TODAY’S GAME PLAN: from the trading
desk, this is not research
TODAY’S ECONOMIC DATA:
8:30ET Change in Nonfarm, Private, and Manufacturing Payrolls; Average Hourly Earnings, Unemployment and Underemployment Rate; FED enters external communications blackout ahead
of September’s meeting
Highlights and News:
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Apple’s India sales hit a record $9 billion last fiscal year
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Broadcom to help OpenAI create AI chip to take on Nvidia
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Trump signs Japan trade deal, includes max 15% tariffs and $550 billion Japan-US investment fund
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Trump: ‘WE’VE LOST INDIA AND RUSSIA TO DEEPEST, DARKEST, CHINA”
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Angela Rayner resigns as UK Deputy Prime Minister
Stocks around the world climb higher before today’s US nonfarm payrolls report. Investors hope the data will strike the balance of a softer labor market that clears
the way for policy easing without undercutting confidence in the economy’s strength. Shares in Asia are up as market participants digest the formalized US-Japan trade deal and China’s threat of measures to cooldown the stock market rally. Also in the region,
Thailand elects Anutin Charnivrakul as prime minister by parliament, and ties are strengthened between leaders from China, India and North Korea. US Treasuries mostly unchanged, two-year yield at the lowest in nearly a year while the dollar is on track for
its weakest day of the week. Euro area 2Q household consumption rises less than expected, up 0.1% Q/Q versus +0.2% estimated. Other government bonds held steady after a survey signaled the European Central Bank has finished cutting rates. Today’s US jobs report expects
a rise of just 75,000, while the unemployment rate is expected to edge up to 4.3%.
EQUITIES:
US equity futures rise behind semiconductor performance and a positive outlook on payrolls outcome later today. Shares of Broadcom are up over 11% after they announced a pact with OpenAI
to create an AI chip and expect fiscal 2026 AI revenues to improve significantly. President Donald Trump said he would be imposing tariffs on semiconductor imports “very shortly” but spare goods from companies like Apple Inc. that have pledged to boost their
US investments. JPMorgan Market Intelligence estimates a better than 90% chance that the S&P 500 will advance following the payrolls report, noting that the real risk lies in a substantially stronger-than-expected report.
Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.5%, Russell 2000 +0.2%, DJI -0.1%
In pre-market trading, Broadcom (AVGO) is up 11% as the chipmaker is said to be helping OpenAI design and produce an artificial intelligence accelerator from 2026.
It also said that its artificial intelligence outlook will improve “significantly” in fiscal 2026. BioNTech ADRs (BNTX) gains 10% after the drugmaker said a late-stage trial of an experimental therapy for breast cancer met its primary endpoint. Braze (BRZE)
climbs 18% as the cloud software company beat its second-quarter revenue and third-quarter revenue forecast estimates. DocuSign (DOCU) rises 6.6% after the e-signature company reported second-quarter results that beat expectations and raised its full-year
forecast. Lululemon (LULU) falls 18% after slashing its outlook, disappointing investors for a third straight quarter as the company struggles to meet high expectations and balance tariff expenses in a difficult consumer environment. Samsara (IOT) is up 12%
as the US hardware-software platform company boosted its adjusted earnings guidance for the full year.
Shares in Europe rise for a third straight session behind mining and technology sectors in the region. ASML Holding NV and other European chip stocks climb after Broadcom’s
strong results, the Dutch chip maker is up 1.6% after an upgrade at UBS. STMicroelectronics rises as much as 5%, the most since July following an upgrade from BNP Paribas. Eurozone data shows disappointing consumption growth at 0.1% and a 0.5% rise in government
spending. German factory orders unexpectedly slumped 2.9% in July, the biggest slide since January. Orsted A/S fell 1.8% after the Danish wind farm developer issued a profit warning, citing lower-than-expected wind speeds. UK Deputy Prime Minister, Angela
Rayner, resigns from her position while under review following an ethics report on tax affairs. Stoxx 600 +0.2%, DAX +0.2%, CAC flat, FTSE 100 +0.2%, IBEX35 +0.1%
Asian stocks make a full-recovery from their early-week selloff behind a rebound in Chinese equities and bullish sentiment following the US-Japan trade deal cementing
a maximum 15% tariffs on most products. The MSCI Asia Pacific Index rose 1.1% behind broad strength in the region and outperformance in China, Hong Kong, Japan, and Taiwan. Japanese automakers jumped after the news, including Mazda and Nissan who earn over
50% of their revenues in North America. Toyota Motor Corp. climbed as much as 3.5% before paring back gains to 2%. Chinese sport stocks climb as State Council issues guidelines on boosting sports consumption and the industry’s development. Chinese chip suppliers
also rise after Chinese semiconductor equipment maker SiCarrier reports it has gotten more than 10b yuan ($1.4b) of orders from clients including SMIC and Hua Hong. CSI 300 +2.2%, Hang Seng Index +1.4%, ASX 200 +0.5%, Sensex flat, Taiwan +1.3%, Philippines
+0.7%. Thailand +1.0%, Singapore +0.2%, Topix +0.8%, Indonesia -0.2%, Kospi +0.1%.
FIXED INCOME:
US treasuries hold steady ahead of August payroll data. Yields are marginally richer on the day, outperformed by gilts, where a broader bull-flattening move has been
seen over the London session. While today’s data results are unlikely to impact any rate decisions in September, a weaker-than-expected print could amplify calls for accelerated cuts by year-end. US 10-yr yield: 4.15%; US 2-yr yield: 3.6%
METALS:
ENERGY:
Oil prices see another drop ahead of this weekend’s OPEC+ meeting. Risks of increased output contend with geopolitical tensions of the US pressuring buyers of Russian
crude in efforts to make progress on a truce in Ukraine. President Trump told European leaders to stop buying Russian oil during a call, also urging them to exercise economic pressure on China. Market sentiment has been weighed down by growing worries over
energy demand driven by ongoing trade tariff uncertainty. WTI -0.8%, Brent -0.7%, US Nat Gas +0.4%, RBOB -0.7%.
CURRENCIES:
The US dollar index sees its worst performance of the week ahead of Friday’s jobs report. Down against most G-10 peers, markets are fully pricing in a Fed rate cut
this month. USD/JPY drops as much as 0.3% as the Bank of Japan considers another rate hike after workers’ real wages rose for the first time this year. The Euro strengthens against the dollar amid high volatility and key catalysts, including next week’s CPI
release and upcoming ECB meeting. US$ Index flat -0.4%, GBPUSD +0.3%, EURUSD 0.3%, USDJPY +0.2%, AUDUSD +0.4%, NZDUSD +0.5%, USDCHF +0.3%, USDCAD +0.2%, USDSEK +0.5%, USDNOK +0.3%
Bitcoin +1.8%, Ethereum +2.6%
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
- Amazon (AMZN) Raised to Buy at Punto Casa de Bolsa
- Crown Holdings (CCK) Raised to Buy at Truist Secs; PT $118
- Duluth (DLTH) Raised to Outperform at Baird; PT $7
- Healthcare Realty Trust (HR) US Raised to Sector Outperform at Scotiabank; PT $20
- Downgrades
- BNY Mellon (BK) Cut to Hold at CFRA
- C.H. Robinson (CHRW) Cut to Sell at CFRA
- Ciena (CIEN) Cut to Neutral at B Riley; PT $113
- Credicorp (BAP) Cut to Hold at HSBC; PT $255
- FirstCash (FCFS) Cut to Hold at Loop Capital; PT $145
- JB Hunt (JBHT) Cut to Neutral at UBS
- Knight-Swift (KNX) Cut to Neutral at UBS
- Lululemon (LULU) Cut to Market Perform at Oppenheimer
- Cut to Inline at Evercore ISI; PT $180
- Cut to Market Perform at Telsey; PT $200
- Cut to Market Perform at William Blair
- Cut to Hold at Stifel; PT $205
- NiSource (NI) Cut to Hold at Jefferies; PT $44
- Schneider National (SNDR) Cut to Neutral at UBS
- Initiations
- Alamos Gold (AGI CN) Reinstated Buy at William O’Neil
- Avalo Therapeutics (AVTX) Rated New Buy at TD Cowen
- Badger Infrastructure Solutions Ltd (BDGI CN) Rated New Buy at TD Cowen
- Blue Owl Capital Corp (OBDC) Rated New Buy at Clear Street; PT $15
- Blue Owl Technology Fina (OTF) Rated New Hold at Clear Street; PT $15
- Capital Southwest (CSWC) Rated New Hold at Clear Street; PT $22
- Cargojet (CJT CN) Rated New Outperform at Raymond James; PT C$132
- Chagee Holdings (CHA) ADRs Rated New Neutral at Macquarie; PT $19
- Crescent Capital BDC (CCAP) Rated New Buy at Clear Street; PT $16.50
- Dolby Labs (DLB) Rated New Neutral at Baird; PT $74
- Duolingo (DUOL) Rated New Neutral at Baird; PT $280
- Enerpac Tool (EPAC) Rated New Buy at Roth Capital Partners; PT $48
- Eos Energy (EOSE) Rated New Hold at Jefferies; PT $6.50
- Esab (ESAB) Rated New Buy at Roth Capital Partners; PT $150
- Fannie Mae (FNMA) Reinstated Neutral at B Riley; PT $10
- Fidus Investment (FDUS) Rated New Buy at Clear Street; PT $21
- Gladstone Capital (GLAD) Rated New Hold at Clear Street; PT $25.50
- Gladstone Investment (GAIN) Rated New Buy at Clear Street; PT $14.50
- Great Elm Capital (GECC) Rated New Buy at Clear Street; PT $11.50
- Hermes (RMS FP) ADRs Rated New Outperform at BNPP Exane; PT $326.60
- Hinge Health (HNGE) Rated New Neutral at Baird; PT $56
- Karman Holdings (KRMN) Rated New Strong Buy at Raymond James; PT $100
- Lincoln Electric (LECO) Rated New Buy at Roth Capital Partners; PT $279
- Lionsgate Studios (LION) Reinstated Outperform at Baird; PT $8
- Luckin Coffee (LKNCY) ADRs Rated New Outperform at Macquarie; PT $52
- Nutrien (NTR CN) Rated New Sector Perform at National Bank; PT C$88.52
- Omada Health (OMDA) Rated New Neutral at Baird; PT $24
- QXO (QXO) Rated New Outperform at Raymond James; PT $28
- Ralph Lauren (RL) Rated New Buy at William O’Neil
- Revolution Medicines (RVMD) Rated New Buy at Truist Secs; PT $99
- Runway Growth Finance (RWAY) Rated New Hold at Clear Street; PT $11
- Saratoga Investment (SAR) Rated New Hold at Clear Street; PT $24
- Sixth Street Specialty Lending (TSLX) Rated New Hold at Clear Street
- Starz Entertainment (STRZ) Rated New Neutral at Baird; PT $13
- TKO (TKO) Rated New Outperform at Baird; PT $225
- Twilio (TWLO) Reinstated Buy at Rosenblatt Securities Inc; PT $140
- Waystar (WAY) Rated New Outperform at Baird; PT $44
Data sources: Bloomberg, Reuters, CQG
Bryan Duong
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