Daily Game Plan

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

TODAY’S ECONOMIC DATA:  1:00ET Fed’s Goolsbee speaks; 2:00ET Federal Budget Balance

Highlights and News:  

• Trump Threatens 35% Canada Tariff, Floats Higher Global Rate
• US official says Trump to keep tariff exemption for USMCA goods
• Trump Plans ‘Major’ Russia Statement on Monday
• CHINA, US AGREE TO BOOST CHANNELS FOR TALKS AT ALL LEVELS: CCTV
• RUBIO: HAD `VERY CONSTRUCTIVE’ MEETING WITH CHINA’S WANG YI

Global stocks fell after President Trump threatened a 35% tariff on some Canadian goods and raised the prospect of blanket tariffs of 15% to 20% on most other countries.
Trump warned that EU members and Canada could get their respective tariff letters as soon as today. Meanwhile, US Secretary of State Marco Rubio said a summit between President Trump and Chinese leader Xi Jinping is likely after his “very constructive and
positive” meeting with the Chinese Foreign Minister. Trump said he plans to make a “major statement” on Russia, as the US prepares to send more American weapons to Ukraine via purchases from NATO allies.  He also said he expects the Senate to pass a tougher
Russia sanctions bill. Brazil’s Lula da Silva insisted the nation can survive without US trade and will look to other partners.

EQUITIES:   

US equity futures fell after President Trump unveils new tariff plans. S&P futures fall as much as 0.7% before paring losses. Traders appear increasingly desensitized to the risks of
the global trade war, with the VIX index falling to its lowest level since February this week. Nvidia dropped 0.6% in premarket trading, pulling back after the artificial intelligence-bellwether closed at a $4 trillion valuation. Investors are counting on
US stocks to rally on a robust earnings season, before the market loses steam toward year end, BofA’s Michael Hartnett said. He added that client feedback suggests “no one” is worried about the economy or valuations. In corporate news, Performance Food Group
has attracted takeover interest from US Foods Holding Corp., a potential deal that would create a food distribution company with combined sales of roughly $100 billion.

Futures ahead of the bell: E-Mini S&P -0.6%, Nasdaq -0.5%, Russell 2000 -0.9%, DJI -0.6%.

In pre-market trading, Cryptocurrency-exposed stocks climb after Bitcoin rallied past $118,000 for the first time. Riot Platforms (RIOT) +3%, MARA Holdings +3%. Drone-related
firms are up after Fox News reported that Defense Secretary Pete Hegseth issued orders to ramp up production and deployment of drones. AeroVironment (AVAV) +3%, Kratos Defense & Security Solutions (KTOS) +3%. Capricor Therapeutics (CAPR) sinks 47% after the
FDA declined to approve the company’s treatment candidate aimed at treating a disease of the heart muscle associated with Duchenne muscular dystrophy. Levi Strauss (LEVI) shares gain 6% after the maker of 501 jeans boosted its net revenue forecast for the
full year. Oscar Health (OSCR) slips 2.9% after Wells Fargo Securities downgraded the stock to underweight as the health insurer’s pricing for 2025 does not appear adequate to cover cost trends.

European gauges decline for the first time this week after President Trump reportedly threatened blanket tariffs of 15% to 20% on most of trading partners. The UK economy
shrank for a second straight month, with gross domestic product declining 0.1% in May, according to the Office for National Statistics. The Stoxx 600 extends opening losses with all sectors except energy and aero & defense in the red, while banks and luxury
shares decline most. Tariff-sensitive luxury names such as Kering SA and Moncler SpA slide more than 3%. DNB Bank ASA dropped 8% after the lender reported lower profit for the second quarter. BP shares rose after announcing it expects higher production and
strong results from its trading business for the second quarter. Investors will be looking to a slew of earnings next week for signs of the region’s resilience.  Stoxx 600 -0.8%, DAX -0.8%, CAC -0.8%, FTSE 100 -0.4%. Luxury -2.1%, Banks -1.7%, Personal Goods
-1.5%. Aero % Defense +0.3%, Energy +0.2%.

Shares in Asia were mixed, with the MSCI Asia Pacific Index rising as much as 0.6% before paring most of the climb. Gauges in China held small gains on optimism over
domestic policy measures as well as hopes of easing tensions with the US after a meeting today between Foreign Minister Wang Yi and US Secretary of State Marco Rubio in Malaysia. Hang Seng jumped as much as 2% before paring gains, while Chinese brokerage stocks
posted their biggest jump in nearly nine months on growing optimism that more firms may get crypto-trading licenses. Japan’s Nikkei and South Korea’s Kospi wiped out early gains to settle slightly lower. Asian shares tied to critical minerals follow US peers
higher after MP Materials secured a $400 million equity investment from the US Department of Defense. Meanwhile, Goldman Sachs strategists raised their 12-month target for the MSCI Asia Pacific ex-Japan Index by 3% on a more favorable macro environment and
greater certainty around tariffs. Thailand +1%, Vietnam +0.8%, Indonesia +0.6%, Hang Seng Index +0.5%, Topix +0.4%, Singapore +0.3%, CSI 300 +0.1%. Philippines -0.05%, ASX 200 -0.1%, Nikkei 225 -0.2%, Kospi -0.2%, Sensex -0.8%.

FIXED INCOME: 
 

Treasuries decline, led by longer-dated maturities with 10-year yields rising 4 bps to 4.39%.  Treasury yields cheaper by 1bp to 3.5bp across the curve in a bear-steepening
move, with 2s10s, 5s30s spreads wider by 2bp and 3bp on the day. Dollar IG issuance slate empty so far and is expected to remain light. Just under $30 billion of bonds priced this week.

METALS: 

Gold prices rose for a third straight session, as President Trump’s announcement of new tariffs on Canada and broader tariff threats against other trading partners
lifted demand for the safe-haven asset. Spot gold rises $27 to around $3,350/oz. Silver jumped to its highest level since 2011, with US premiums rising and the spot London market showing signs of tightness. Trump’s copper tariffs may be reversed, according
to BMI, which views them more as a negotiating tactic than a serious proposal. Spot gold +0.8%, Silver +1.7%, Copper futures -1.6%.

ENERGY:   

Oil prices rise as investors weighed a weaker market outlook for this year by the International Energy Agency despite tightness in the prompt market. Brent crude
pared earlier gains after Saudi Arabia significantly exceeded its OPEC+ production quota in June.  Saudi Arabia raised crude output by about 700,000 barrels a day in June and exported about 70% of the extra supply, according to the International Energy Agency.
Iraq, Kuwait and the United Arab Emirates also raised production and exceeded their OPEC quotas, the IEA said. The flood of extra crude comes as global oil markets head for a substantial surplus. World oil consumption will grow by just 700,000 barrels a day
this year, the slowest pace in 16 years excluding the 2020 pandemic slump, the agency said in a monthly report.  WTI +1.1%, Brent +1.1%, US Nat Gas +0.7%, RBOB +0.5%. 

CURRENCIES: 

In currency markets, the Canadian dollar dropped as much as 0.6% amid the threat of 35% tariff rate, and other G-10 currencies weaken on the prospect of 15% to 20%
blanket tariffs on most trading partners. Offshore yuan edges higher following a strong PBOC fixing. Euro pares losses after ECB Executive Board member Isabel Schnabel said there’d have to be a major downward shift in inflation to justify another reduction
in rates. It remains better offered with tariff letters to European Union members expected shortly. Sterling is headed for its longest losing streak in eight months after data showed the UK economy shrank for a second straight month. Hong Kong intervened for
the fourth time in two weeks to keep its currency from weakening beyond the official trading band. US$ Index +0.2%, GBPUSD -0.5%, EURUSD -0.15%, USDJPY +0.5%, AUDUSD -0.25%, NZDUSD -0.45%, USDCHF -0.05%, USDCAD +0.3%, USDSEK +0.4%, USDNOK +0.5%, USDMXN +0.7%.

Bitcoin +3.9%, Ethereum +5.8%.   Bitcoin gains over 4% and to a fresh record above $118,000.

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 Outperform at Wedbush; PT $4
• Astronics (ATRO) Raised to Buy at Truist Secs
• Canada Goose (GOOS CN) Raised to Equal-Weight at Barclays; PT C$19.17
• Corebridge Financial (CRBG) Raised to Neutral at UBS; PT $37
• Danaher (DHR) Raised to Sector Outperform at Scotiabank; PT $275
• FB Financial (FBK) Raised to Outperform at KBW; PT $58
• GXO Logistics (GXO) Raised to Buy at Truist Secs; PT $62
• Invesco (IVZ) Raised to Equal-Weight at Wells Fargo; PT $18
• SLM (SLM) Raised to Overweight at JPMorgan; PT $38
• TE Connectivity (TEL) Raised to Buy at Citi; PT $200
• Texas Instruments (TXN) Raised to Buy at TD Cowen; PT $245
• Thermo Fisher (TMO) Raised to Sector Outperform at Scotiabank; PT $590
• Visteon (VC) Raised to Outperform at Baird; PT $125
• Raised to Outperform at Baird; PT $125
• Raised to Buy at Goldman; PT $120
• Downgrades
• AerSale (ASLE) Cut to Hold at Truist Secs
• Agree Realty (ADC) Cut to Equal-Weight at Morgan Stanley; PT $75
• Albemarle (ALB) Cut to Sell at UBS; PT $57
• Athabasca Oil (ATH CN) Cut to Sector Perform at Scotiabank; PT C$6.50
• Core Scientific (CORZ) Cut to Neutral at Macquarie; PT $15
• Energy Fuels (EFR CN) Cut to Neutral at Roth Capital Partners; PT C$8.22
• Expeditors (EXPD) Cut to Underperform at BofA
• Federal Signal (FSS) Cut to Sector Weight at KeyBanc
• Freeport (FCX) Cut to Neutral at UBS; PT $50
• FrontView REIT (FVR) Cut to Equal-Weight at Morgan Stanley; PT $13.50
• Hancock Whitney (HWC) Cut to Market Perform at KBW; PT $63
• Helen of Troy (HELE) Cut to Hold at Canaccord; PT $26
• Illumina (ILMN) Cut to Sector Perform at Scotiabank; PT $125
• Mid-America (MAA) Cut to Neutral at Goldman; PT $165
• North American Construction (NOA CN) Cut to Hold at Canaccord; PT C$24.50
• Northern Trust (NTRS) Cut to Underperform at KBW; PT $120
• Nutrien (NTR CN) Cut to Hold at Jefferies; PT C$90.40
• Oscar Health (OSCR) Cut to Underweight at Wells Fargo; PT $10
• Phillips 66 (PSX) Cut to Sector Perform at Scotiabank; PT $133
• Initiations
• Centrus Energy (LEU) Rated New Buy at Stifel; PT $220
• Circle Internet (CRCL) Rated New Neutral at Baird; PT $210
• Harrow (HROW) Rated New Overweight at Cantor; PT $76
• Innoviva (INVA) Rated New Overweight at Cantor; PT $26
• James Hardie (JHX AU) Rated New Outperform at Baird; PT $32
• Janux Therapeutics (JANX) Rated New Outperform at Raymond James; PT $65
• KALA BIO Inc (KALA) Rated New Buy at Ladenburg Thalmann; PT $12
• OMS Energy Technologies (OMSE) Rated New Buy at Roth Capital Partners
• SoFi Technologies (SOFI) Rated New Hold at TD Cowen; PT $21
• Standard Lithium Ltd (SLI CN) Rated New Outperform at Raymond James
• Tvardi Therapeutics (TVRD) Rated New Overweight at Cantor; PT $52
• Vir Biotechnology (VIR) Rated New Outperform at Raymond James; PT $12
• Vistra Corp (VST) Rated New Buy at President Capital Management

Data sources: Bloomberg, Reuters, CQG

David Wienke