with the Aussie dollar and yen atop the G-10 leaderboard. Sterling
advanced after UK inflation came in higher than expected. The Bank of England will decide on its interest rate policy on Thursday. The Swedish krona slipped after the Riksbank cut its key rate to 2%, the lowest level in 2 1/2 years, and said even more easing
is possible. US$ Index -0.15%, GBPUSD +0.15%, EURUSD +0.25%, USDJPY -0.3%, AUDUSD +0.4%, NZDUSD +0.2%, USDCHF +0.1%, USDCAD -0.15%, USDSEK +0.25%, USDNOK +0.05%.

Bitcoin +0.4%, Ethereum +0.1%.  The US Senate passed a Trump-backed stablecoin bill in a major win for the crypto industry.

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
• Analog Devices (ADI) Raised to Overweight at Cantor; PT $270
• Genworth (GNW) Raised to Outperform at KBW; PT $9
• Keyera (KEY CN) Raised to Outperform at BMO; PT C$54
• REV Group (REVG) Raised to Equal-Weight at Morgan Stanley; PT $46
• Downgrades
• Sarepta (SRPT) Cut to Hold at TD Cowen; PT $24
• Smart Share Global (EM) ADRs Cut to Neutral at Citi; PT $1.25
• Sunrun (RUN) Cut to Sector Perform at RBC; PT $5
• Verve Therapeutics (VERV) Cut to Neutral at HC Wainwright
• Cut to Hold at Jefferies; PT $11
• Cut to Market Perform at LifeSci Capital
• Zoetis (ZTS) Cut to Hold at Stifel; PT $160
• Initiations
• Amer Sports (AS) Rated New Outperform at Haitong Intl; PT $42
• Blue Owl Technology Fina (OTF) Rated New Buy at Compass Point; PT $17
• Brookfield Asset Management (BAM CN) Rated New Outperform at RBC
• Brookfield Business (BBU-U CN) Rated New Outperform at RBC
• Brookfield Corp (BN CN) Rated New Outperform at RBC
• Crescent Biopharma Inc (CBIO) Rated New Outperform at LifeSci Capital
• Definity Financial (DFY CN) Rated New Outperform at RBC
• Element Fleet (EFN CN) Rated New Outperform at RBC
• Fairfax Financial (FFH CN) Rated New Outperform at RBC
• Flutter (FLUT) Reinstated Hold at HSBC; PT $259
• Graco (GGG) Rated New Outperform at Wolfe; PT $93
• IGM Financial (IGM CN) Rated New Sector Perform at RBC
• Intact Financial (IFC CN) Rated New Sector Perform at RBC
• Loma Negra (LOMA AR) ADRs Reinstated Buy at Citi; PT $16
• Marathon Petroleum (MPC) Reinstated Inline at Evercore ISI; PT $170
• Microchip (MCHP) Rated New Neutral at Cantor; PT $70
• MTY Food Group (MTY CN) Reinstated Sector Perform at Scotiabank; PT C$45
• nCino (NCNO) Rated New Neutral at JPMorgan; PT $30
• Nordson (NDSN) Rated New Peerperform at Wolfe
• ON Semi (ON) Rated New Neutral at Cantor; PT $55
• Power of Canada (POW CN) Rated New Outperform at RBC
• Q2 Holdings (QTWO) Rated New Overweight at JPMorgan; PT $115
• Restaurant Brands (QSR CN) Reinstated Sector Perform at Scotiabank
• Salesforce Inc (CRM) Rated New Add at CTBC Securities; PT $296.60
• SiTime (SITM) Reinstated Buy at William O’Neil
• Trisura (TSU CN) Rated New Outperform at RBC
• Valero Energy (VLO) Rated New Inline at Evercore ISI; PT $135
• Vireo Growth Inc (VREO CN) Rated New Overweight at Zuanic

Data sources: Bloomberg, Reuters, CQG

David Wienke