Daily Game Plan

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

TODAY’S ECONOMIC DATA: 8:30ET CPI*, Real Avg Hourly Earnings, Jobless Claims;  12:00ET Household Change in New Worth;
1:00ET 30 Year Bond Auction; 2:00ET Federal Budget Balance

ECB LEAVES DEPOSIT FACILITY RATE AT 2.00%; EST. 2.00%. ECB RAISES INFLATION OUTLOOK FOR 2025, 2026, CUTS IT FOR 2027.

Highlights and News:  

• RIP Charlie Kirk – Manhunt underway after Charlie Kirk shot dead in Utah
• UK PM Starmer Fires Mandelson as Envoy to US After Epstein Emails
• MSNBC fired political consultant Matthew Dowd after comments in the wake of the Charlie Kirk shooting
• Trump administration ramps up campaign against EU climate rules
• Bid to punish Russia picks up in Senate

Global stocks make small gains as traders held back on major bets before today’s highly anticipated US inflation data. Policymakers at the European Central Bank are
expected to keep rates on hold for a second meeting and analysts see no more cuts this cycle. US investor interest in Chinese equities has jumped to the highest since the Covid pandemic due to the Asian nation’s tech innovation, steps to stabilize the economy
and improving liquidity, according to Morgan Stanley.  The EU will significantly ramp up sanctions against Russia and its enablers. The violation of Polish airspace by Russian drones represents “a serious escalation,” the bloc said. China is preparing to tackle
a backlog of unpaid local government bills to the private sector, with some estimates putting the arrears at more than $1 trillion.

EQUITIES:   

US equity futures nudge higher ahead of the CPI figures after the S&P 500 hit back-to-back all-time highs. US inflation figures this morning will provide further clues for the Federal
Reserve after softer producer prices fueled hopes for an outsized interest-rate cut next week. The Nasdaq also notched a record high close on Wednesday, helped by a nearly 36% surge in Oracle after an upbeat forecast that brought the cloud computing company
closer to joining the trillion-dollar club. Gun stocks also climbed before the bell, extending their rally from the previous session after conservative activist Charlie Kirk was shot dead at a university in Utah on Wednesday. The DOJ is investigating collapsed
subprime auto lender Tricolor for alleged loan fraud, including repeatedly pledging the same collateral, the FT reported. US Defense Department officials and Boeing execs are expected to visit India next week to negotiate the sale of about $4 billion of surveillance
aircraft.

Futures ahead of the data/bell: E-Mini S&P +0.2%, Nasdaq +0.3%, Russell 2000 +0.1, DJI +0.2%

 In pre-market trading, Avidity Biosciences (RNA) plunges 19% after offering $500 million in shares. Centene shares (CNC) climbs 10% after the health insurer reaffirmed
its adjusted earnings per share forecast for the full year. Ecovyst Inc. (ECVT) climbs 8% after Technip Energies NV agreed to buy the company’s advanced materials & catalysts business. Opendoor Technologies (OPEN) shares soar 36% after the company said co-founders
Keith Rabois and Eric Wu will rejoin the board and named Shopify’s Kaz Nejatian as chief executive officer. Oxford Industries (OXM) jumps 18% after the Tommy Bahama owner posted second-quarter profit that beat expectations. Red Cat Holdings (RCAT) rises 9%
after the drone company said its Black Widow System has been approved and added to the NATO Support and Procurement Agency catalog. Revolution Medicines (RVMD) gains 9% after the company reported updates from Phase 1 trials of daraxonrasib in pancreatic cancer.

European gauges rose as investors awaited an interest-rate decision from the European Central Bank and key US inflation data. Construction and retail stocks are leading
gains, while autos and real estate shares lag. Among individual movers, Gucci-owner Kering SA rose 2.4% after getting more time to exercise an option to buy the rest of fashion house Valentino. Buzzi rises as much as 7.2% after JPMorgan upgrades to overweight.
Technip Energies shares rise more than 5% after the engineering and technology company announced the acquisition of Ecovyst’s Advanced Materials & Catalysts business. Playtech surges as much as 12% following the gambling technology provider’s first-half results.
THG shares rise as much as 8.8% after the online retailer reported a strong outlook for the second half of the year. Stoxx 600 +0.35%, DAX +0.2%, CAC +0.8%, FTSE 100 +0.5%. Aero & Defense +1.5%, Retail +1.1%, Construction +1%, Travel & Leisure +0.7%. Autos
-0.4%, Real Estate -0.3%.

Shares in Asia were mixed as gains in mainland China countered declines in Hong Kong. MSCI’s Asia-Pacific index was little changed after five days of gains. Chinese
stocks capped their biggest advance since March, led by companies seen as major beneficiaries of the nation’s push for homegrown technology. Shares in Hong Kong saw modest losses with the biotech sector under pressure after the New York Times reported that
the Trump administration has been discussing severe restrictions on medicines from the region. South Korea stocks recovered from small losses after President Lee leaves stock tax debate to the parliament. CSI 300 +2.3%, Nikkei 225 +1.2%, Kospi +0.9%, Vietnam
+0.9%, Thailand +0.8%, Indonesia +0.6%, Sensex +0.1%. Hang Seng Tech –0.2%, ASX 200 -0.3%, Hang Seng Index -0.4%.

FIXED INCOME: 
 

Treasury yields are within a basis point of Wednesday’s closing levels ahead of the August CPI report, weekly jobless claims data and 30-year bond reopening. 10-year
yield is little changed near 4.05% and the curve is flatter by ~1bp. Auction cycle concludes with $22 billion 30-year reopening at 1pm; both the 10-year and Tuesday’s 3-year note auction drew lower-than-anticipated yields and produced record-low allotments
to primary dealers. WI 30-year yield near 4.70% is ~11bp richer than the August sale, which tailed by 2.1bp.

METALS: 

Gold is down $25 to about $3,616 an ounce, but analysts maintained that the bull run remained intact given the likelihood of interest rate reduction in the US and
geopolitical risks. All eyes turn to the US consumer price inflation for August. Spot gold -0.6%, Silver -0.4%, Copper futures -0.2%.

ENERGY:   

Oil prices eased as Brent crude slipped below $67 a barrel on forecasts for a record surplus next year. While the International Energy Agency raised projections slightly
for global oil demand through 2026, it lifted supply estimates even more. The IEA expects an oil glut next year, forecasting supply will exceed demand by 3.33 million barrels a day, with the US and Brazil leading non-OPEC+ growth at twice the pace of demand.
Saudi Arabia’s oil exports are set to jump this month as the twin impact of higher production and easing local demand from peak summer levels frees up supply.  WTI -1.1%, Brent -0.9%, US Nat Gas +0.7%, RBOB -1.3%. 

CURRENCIES: 

In currency markets, the dollar trades higher versus most of its major peers yet within tight ranges as investors await US inflation data, while the euro steadied
ahead of the ECB policy decision. The yen slipped after reports that conservative Sanae Takaichi will run for of Japan’s ruling LDP. Sterling eased as UK estate agents are reporting the most widespread decline in rental properties since the pandemic as the
prospect of higher taxes and tighter regulation prompts landlords to exit the market, a closely watched survey found. US$ Index +0.2%, GBPUSD -0.1%, EURUSD -0.1%, USDJPY +0.35%, AUDUSD -0.15%, NZDUSD -0.25%, USDCHF +0.05%, USDCAD +0.15%, USDSEK +0.3%, USDNOK
-0.05%.

Bitcoin +0.3%, Ethereum +2.4%  

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
• Aon PLC (AON) Raised to Overweight at Morgan Stanley; PT $430
• AvalonBay (AVB) Raised to Buy at Truist Secs
• Bill Holdings (BILL) Raised to Outperform at Wolfe; PT $70
• Chewy (CHWY) Raised to Buy at Deutsche Bank; PT $45
• Raised to Buy at Seaport Global Securities; PT $47
• EPR Properties (EPR) Raised to Equal-Weight at Wells Fargo; PT $56
• MGE Energy (MGEE) Raised to Neutral at Ladenburg Thalmann; PT $83
• Nvidia (NVDA) Raised to Buy at DA Davidson; PT $210
• Thermo Fisher (TMO) Raised to Overweight at Barclays; PT $550
• WP Carey (WPC) Raised to Overweight at Wells Fargo
• Zscaler (ZS) Raised to Buy at Freedom Finance; PT $320
• Downgrades
• AMD (AMD) Cut to Hold at Erste Group
• Apple (AAPL) Cut to Neutral at DA Davidson
• Cut to Reduce at Phillip Secs; PT $200
• Elme Communities (ELME) Cut to Hold at Truist Secs
• FedEx (FDX) Cut to Neutral at BofA
• Four Corners Property (FCPT) Cut to Equal-Weight at Wells Fargo; PT $27
• Hess Midstream (HESM) Cut to Neutral at Citi; PT $41
• Potbelly (PBPB) Cut to Hold at Lake Street; PT $17.12
• Cut to Hold at Craig-Hallum; PT $17.12
• UPS (UPS) Cut to Underperform at BofA
• Vimeo (VMEO) Cut to Neutral at Piper Sandler; PT $7.85
• Initiations
• 10X Genomics (TXG) Rated New Neutral at Piper Sandler; PT $15
• Atlassian (TEAM) Rated New Buy at Guggenheim; PT $225
• Borr Drilling (BORR) Rated New Neutral at Citi; PT $3.25
• Celsius Holdings (CELH) Rated New Buy at Goldman; PT $72
• Eaton Corp (ETN) Rated New Outperform at Daiwa; PT $390
• Exagen (XGN) Rated New Buy at B Riley; PT $15
• Fannie Mae (FNMA) Rated New Buy at Deutsche Bank; PT $20
• Freddie Mac (FMCC) Rated New Buy at Deutsche Bank; PT $25
• Gitlab (GTLB) Rated New Buy at Guggenheim; PT $70
• Milestone Pharmaceuticals (MIST) Rated New Overweight at Wells Fargo
• Okeanis Eco Tankers (ECO) Rated New Buy at SpareBank; PT $33.78
• Palladyne AI (PDYN) Rated New Hold at Jefferies; PT $8
• Primo Brands (PRMB) Rated New Neutral at Goldman; PT $25
• Sezzle (SEZL) Rated New Hold at TD Cowen; PT $82
• Solventum (SOLV) Rated New Hold at Jefferies; PT $80
• Soundhound (SOUN) Rated New Market Perform at Oppenheimer
• Synaptics (SYNA) Rated New Buy at Deutsche Bank; PT $85
• Tate & Lyle (TATE LN) ADRs Rated New Outperform at BNPP Exane; PT $40.90

Data sources: Bloomberg, Reuters, CQG

David Wienke