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 Price Index, *Core PCE*; 9:00ET Fed’s
Barkin speaks; 10:00ET U. of Mich. Sentiment; 11:00ET Kansas City Fed Services Activity; 1:00ET Fed’s Bowman speaks

Highlights and News:  

• US AUG. CORE PCE PRICE INDEX RISES 2.9% Y/Y; EST. +2.9%
• US AUG. PCE PRICE INDEX RISES 0.3% M/M; EST. +0.3%
• Foreigners Are Buying US Stocks at Record Pace
• Trump plans new tariff push with 100% rate on patented drugs; European Pharma Shrugs it Off
• KREMLIN CALLS NATO STATEMENTS ON RUSSIAN JETS IRRESPONSIBLE:IFX
• BOEING TO GET FAA OK TO DO FINAL SAFETY CHECKS ON 737 MAX: WSJ
• David Einhorn Sounds Warning on AI Spending Splurge

Global stocks were mixed as investors braced for tariffs on pharmaceutical products that Trump has long touted and analysts said the impact on nearly all pharma companies
should be limited. Trump on Thursday unveiled punishing tariffs on a broad range of imported goods, including 100% duties on branded drugs and 25% tariffs on heavy-duty trucks, set to take effect from October 1 unless their manufacturers have begun building
US plants.  It remains unclear whether the new levies would be added to national tariffs or if economies with trade agreements, like the European Union, would be exempt. Meanwhile, Foreigners bought US stocks at a record pace in the second quarter, according
to Federal Reserve Board data. Stocks now make up nearly 32% of foreigners allocations to US assets — breaking a record that’s been in place since 1968. Tokyo’s core CPI unexpectedly held steady at 2.5% in September, supporting the BOJ’s cautious approach
to raising rates.

EQUITIES: 

US equity futures struggled for direction as investors awaited key inflation data that could sway bets on interest rate cuts, while also weighing the impact of fresh tariffs on a broad
range of imported goods. Markets have been on edge all week with the PCE data looming, with traders adjusting expectations for additional rate cuts in response to economic data and conflicting statements from Federal Reserve policymakers. Meanwhile, the Trump
administration is weighing a new plan to reduce US reliance on semiconductors made overseas, hoping to spur domestic manufacturing and reshape global supply chains. The policy’s goal is to have chip companies manufacture the same number of semiconductors in
the US as their customers import from overseas producers or pay a tariff. Adding to investor anxiety is President Trump’s announcement of 100% duties on branded pharmaceutical products, 25% levies on heavy-duty trucks, 50% tariff on imported kitchen cabinets
and bathroom vanities and a 30% tariff on upholstered furniture, among others. Shares of Wayfair and Bed Bath & Beyond are lower in pre-market trading. Truck maker PACCAR climbed more than 5% in premarket trading.

Futures ahead of the data/bell: E-Mini S&P +0.1%, Nasdaq +0.05%, Russell 2000 -0.1%, DJI +0.2%

In pre-market trading, Boeing (BA +3.5%) is poised to get more leeway from the Federal Aviation Administration to perform some final safety checks on its 737 MAX aircraft
prior to delivery, the Wall Street Journal reported, easing the plane maker’s burden to get more of its most profitable aircraft to customers. Apellis Pharmaceuticals (APLS) falls 6.2% as Goldman Sachs cuts its rating on the clinical-stage biopharmaceutical
company to sell. Concentrix (CNXC) slumps 21% after the call-center operator gave a fourth-quarter profit outlook below consensus estimates. Harrow (HROW) rises 1.6% after entering into an agreement to acquire Melt Pharmaceuticals.  Intel (INTC) climbs 4%
and GlobalFoundries (GFS) gains 9% after the Wall Street Journal reported that the Trump administration is weighing a new plan to reduce US reliance on chips made overseas. Paccar (PCAR) gains 6% as Trump sets a 25% tariff rate on heavy trucks made outside
of the US. Wayfair (W) declines 2% after President Trump announced new industry-specific tariffs.

INTC: getting overbought again…

European gauges are higher in choppy trading as investors were unmoved by President Trump’s plans to slap tariffs on patented drugs unless they invest in the US. Many
European firms already have factories under construction. Health care stocks did fall at the open but were quick to erase losses. Technology names underperform, as they did in Asia, after the Wall Street Journal reported the White House is weighing a plan
to reduce semiconductor imports. Among individual stocks, Noba Bank jumps as much as 30% from its offer price as the Swedish financial services firm’s shares began trading in Stockholm. ArcelorMittal gained as much as 5% after a report in Handelsblatt that
the EU Commission plans to impose tariffs in the next few weeks. STMicroelectronics NV fell ~2% after a Wall Street Journal report. Ceres falls as much as 16% after the clean energy technology developer reported an operating loss of £18.7 million for the first
half. Stoxx 600 +0.5%, DAX +0.6%, CAC +0.7%, FTSE 100 +0.5%. Insurance +1.6%, Travel & Leisure +1.1%, Construction +1%. Technology -0.5%, Basic Resources -0.3%.

Shares in Asia were lower, with the MSCI Asia Pacific Index down 1%, as chipmakers and Chinese tech shares pulled back after recent gains. Asian health stocks tumbled
after Trump announced 100% tariffs on branded or patented pharmaceutical products. Chipmakers were also pressured by a WSJ report that the White House is weighing a plan to reduce semiconductor imports. Korea’s Kospi fell more than 2% as foreigners sold chip
shares. The Hang Seng Tech Index saw its worst decline since May. India’s Nifty 50 declined for a sixth-straight session. Next week’s key events include monetary policy decisions in Australia and India, while China will have several Golden Week holidays. Hang
Seng Tech -2.9%, Kospi -2.5%, Taiwan -1.7%, Hang Seng Index -1.3%, CSI 300 -0.95%, Sensex -0.9%, Nikkei 225 -0.9%, Vietnam -0.3%, Singapore -0.2%. Topix +0.05%, ASX 200 +0.1%, Indonesia +0.7%.

FIXED INCOME: 
 

Treasury yields are a touch lower, with the curve largely flat ahead of the inflation figures. 10-year yield is 1bp lower at 4.16%. Economists are predicting core
PCE rose 2.9% y/y in August, the same pace as the previous month.
Federal Reserve Bank of Richmond President Tom Barkin said while unemployment and inflation have both moved away from the US central bank’s goals, he sees only limited risk of
further deterioration on both fronts.

METALS: 

Gold is steady, on track for a sixth weekly gain — supported by elevated geopolitical tensions, inflows into bullion-backed exchange-traded funds, and a risk-off
tone in broader markets. Investors will focus on the core personal consumption expenditures price index this morning — the Fed’s preferred gauge of underlying inflation. Expectations are for a rise of 0.2% in August, from 0.3% in July. On an annual basis,
the core measure is expected to hold at 2.9%. Gold-jewelry sales in India are set to drop by more than a quarter during the upcoming festival season as buyers seek less costly alternatives, according to the India Bullion and Jewelers Association. Spot gold
+0.05%, Silver -0.2%, Copper futures -0.4%.

ENERGY:   

Oil prices edged lower but are on track for a roughly 4% weekly gain, as Ukraine’s attacks on Russia’s energy infrastructure prompted Moscow to curb fuel exports.
OPEC+ has been pumping almost 500,000 barrels per day below its targets. Between April and August, OPEC+ delivered only 75% of production increases, according to Reuters. NATO’s warning of a response to further violations of its airspace has ratcheted up tensions
from the war in Ukraine and raised prospects of additional sanctions on Russia’s oil industry. Goldman Sachs says a full European Union ban on Russian oil imports is “unlikely” as a few member states — Hungary and Slovakia in particular — rely heavily on the
flow and face “low incentives” to support the move. A full ban wasn’t included in 19th EU sanctions package. Even if implemented, it would have a “limited” impact on global balances as it would re-allocate flows rather than curtail global oil supply, the analysts
said. US crude may become too pricey for Asian buyers as surging Chinese demand pushes up tanker rates. WTI -0.2%, Brent -0.2%, US Nat Gas +1.2%, RBOB +0.1%. 

CURRENCIES: 

In currency markets, the dollar is a touch softer yet still headed for its strongest week since early August, with attention turning to today’s inflation report.
Ranges were tight as traders face a thin data calendar during the European session and mostly stay sidelined ahead of US data. Indonesia’s central bank said it is intervening “boldly” in financial markets to stabilize the rupiah as it falls toward a record
low.  US$ Index -0.15%, GBPUSD +0.05%, EURUSD +0.1%, USDJPY -0.05%, AUDUSD -0.15%, NZDUSD -0.1%, USDCHF ~flat, USDCAD +0.05%, USDSEK -0.1%, USDNOK -0.05%.

Bitcoin -.01%, Ethereum +0.3%.

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
• Alkermes (ALKS) Raised to Outperform at RBC; PT $44
• Brookfield Infrastructure (BIP) Raised to Outperform at National Bank
• Ciena (CIEN) Raised to Buy at Rosenblatt Securities Inc; PT $175
• HB Fuller (FUL) Raised to Buy at Seaport Global Securities; PT $80
• Ionis Pharma (IONS) Raised to Neutral at Goldman; PT $65
• Kenvue (KVUE) Raised to Buy at Rothschild & Co Redburn; PT $22
• Macerich (MAC) Raised to Buy at BofA; PT $23
• ONE Gas (OGS) Raised to Outperform at Mizuho Securities; PT $86
• RAPT Therapeutics (RAPT) Raised to Outperform at Leerink; PT $37
• Riot Platforms (RIOT) Raised to Overweight at JPMorgan; PT $19
• Downgrades
• Apellis Pharma (APLS) Cut to Sell at Goldman; PT $18
• CarMax (KMX) Cut to Inline at Evercore ISI; PT $52
• Cut to Market Perform at Oppenheimer
• Civitas Resources (CIVI) Cut to Equal-Weight at Morgan Stanley; PT $40
• CleanSpark (CLSK) Cut to Neutral at JPMorgan; PT $14
• EOG Resources (EOG) Cut to Sector Perform at Scotiabank; PT $130
• First Merchants (FRME) Cut to Market Perform at Raymond James
• Integral Ad Science (IAS) Cut to Hold at Stifel
• IREN Ltd (IREN) Cut to Underweight at JPMorgan; PT $24
• Warner Bros Discovery (WBD) Cut to Sector Weight at KeyBanc
• Initiations
• CRH (CRH) Reinstated Buy at BofA; PT $128
• Eli Lilly (LLY) Rated New Buy at NYKREDIT; PT $900
• First Horizon (FHN) Rated New Neutral at DA Davidson; PT $24
• Genco Shipping (GNK) Rated New Buy at SEB Equities; PT $23
• Impala (IMP SJ) ADRs Rated New Hold at HSBC; PT $10.50
• Kyndryl (KD) Rated New Equal-Weight at Morgan Stanley; PT $30
• Materion (MTRN) Rated New Buy at Freedom Capital; PT $136
• Methanex (MX CN) Rated New Outperform at National Bank; PT C$65.50
• Mirion Technologies (MIR) Rated New Overweight at JPMorgan; PT $28
• Paycom Software (PAYC) Reinstated Buy at Guggenheim; PT $270
• Paylocity (PCTY) Rated New Neutral at Guggenheim
• Rollins (ROL) Rated New Overweight at JPMorgan; PT $70
• Sobi (SOBI SS) ADRs Rated New Underperform at BNPP Exane; PT $14.70
• Spyre Therapeutics Inc (SYRE) Rated New Buy at Deutsche Bank; PT $43
• United Therapeutics (UTHR) Reinstated Outperform at RBC; PT $569
• Valmont (VMI) Rated New Overweight at JPMorgan; PT $480

Data sources: Bloomberg, Reuters, CQG

David Wienke