Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET
Advance Goods Trade Balance,
Wholesale Inventories; 9:00ET FHFA House Price Index; 10:00ET US June JOLTS Job Openings, US July Conference Board Consumer Confidence; 11:30ET US to sell $30 billion 2-year FRN;
1:00ET 7-Year Auction

Highlights and News:  

• Federal Income from Tariffs under Trump Sets Annual Record with 3 Months to Go
• EU CONFIDENT US TRADE DEAL TO GET BACKING OF MEMBER COUNTRIES
• EU INTENDS TO PURCHASE €40B WORTH OF AI CHIPS IN US TRADE DEAL
  
• India overtook China to become the biggest shipper of smartphones to the US
• Shooting at Manhattan skyscraper that houses NFL headquarters leaves 5 dead, including gunman
• NYC Gunman Targeted the NFL But Ended Up on the Wrong Floor
• Harvard said to be open to spending up to $500 million to end its dispute with the White House: NYT

World shares edged higher, helped by a lift from early European earnings, as investors awaited key monetary policy decisions from Japan and the US. The EU and US
will seek to clinch a non-legally binding joint statement by Aug. 1 that will expand on some of the elements negotiated over the weekend. US and Chinese officials finished the first of two days of talks aimed at extending their tariff truce.  Meanwhile, China’s
trade had its worst week in almost three months, a sign this year’s record-breaking volumes may be starting to slow. South Korea’s finance minister said he would seek a mutually beneficial trade deal, including shipbuilding, when he meets US Treasury Secretary
Scott Bessent for talks this week. UK food inflation surged 4% in July from a year earlier to its highest level in 17 months. Spain’s economy posted another strong quarter of expansion, with GDP rising 0.7%.

EQUITIES:   

US equity futures gained as a deluge of data is seen reinforcing the picture of economic resilience, diverting attention from trade negotiations. Investor attention is turning from recent
US tariff deals to key indicators spanning jobs and inflation to broader economic activity. Traders continue to lean toward a quarter-point reduction at the Fed’s meeting in mid-September, with around 100 basis points of easing seen over the next 12 months.
Union Pacific agreed to acquire Norfolk Southern in a cash-and-stock transaction valued at $85 billion, in what stands to be the industry’s largest deal ever. Baker Hughes will acquire Chart for about $9.6 billion in cash.  Merck & Co is slashing $3 billion
from its annual spending as it braces for off-brand competition to its cancer drug Keytruda. Tariffs may still hit US stocks despite key trade deals, Goldman’s Peter Oppenheimer warned, reiterating his call to diversify into other markets.  

Futures ahead of the bell: E-Mini S&P +0.25%, Nasdaq +0.5%, Russell 2000 +0.5%, DJI +0.1%.

In pre-market trading, Amkor Technology (AMKR) jumps 9% after the company gave an upbeat sales forecast for 3Q that predicted a boost from the production of iPhone
sockets. Boeing Co. (BA) rises 1% after managing to slow a cash outflow in the second quarter. Cadence Design (CDNS) is up 8% after boosting its outlook for the year even as the maker of chip-design tools also pleaded guilty to charges accusing the company
of violating US export controls. Chart Industries (GTLS) rises 16% after Baker Hughes Co. agreed to acquire the company in a cash deal with an enterprise value of $13.6 billion. Exelixis (EXEL) falls 11% after reporting lower-than-expected quarterly sales
of its cancer drug Cabometyx. Harmonic (HLIT) falls 15% after the communications equipment company gave a third-quarter forecast that was weaker than expected. Merck (MRK) shares drop 3% after the drugmaker said it will extend its shipments pause of cancer-preventing
Gardasil vaccine to China through at least the end of this year. NeoGenomics (NEO) tumbles 17% after cutting its revenue guidance for the full year. Norfolk Southern Corp. (NSC) falls 2% after Union Pacific Corp. (UNP) agreed to acquire the company in a cash-and-stock
transaction valued at $85 billion. Union Pacific Corp. shares are up less than 1%. Philips ADRs (PHG) jump 9% after the Dutch medical-technology firm reported better-than-expected results for the second quarter and increased its profitability outlook for the
year. PTC Therapeutics (PTCT) gains 5% after the drugmaker said the FDA approved its Sephience therapy for children and adults living with phenylketonuria. SoFi Technologies (SOFI) rises 7% after the company boosted its year revenue outlook. Stanley Black
& Decker (SWK) drops 6.7% after the power-tool company reported net sales for the second quarter that missed. UnitedHealth (UNH) is down 3.7% after setting a new earnings target below Wall Street’s estimates for the year. Whi
rlpool (WHR) slumps 16% after
the appliance maker cut its full-year forecast for ongoing earnings per share.

European gauges recovered after Monday’s sell-off as inflation expectations of euro-area consumers eased in June, and early earnings reports were positive. Indices
pull back from intra-day highs after Novo Nordisk plunged 28% on lower Wegovy sales. The Stoxx 600 is holding some of its gains, led by banks and industrials, while healthcare underperforms.  Royal Philips jumped 10% after the Dutch medical-technology firm
raised its profitability outlook, as the trade war impact was less severe than feared. AstraZeneca rose after beating second-quarter revenue and profit expectations on robust sales of newer cancer, heart and kidney disease medicines. Novo Nordisk A/S lowered
its financial forecast in a surprise update that cited lagging sales of its weight-loss drug Wegovy. Barclays shares rose 2% as traders turned in their best second quarter performance in three years thanks to trade-policy fueled volatility. Stoxx 600 +0.4%,
DAX +1.1%, CAC +1.2%, FTSE 100 +0.5%. Banks +1.9%, Industrials +1.2%. Healthcare -1.7%.

Shares in Asia were mixed to lower, with the MSCI Asia Pacific Index falling 0.5%. Stocks fell in Tokyo, where attention is focused on the Bank of Japan’s policy announcement
due Thursday. Vietnam’s benchmark extended its decline to as much as 4.3%, with fund managers pointing to profit-taking after the recent strong rally.  South Korean shares gained as the won weakened. Indonesian stocks rallied late in the session after the
country pledged to use its fiscal and monetary firepower to ensure economic growth is maintained at 5% this year. China stocks ended higher as a new round of Sino-US trade talks continued. Chinese childcare-related stocks advance after the government rolled
out a new subsidy program across the nation in an effort to boost the birth rate. India has overtaken China to become the top exporter of smartphones to the US, according to research firm Canalys, reflecting the shift in manufacturing supply chain away from
Beijing. Smartphones assembled in India accounted for 44% of US imports in the second quarter, a significant increase from just 13% in the same period last year. Vietnam -4.1%, Taiwan -0.9%, Philippines -0.8%, Nikkei 225 -0.8%, Singapore -0.3%, Hang Seng Index
-0.1%. Thailand +1.4%, Kospi +0.7%, Sensex +0.5%, CSI 300 +0.4%, ASX 200 +0.1%, Indonesia +0.05%.

FIXED INCOME: 
 

Treasuries edge higher across maturities in early US trading after erasing small declines. Price action is similarly muted in core European bond markets. US session
features last of this week’s three coupon auctions and a heavy slate of economic data including June JOLTS job openings. Major events later this week include Wednesday’s Fed rate decision and Friday’s July employment report.  Also in focus will be the Treasury
Department’s update of debt-sales plans, due Wednesday. 10-year yield is lower by 3bps at 4.39%; the curve is flatter by 1.5bps. This week’s compressed coupon auction concludes with $44 billion 7-year note sale at 1pm, the last coupon auction of the May-July
financing quarter.  Futures imply a 97% chance the Fed will keep rates at 4.25%-4.5% at its meeting on Wednesday. Canada’s central bank also meets on Wednesday and again is widely expected to hold rates at 2.75%. Japan’s two-year bond auction saw the strongest
demand since October, as yields neared their highest levels since 2008.

METALS: 

Gold steadied as investors braced for a Federal Reserve policy decision, economic data, and US trade negotiations outcomes. Bullion traded in a narrow range Tuesday
after losing ground in the previous session amid a rally in the dollar. Spot gold climbs $6 to around $3,320/oz. Gold may hit $4,000 by the end of next year as the Fed lowers interest rates, the dollar drops, and central banks keep expanding holdings, according
to Fidelity International. Trump’s copper-supply deals may weaken the impact of upcoming US tariffs on prices, Goldman said. The bank withdrew its long Comex-LME spread trade recommendation. Spot gold +0.15%, Silver -0.2%, Copper futures +0.1%.

ENERGY:   

Oil modestly extends gains, lifted by hopes of improved economic activity after the US-EU trade deal, a potential US-China tariff truce and Trump’s shorter deadline
for Russia to end the Ukraine war. Brent traded near $70 a barrel following a 2.3% increase in the previous session. Trump warned of “secondary sanctions” if Moscow doesn’t reach a ceasefire deal within 10-12 days, while the Kremlin made it clear that President
Putin is unlikely to change course.  Oil prices were also supported by news of a possible extension of the trade truce between the US and China, with top economic officials from both countries having met in Stockholm on Monday for more than five hours of talks.
The discussions are expected to resume today. WTI +0.3%, Brent +0.3%, US Nat Gas +2.2%, RBOB +0.5%. 

CURRENCIES: 

In currency markets, the dollar index adds to yesterday’s gain after the rush out of short positions lifted it 1% in the prior session.  The dollar rose to its strongest
level in more than five weeks on speculation US data releases will offer further signs of economic resilience. The euro extends its decline after falling 1.3% on Monday as investors pondered the downside of the US-EU trade deal and the reality that punishing
tariffs were here to stay. Politicians across Europe lined up to condemn the trade deal. France, on Monday, called the framework trade agreement a “dark day” for Europe, saying the bloc had caved in to Trump with an unbalanced deal.  US$ Index +0.4%, GBPUSD
-0.15%, EURUSD -0.5%, USDJPY +0.1%, AUDUSD -0.4%, NZDUSD -0.4%, USDCHF +0.4%, USDCAD +0.25%, USDSEK +0.6%, USDNOK +0.4%.

Bitcoin +0.4%, Ethereum +1%  

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
• Afya (AFYA) Raised to Neutral at Citi; PT $14
• Alaska Air (ALK) Raised to Buy at CFRA; PT $61
• BlackLine (BL) Raised to Outperform at Raymond James; PT $67
• CF Industries (CF) Raised to Neutral at JPMorgan; PT $92
• Edwards Life (EW) Raised to Buy at BTIG; PT $100
• Raised to Outperform at Daiwa; PT $89
• Equity LifeStyle (ELS) Raised to Overweight at Barclays; PT $67
• Generac (GNRC) Raised to Buy at Guggenheim; PT $190
• Healthcare Services (HCSG) Raised to Outperform at Macquarie; PT $16
• Sarepta (SRPT) Raised to Outperform at Oppenheimer; PT $37
• Raised to Neutral at JPMorgan; PT $24
• Downgrades
• Adaptimmune (ADAP) ADRs Cut to Neutral at HC Wainwright
• Albemarle (ALB) Cut to Underperform at Baird; PT $60
• Cadence Design (CDNS) Cut to Neutral at Piper Sandler; PT $355
• Domino’s Pizza (DPZ) Cut to Sector Perform at RBC; PT $500
• Healthpeak Properties (DOC) Cut to Sector Perform at Scotiabank
• Orchid Island (ORC) Cut to Sell at Jones
• Prime Mining Corp (PRYM CN) Cut to Sell at TD Cowen; PT C$3.75
• Tapestry (TPR) Cut to Neutral at BofA
• Whirlpool (WHR) Cut to Sell at Accountability Research; PT $78
• Cut to Underperform at BofA; PT $70
• Initiations
• Atai Life Sciences (ATAI) Rated New Outperform at Oppenheimer; PT $14
• Brookfield Asset Management (BAM CN) Rated New Outperform at National Bank; PT C$97.40
• Brookfield Corp (BN CN) Rated New Outperform at National Bank
• Comstock Inc (LODE) Rated New Buy at Ladenburg Thalmann; PT $12
• CrowdStrike (CRWD) Rated New Neutral at Fubon; PT $500
• D-Wave Quantum (QBTS) Rated New Buy at Rosenblatt Securities Inc
• EssilorLuxottica (EL FP) ADRs Rated New Outperform at BNPP Exane
• GE Vernova (GEV) Rated New Hold at Baptista Research; PT $694.90
• IonQ (IONQ) Rated New Buy at Rosenblatt Securities Inc; PT $70
• Lionsgate Studios (LION) Rated New Peerperform at Wolfe
• Manhattan Associates (MANH) Rated New Underperform at Baptista Research
• Pentair (PNR) Rated New Outperform at Baptista Research; PT $118.80
• Sanuwave Health (SNWV) Rated New Buy at Roth Capital Partners; PT $49

Data sources: Bloomberg, Reuters, CQG

David Wienke