Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET Personal Income, Personal Spending, *PCE*, Advance Goods Trade Balance, Wholesale
Inventories, Retail Inventories; 9:45ET MNI Chicago PMI; 10:00ET UofMich Sentiment, Lisa Cook Emergency Hearing; 11:00ET Kansas City Fed Services Activity

Highlights and News:  

• Xi, Putin and Modi to meet in China this weekend
• Mexico suspends parcel shipments to US over ‘de minimis’ rule ending
• Alibaba Creates AI Chip to Help China Fill Nvidia Void — WSJ
• White House is discussing plan to use naval base near Chicago for ICE operations
• Jerry Jones bought the Dallas Cowboys in 1989 for ~$140mm; Micah Parsons signs deal with Packers for $188mm

Global stocks fell with technology stocks dragging markets lower as traders cut risk ahead of US inflation data. Inflation in France, Spain, and Italy was less than
expected, with France’s headline number dipping to 0.8% and Spain and Italy seeing unchanged readings of 2.7% and 1.7%. An ECB poll published today shows little in the way of inflation worries among the continent’s consumers. The US “de minimis” exemption,
which applies to packages valued under $800, lose their duty-free status today as the government ends a loophole that has underpinned billions of dollars in global commerce. Brazilian President Lula authorized steps to retaliate against Trump’s 50% tariffs,
with formal US notification due today. Vladimir Putin will meet Xi Jinping and Narendra Modi at a summit in Tianjin, China, this weekend to discuss energy ties.

EQUITIES:   

US equity futures are lower after the S&P 500 and Dow Jones Industrial Average closed at record highs yesterday. Today’s data is expected to show core PCE — the Fed’s preferred gauge
for tracking inflation — rising 2.9% in July, the fastest pace in five months. Dell Technologies slid more than 6% post-market after reporting slower sales of artificial intelligence servers. Marvell Technology shares are down 12% in premarket trading as the
chipmaker reported second-quarter results that featured a disappointing read on its data center business. Next week the calendar shifts to September, historically the weakest month for US stocks, with institutional investors rebalancing, retail trading slowing,
and corporate buybacks pausing. Meanwhile, Lisa Cook will seek a temporary restraining order at a hearing today to block her firing by President Trump. FHFA Director Bill Pulte filed a new criminal referral against the Fed governor.

Futures ahead of the data/bell: E-Mini S&P -0.2%, Nasdaq -0.4%, Russell 2000 -0.1%, DJI -0.2%

In pre-market trading, Affirm Holdings (AFRM) climbs 15% after the financial technology company reported fourth-quarter results that beat expectations. Alibaba Group
ADRs (BABA) rise 3% after the company reported a surge in revenue from China’s AI boom, helping offset a surprise drop in profit tied to a worsening battle with Meituan and JD.com Inc. in internet commerce. Separately, Alibaba developed a new chip compatible
with the Nvidia platform, the WSJ reported. Ambarella (AMBA) jumps 18% after the US semiconductor device maker beat revenue and EPS estimates and increased its fiscal 2026 revenue growth estimate. Caterpillar (CAT) falls 3% after the industrial giant warned
that it faces a larger-than-anticipated tariff headwind of as much as $1.8 billion this year. Celsius Holdings (CELH) rises 9% after PepsiCo Inc. increased its stake in the energy-drink maker. Dell Technologies (DELL) falls 6% after the company booked fewer
sales of artificial intelligence servers than in the previous three months and reported profit margins that fell short of analysts’ estimates. Elastic (ESTC) rises 16% after the software company reported first-quarter results that beat expectations and raised
its full-year forecast. Marvell Technology (MRVL) falls 13% after reporting data center revenue for the second quarter that missed the average analyst estimate. Petco (WOOF) jumps 22% after the US pet food maker gave 3Q guidance that topped expectations and
nudged up its outlook for 2026. SentinelOne (S) gains 8% after the software company raised its revenue forecast for the year. Ulta Beauty (ULTA) climbs 3% after the cosmetics retailer boosted its comparable sales forecast for the full year.

European gauges are broadly lower but well off the session lows, with bank and retail sectors leading losses. UK bank stocks slide after a think tank says Chancellor
of the Exchequer Rachel Reeves could raise billions of pounds of revenue by imposing a windfall tax on commercial lenders. Defense stocks advanced after German Chancellor Friedrich Merz said a meeting between the Russian and Ukrainian presidents is unlikely
to happen. Among individual names, Lotus Bakeries shares rise as much as 6.5% as BofA upgrades its rating on the maker of Biscoff cookies to buy from neutral. Pernod Ricard shares drop as much as 4.3% after analysts tempered the optimism stemming from the
spirit maker’s earnings beat on Thursday. Stoxx 600 -0.4%, DAX -0.2%, CAC -0.3%, FTSE 100 -0.2%. Banks -1.1%, Retail -1.1%, Technology -1%, Travel -1%. Aero & Defense +1.1%, Industrial Goods +0.2%.

Shares in Asia were mixed, with the MSCI Asia Pacific Index 0.1% lower, as a rally in Chinese equities was offset by losses in Japan amid profit taking. Chinese stocks
continued to march higher as optimism around solid state batteries supported gains. Chinese battery maker Contemporary Amperex Technology’s shares jumped to the highest in three years after a supplier indicated a strong outlook for sales. Investor excitement
continues to run high, with the onshore benchmark CSI 300 Index up nearly 10% this month, despite concerns over US tariffs and a property crisis. Elsewhere, Japanese stocks fell on profit-taking before the release of personal-consumption-expenditure data in
the US. Selling spread across a broad range of sectors, hitting exporters such as makers of electronics and cars, as well as banks and insurers. CSI 300 +0.7%, Singapore +0.4%, Hang Seng Index +0.3%, New Zealand +0.2%, Vietnam +0.1%. Taiwan was flat. ASX 200
-0.1%, Kospi -0.3%, Sensex -0.3%, Topix -0.5%, Philippines -0.6%, Thailand -1.1%, Indonesia -1.5%.

FIXED INCOME: 
 

Treasuries are under mild pressure with long-end yields about 2.5bp cheaper on the day and the curve a bit steeper.  Longer-dated US Treasuries fell, with the yield
on 30-year notes rising three basis points to 4.90%. 10-year is higher by 2bp at 4.23%. The Fed’s Christopher Waller again said he would support a quarter-point rate cut next month and signaled more easing over the next three to six months. A rally in perpetual
bonds is drawing concern as spreads on risky bank AT1 debt hit record lows, echoing exuberance before the financial crisis. Friday’s corporate new-issue activity is expected to stay muted following minimal activity seen Thursday, but is seen picking up dramatically
next week with syndicate desks forecasting $55 billion.

METALS: 

Gold nudges lower but remains close to all-time highs on escalating concerns about the Federal Reserve’s independence. Following Trump’s move to dismiss Fed Governor
Lisa Cook, the market is becoming increasingly concerned the Fed’s independence is being undermined, analysts say. This is driving a flight to safe-haven assets like gold. Focus this morning will be on US inflation data that will provide more cues on the Federal
Reserve’s rate cut trajectory. Copper is higher and on track for a fourth weekly advance, with positive economic data from the world’s two biggest economies buoying its demand outlook. Spot gold -0.2%, Silver -0.6%, Copper futures +1%.

ENERGY:   

Oil edged lower on course for a monthly loss, with trading dominated by concerns about a looming glut and geopolitical issues. Brent traded below $68 a barrel, with
the global benchmark about 5% lower this month. Trump was “not happy” about Moscow’s recent strikes on Ukraine and a meeting between Zelenskiy and Putin was unlikely, according to German Chancellor Friedrich Merz. Trump has threatened “very big consequences”
if Moscow doesn’t come to the negotiating table. Oil prices are poised for a weekly gain, caught between concerns over Russian supply disruptions and anticipated demand slowdown as the US summer driving season approaches its end. Elsewhere, Russian gas supplies
to China are up 28% this year, according to Gazprom. WTI -0.35%, Brent -0.35%, US Nat Gas +1%, RBOB -0.4%.

CURRENCIES: 

In currency markets, the dollar edges higher, trying to snap a run of three weekly losses. The rupee plunged to a record low, as higher US tariffs took effect. Sterling
leads G-10 losses; British companies are upping their protection against foreign-exchange swings. The yen fell as inflation in Tokyo sharply eased, led by government utility subsidies, though it stayed well above the Bank of Japan’s target. US$ Index +0.25%,
GBPUSD -0.45%, EURUSD -0.2%, USDJPY +0.25%, AUDUSD -0.1%, NZDUSD -0.05%, USDCHF +0.2%, USDCAD +0.05%, USDSEK +0.05%, USDNOK +0.02%.

Bitcoin -1.5%, Ethereum -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
• Ambarella (AMBA) Raised to Buy at Summit Insights
• Dollar Tree (DLTR) Raised to Outperform at Telsey; PT $130
• Southwest Gas (SWX) Raised to Buy at BofA; PT $84
• Downgrades
• Aspen Insurance (AHL) Cut to Neutral at Citi; PT $37.50
• Marvell Technology (MRVL) Cut to Neutral at BofA; PT $78
• Outlook Therapeutics Inc (OTLK) Cut to Neutral at HC Wainwright; PT $1
• scPharma (SCPH) Cut to Neutral at HC Wainwright
• Vital Energy (VTLE) Cut to Hold at Texas Capital; PT $18
• Initiations
• Astera Labs (ALAB) Rated New Outperform at CICC; PT $190
• Founders Metals (FDR CN) Rated New Outperform at National Bank; PT C$6
• Geopark (GPRK) Rated New Outperform at Grupo Santander; PT $9
• Hesai Group (HSAI) ADRs Rated New Buy at William O’Neil
• Pennon (PNN LN) ADRs Rated New Outperform at BNPP Exane; PT $15.50
• ServiceTitan (TTAN) Rated New Market Perform at Raymond James
• Severn Trent (SVT LN) ADRs Rated New Neutral at BNPP Exane; PT $34.40
• SiTime (SITM) Reinstated Buy at William O’Neil
• Swatch (UHR SW) ADRs Rated New Underperform at BNPP Exane; PT $6.83
• United Utilities (UU/ LN) ADRs Rated New Outperform at BNPP Exane
• Veolia (VIE FP) ADRs Rated New Outperform at BNPP Exane; PT $22.50
• Viant (DSP) Rated New Buy at DA Davidson; PT $15

Data sources: Bloomberg, Reuters, CQG

David Wienke