Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET Initial Jobless Claims, Nonfarm Productivity, Unit Labor Costs; 10:00ET Wholesale
Trade Sales, Wholesale Inventories, Fed’s Bostic speaks; 11:00ET NY Fed 1-Yr Inflation Expectations; 1:00ET 30-Year Bond Auction; 3:00ET Consumer
Credit, Mexico Rate Decision (25 bps cut exp.)

Highlights and News:  

• Trump eyes 100% chips tariff, exempting firms that invest in the US
  
• Temporary Fed governor likely to be named in 2-3 days, Trump says
• KREMLIN SAYS TRUMP-PUTIN MEETING IN NEXT FEW DAYS AGREED: IFX
  
• A discrepancy emerged between Japan and US as to whether tariffs are stacked
• France’s biggest wildfire since 1949 not yet under control
• Americans consume more than half their calories from ultra-processed foods, CDC says

Global stocks rose as Trump’s global tariffs kicked in, as upbeat earnings, growing hopes for a ceasefire in Ukraine and expectations for US rate cuts boosted sentiment.
Trump’s new tariffs officially took hold, starting at midnight. Switzerland, hit with the highest levies among developed countries, may hit back by cancelling a big order for fighter jets. Trump also announced plans to impose a 100% tariff on semiconductor
imports, though he would exempt companies moving production into the US. Germany’s industrial output fell in June to its lowest level since the pandemic in 2020, continuing last year’s declines amid weakening foreign demand and increasing competition from
China. The statistics office also revised data for May to a 0.1% drop from the previous month, compared with a provisional figure of a 1.2% increase. Japan’s government cut its growth forecast for this fiscal year as US tariffs slow capital expenditure and
persistent inflation weighs on private consumption. The Bank of England cut its key rate by 25bps to 4%, as expected, saying any future rate cuts will need to be made gradually and carefully. Meanwhile, Putin and Trump will meet in the coming days in what
would be the first bilateral meeting at the highest level between the two countries since 2021.

EQUITIES:   

US equity futures rise after the Kremlin confirmed Presidents Putin and Trump will meet for summit talks, raising hopes of a truce in Russia’s war with Ukraine.  Market sentiment got
a boost earlier after Trump announced that companies producing goods in the US, such as Apple, would be eligible for exemptions from his proposed 100% levy on chip imports. Eli Lilly plunges premarket after it reported results from an obesity pill study that
showed it didn’t perform as well as Wall Street was expecting, a boon for rival Novo Nordisk A/S.  Trump will sign an executive order today that aims to allow private equity, real estate, cryptocurrency, and other alternative assets in 401k accounts.     

Futures ahead of the data/bell: E-Mini S&P +0.6%, Nasdaq +0.75%, Russell 2000 +0.9%, DJI +0.5%.

In pre-market trading, Eli Lilly (LLY) shares tumbled 12% after the company gave disappointing data from a late-stage trial of its new weight-loss pill. Airbnb (ABNB)
is down 6% after warning that growth rates may not keep up later this year due to tough year-ago comparisons. Aris Water Solutions (ARIS), which helps manage water produced from oil drilling, climbs 20% after the company agreed to be bought by Western Midstream
Partners. Corning (GLW) gains 5% after Apple said it’s planning to onshore 100% of iPhone and Watch cover glass production to the US as part of an expanded $2.5 billion partnership with the high-tech glassmaker. CRH (CRH) jumps 8% after the building materials
company narrowed its full-year adjusted Ebitda guidance to the high end of its prior range. Crocs (CROX) falls 13% after forecasting that 3Q revenue will be down about 11% to 9%. DoorDash (DASH) gains 8.9% after the food-delivery company reported second-quarter
results that beat. Duolingo (DUOL) soars 23% after the language-learning software company reported second-quarter results that beat expectations. Dutch Bros (BROS) is up 18% after the restaurant chain lifted its total revenue forecast for the full year. Fortinet
(FTNT) tumbles 21% after the software company gave an update to its firewall refresh cycle. Peloton Interactive Inc. (PTON) gains 12% as the company preached confidence in a turnaround plan under new management. Sarepta (SRPT) is up 7% after the drugmaker
reported second quarter revenue that beat. SharkNinja (SN) rises 5% after the home-appliance maker boosted its adjusted earnings per share forecast. Sunrun (RUN) jumps 18% after the solar energy company reported second-quarter revenue that beat. Vistra Corp.
(VST) falls 7% after the residential electricity provider operating posted revenue for the second quarter that missed. Apple (AAPL) +2%, Nvidia (NVDA) +1.4%, Meta Platforms (META) +0.9%, Alphabet (GOOGL) +0.6%, Microsoft (MSFT) +0.6%, Tesla (TSLA) +0.5%, Amazon
(AMZN) +0.1%.

European gauges gain on one of the last busy days of the earnings season. Plans for a meeting between President Trump and President Putin over the war in Ukraine helped
sentiment. European defense stocks slump, while stocks with exposure to Ukraine and Russia gain. Danish shipping giant Maersk, whose results are seen as a key indicator of global trade trends for investors and economists, reported profits that beat expectations.
InterContinental Hotels jumps to the highest level since March, after the company reported.  German defense company Rheinmetall drops as its results missed estimates, while insurer Allianz gained over 4% after the German insurance group posted a strong second-quarter
showing.  KBC jumps as much as 6% after the Belgian bank beat expectations. Harbour Energy shares rise as much as 21% after the UK oil and gas company boosted guidance while announcing a $100m buyback. The BOE cut rates to the lowest in over two years, but
the 5-4 decision was closer than expected and — for first time in the MPC’s 28-year history — two rounds of voting were needed. Officials said upside risks to inflation have risen and now expect inflation to hit 4% next month. Stoxx 600 +0.9%, DAX +1.6%, CAC
+1%, FTSE 100 -0.8%. Technology +1.9%, Travel & Leisure +1.8%, Insurance +1.8%, Chemicals +1.8%. Aero & Defense -1.7%, Telecom -1.7%, Utilities -1%.

Shares in Asia rose, led by technology stocks as some of the region’s largest chipmakers were expected to win exemptions from Trump’s threatened 100% chip tariff. The
MSCI Asia Pacific Index advanced 1%, rising for the fourth straight day, with Japanese gauges hitting a record high. The US has imposed higher tariffs than Japan expected on a broad range of its goods, according to a senior Japanese official. Japan unexpectedly
faces “stacking” tariffs, where a new 15% levy is added to existing import taxes. Stocks in Taiwan surged to a more than one-year peak, with chipmaker TSMC gaining nearly 5% to a new all-time high. The Kospi gained nearly 1%, with South Korea’s top trade envoy
saying Samsung Electronics and SK Hynix would not be subject to 100% tariffs. Surging Chinese exports to Southeast Asia and Europe pointed to major changes underway in global trade as a result of Washington’s tariffs. China’s exports last month grew much faster
than economists expected, with another huge fall in trade with the US. Taiwan +2.4%, Kospi +0.9%, Singapore +0.7%, Topix +0.7%, Hang Seng Index +0.7%, Vietnam +0.5%, Sensex +0.1%, CSI 300 was flat. ASX 200 -0.1%, Indonesia -0.2%.

FIXED INCOME: 
 

Treasuries are steady, with yields broadly within one basis point of Wednesday’s close, despite slide in gilts which sharply underperform following a 4-4-1 Bank of
England vote to cut rates by 25bp. UK 2-year yields higher by around 6bp on the day up to around 3.88% following the announcement. In the US, focus turns to early data and then a $25 billion 30-year new-issue bond sale. US 10-year yield is up ~1 basis point
to 4.24%; 2s10s is flat; 5s30s -1bp.

METALS: 

Gold pared earlier gains as markets weighed prospects for a truce in Ukraine after the Kremlin confirmed Presidents Vladimir Putin and Donald Trump would hold talks
in the next few days. Spot gold is slightly higher after pulling back off the overnight high around $3,397 per ounce. Bloomberg earlier reported that the Kremlin is considering options including an air truce, falling short of committing to a total ceasefire.
Spot gold +0.2%, Silver +1.2%, Copper futures +0.1%.

ENERGY:   

Oil prices steadied with traders awaiting the outcome of a planned meeting between Presidents Vladimir Putin and Donald Trump. Russian crude is being offered to Indian
buyers at more than $5 below Brent, according to Kpler. Reliance Industries, the top private refiner in India, has warned in its annual report that tariff uncertainties and geopolitical events could affect global crude oil flows and oil market balances. Wednesday’s
trading session saw a deluge of news around Trump’s push for a ceasefire in Ukraine, with the president doubling tariffs on Indian goods due to the nation’s purchases of Russian energy. The levies won’t take effect for another three weeks and stopped short
of more punitive measures around oil supplies that some traders had feared. WTI +0.5%, Brent +0.5%, US Nat Gas +1.3%, RBOB +0.6%. 

CURRENCIES: 

In currency markets, the dollar steadied after four days of declines on expectations of easier policy from the Federal Reserve. Sterling climbed to its highest level
against the dollar in more than a week after the Bank of England’s decision to cut interest-rates was a far closer call than expected. The BOE also slightly increased its inflation forecast, now expecting it to peak at 4% in September. Taiwan dollar outperforms
all Asian peers after TSMC is exempted from US chip tariffs. Philippine peso outperforms most Asian peers after better-than-expected GDP print. Offshore yuan is largely unmoved following China’s trade data. US$ Index +0.1%, GBPUSD +0.4%, EURUSD -0.15%, USDJPY
~flat, AUDUSD +0.3%, NZDUSD +0.4%, USDCHF +0.3%, USDCAD ~flat, USDSEK +0.1%, USDNOK +0.2%.

Bitcoin +1.1%, Ethereum +4.2%. 

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
• AbbVie (ABBV) Raised to Outperform at Daiwa; PT $214
• AMD (AMD) Raised to Hold at DZ Bank; PT $165(Earlier)
• BP (BP/ LN) ADRs Raised to Buy at Berenberg; PT $40
• CommScope (COMM) Raised to Buy at BofA; PT $20
• EBay (EBAY) Raised to Neutral at Arete; PT $91
• Emerson Electric (EMR) Raised to Equal-Weight at Barclays; PT $127
• Esab (ESAB) Raised to Buy at Stifel; PT $141
• Etsy (ETSY) Raised to Neutral at Arete; PT $54
• Fastenal (FAST) Raised to Outperform at Baird; PT $55
• HubSpot (HUBS) Raised to Overweight at Piper Sandler; PT $675
• Klaviyo (KVYO) Raised to Buy at Citi; PT $50
• Lyft (LYFT) Raised to Buy at Roth Capital Partners; PT $19
• Mesa Labs (MLAB) Raised to Equal-Weight at Wells Fargo; PT $67
• NuVista Energy (NVA CN) Raised to Outperform at National Bank; PT C$18.50
• Parsons (PSN) Raised to Outperform at Baird; PT $92
• Premium Brands (PBH CN) Raised to Outperform at RBC; PT C$108
• Shoals Technologies (SHLS) Raised to Buy at Roth Capital Partners
• Thomson Reuters (TRI CN) Raised to Sector Outperform at Scotiabank
• Uber (UBER) Raised to Buy at Punto Casa de Bolsa; PT $105.64
• Downgrades
• Airbnb (ABNB) Cut to Hold at Punto Casa de Bolsa; PT $138.36
• Alamo Group (ALG) Cut to Neutral at DA Davidson; PT $225
• Brookfield Asset Management (BAM CN) Cut to Hold at Deutsche Bank; PT $58
• Campbell’s (CPB) Cut to Neutral at Piper Sandler; PT $34
• Caterpillar (CAT) Cut to Underweight at Morgan Stanley; PT $350
• Coca-Cola Europacific (CCEP) Cut to Equal-Weight at Morgan Stanley
• Fortinet (FTNT) Cut to Equal-Weight at Morgan Stanley; PT $78
• Cut to Sector Weight at KeyBanc
• Cut to Neutral at Piper Sandler; PT $90
• Informatica (INFA) Cut to Neutral at Guggenheim
• International Flavors (IFF) Cut to Market Perform at Oppenheimer
• IonQ (IONQ) Cut to Neutral at DA Davidson; PT $35
• Joby Aviation (JOBY) Cut to Neutral at HC Wainwright
• Light & Wonder (LNW) Cut to Neutral at JPMorgan; PT $95
• MaxCyte (MXCT) Cut to Market Perform at William Blair
• Opendoor Technologies (OPEN) Cut to Sell at Citi; PT 70 cents
• Shopify (SHOP CN) Cut to Sector Perform at ATB Capital; PT C$220
• Six Flags (FUN) Cut to Hold at Jefferies; PT $25
• Staar Surgical (STAA) Cut to Hold at Stifel; PT $28
• Tandem Diabetes (TNDM) Cut to Neutral at Piper Sandler; PT $14
• Initiations
• Cerrado Gold (CERT CN) Rated New Buy at HC Wainwright; PT C$1.60
• FirstEnergy (FE) Rated New Underperform at Baptista Research
• Siemens Energy (ENR GR) ADRs Rated New Outperform at BNPP Exane; PT $136

Data sources: Bloomberg, Reuters, CQG

David Wienke