Daily Game Plan

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

TODAY’S ECONOMIC DATA: 9:00ET FHFA House Price Index,
Fed’s Collins speaks; 9:45ET MNI Chicago PMI; 10:00ET JOLTS Job Openings, Conf. Board Consumer Confidence; 10:30ET Dallas Fed Services Activity; 1:30ET Fed’s Goolsbee speaks; 3:30ET
Fed’s Goolsbee speaks again

Highlights and News:  

• Vance says US ‘headed to a shutdown’ after meeting with Democrats
• If the US government shuts down, would be the 15th shutdown since 1981; under Reagan there were 8
• Hamas requested a set of clarifications regarding the guarantee of not resuming the war; requested the timetables for the withdrawal of the Israeli army from the Gaza Strip
  
• US gold reserves just exceeded $1 TRILLION for the first time in history
  
• Harvard may be barred from government contracts and student aid
• South African ambassador in Paris found dead after falling from 22^nd floor of Hyatt Hotel
• 120 Iranians detained in the US for illegally entering the country will be returned to Iran in coming days
• Dolphins WR Tyreek Hill suffered dislocated knee and tore multiple ligaments in his knee last night

Global stocks were mixed overnight as tariffs are back in focus, and a US government shutdown looks likely amid lack of progress before Wednesday’s funding deadline.
Trump ordered 10% tariffs on imports of softwood timber and lumber, as 25% well as levies on kitchen cabinets, vanities and upholstered wood products. Canada stands to be hit the hardest by the order, as it is by far the US’s largest wood supplier. The US
and Israel, meanwhile, agreed to a 20-point plan to end the war in Gaza, but the prospects for peace remain unclear. Hamas is studying Trump’s plan to end the war but has expressed strong reservations about it, with some leaders calling it a “declaration of
defeat.”    

EQUITIES: 

US equity futures are modestly lower as a government shutdown looms with Democrats and Republicans seemingly no closer to agreeing on a plan to fund federal operations.
Democrats are seeking an extension of health-care subsidies and a reversal of Medicaid funding cuts, and Republicans insisting on a clean continuing resolution. Government shutdowns have historically had minimal and short-lived impacts on stocks. During the
2018–2019 35-day shutdown the S&P 500 rose approximately 10.3% from December 22, 2018, to January 25, 2019.  Equity positioning doesn’t appear stretched, but a short-term headwind may come in the form of quarter-end rebalancing, with Goldman Sachs traders
expecting US pension funds to sell $19 billion of equities. EchoStar shares rose premarket after sources said Verizon is in talks to buy some of its wireless spectrum. Jefferies posted its best fiscal third-quarter revenue ever, buoyed by dealmaking and trading
activity.

Futures ahead of the bell: E-Mini S&P %, Nasdaq %, Russell 2000 %, DJI %

In pre-market trading, Celsius Holdings (CELH) rises 3% after Morgan Stanley upgraded the energy-drink maker to overweight from equal-weight, citing topline growth
ahead. EchoStar (SATS) rises 8% as Verizon Communications is said to be in discussions with the company about purchasing some of its wireless spectrum. Energy Fuels Inc. (UUUU) falls 7% after a $550 million offering of six-year convertible bonds. Firefly Aerospace
(FLY) is down 10% after the company disclosed an incident during a test at its facility in Texas that resulted in the loss of a rocket stage. Oklo (OKLO) falls 3% while NuScale Power (SMR) drops 4% after Bank of America downgraded the nuclear companies, seeing
valuations as unrealistic at this stage of small modular reactor development. QuantumScape (QS) climbs 4% after saying it will jointly develop with Corning ceramic-separator manufacturing capabilities for QS solid-state batteries. Semtech (SMTC) rises 3.7%
after Oppenheimer raised the stock to outperform. Vail Resorts (MTN) slips 2% after providing a profit outlook that missed expectations.

European gauges mostly reverse early losses as investors keep an eye on trade tariffs and continued political deadlock in the US. Inflation in France and Italy accelerated
this month but remained below the ECB’s 2% target. Price inflation in British shops rose 1.4% in September y-o-y to its highest level in 19 months due to new taxes that have increased retailers’ costs. European Luxury stocks fall after China’s factory activity
extended its decline into a sixth month. Wood and forestry companies are underperforming the broader market after Trump ordered tariffs on imports of softwood timber and lumber. BHP Group fell in London after China’s state-run iron ore buyer temporarily halted
purchases from the Australian miner. Puma gains as much as 6.5% after BNP Paribas Exane upgrades to neutral from underperform and boosts its price target by 40%. Valneva shares rise as much as 11.5% after the company reported positive antibody persistence
data four years after a single shot of its chikungunya vaccine. Asos slumps as much as 13% after the fashion retailer warned adjusted Ebitda will be at the lower-end of its guided range. Close Brothers falls as much as 11% as the financial services group downgrades
near-term adjusted earnings. Stoxx 600 +0.05%, DAX +0.15%, CAC -0.3%, FTSE 100 +0.15%. Financial Services +0.8%, Construction +0.5%, Banks +0.5%, Media +0.5%. Energy -1%, Luxury -1%, Chemicals -0.5%.

Shares in Asia were mostly higher with the MSCI Asia Pacific Index rising 0.5% to cap its longest monthly winning streak since early 2018. The Hang Seng Index was near
the top of the leaderboard, up 7% for September, posting its best month since February. The key onshore index also climbed for a fifth straight month. Chinese chip stocks got a lift after DeepSeek updated an experimental AI model. China’s official purchasing
managers’ index rose to a six-month high of 49.8 in September but remains in contraction for a sixth straight month. Producers are seemingly waiting for further stimulus to boost domestic demand, as well as clarity on a US trade deal. The Hong Kong market
will be closed Wednesday while mainland bourses will be shut through Oct. 8 for Golden Week holidays. Hang Seng Tech +2.25%, Taiwan +0.9%, Hang Seng Index +0.9%, Singapore +0.7%, CSI 300 +0.45%, Topix +0.2%. Sensex -0.1%, ASX 200 -0.15%, Kospi -0.2%, Vietnam
-0.3%, Philippines -0.7%, Indonesia -0.8%, Thailand -1.1%.

FIXED INCOME: 
 

Treasury yields are mildly lower with the curve slightly steeper. 10-year yield trades ~1bps lower at 4.13%. Upcoming US government shutdown remains a focus for investors,
hours before a midnight deadline along with potential for month-end extension/reallocations. The Fed’s Susan Collins and Austan Goolsbee are due to deliver speeches later today, along with some key labor market data. Markets expect an 89% chance of a 25-basis-point
reduction at the Fed’s October meeting, according to CME Group’s FedWatch tool. The release of Friday’s payrolls report remains in doubt amid a budget impasse in Congress.

METALS: 

Gold slipped along with other precious metals as traders wrap up a month that saw successive all-time highs fueled by fears of a US government shutdown. Spot gold
slipped briefly below $3,800 an ounce after hitting a fresh record high earlier in the day. Gold remains set for its best month in five years. UBS expects gold could rise as high as $4,200/oz by mid-2026 in its bull case scenario, the bank said in a note today.
Spot gold -0.5%, Silver -1.7%, Copper futures -0.5%.

ENERGY:   

Oil slid for a second session as the market weighed a looming oversupply and a possible ending of hostilities in Gaza.  Brent fell below $67 a barrel after tumbling
over 3% on Monday, the biggest decline in almost two months.  The OPEC+ alliance is likely to agree on Sunday to raising output in November at a modest rate similar to that for October. Analysts expect the market to move into a large surplus in the fourth
quarter and remain in surplus through 2026. Russia’s seaborne crude exports stuck at a 16-month high in the past four weeks, with President Trump so far failing to convince remaining buyers to ditch Moscow’s oil. WTI -0.9%, Brent -0.85%, US Nat Gas +0.9%,
RBOB -1.7%.  

CURRENCIES: 

In currency markets, the dollar headed for a third daily drop as traders awaited US job openings data and developments to avert a government shutdown. The greenback
drifted lower both during the impasse and in the immediate aftermath of the previous three shutdowns. The yen is among leaders against the dollar for a second day after a weak JGB auction pushed Japanese two-year yields to the highest since 2008. Key Japan
data missed the mark in August, with industrial production dropping more than estimated while retail sales unexpectedly fell. Australia’s dollar outperforms most peers after the Reserve Bank flagged sticky inflation pressure, damping interest-rate cut wagers.
The SNB made its most significant sales of the franc in more than three years in the second quarter to stem a surge caused by Trump’s tariff push. US$ Index -0.1%, GBPUSD +0.05%, EURUSD +0.1%, USDJPY 00.4%, AUDUSD +0.45%, NZDUSD +0.25%, USDCHF -0.05%, USDCAD
+0.05%, USDSEK -0.1%, USDNOK -0.05%.

Bitcoin -1%, Ethereum -1.3%.

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
• Celsius Holdings (CELH) Raised to Overweight at Morgan Stanley; PT $70
• Fidelity National (FIS) Raised to Buy at UBS; PT $82
• Freeport (FCX) Raised to Buy at BofA; PT $42
• IO Biotech (IOBT) Raised to Neutral at Van Lanschot Kempen
• Semtech (SMTC) Raised to Outperform at Oppenheimer; PT $81
• Downgrades
• Electronic Arts (EA) Cut to Sell at DZ Bank; PT $182
• Cut to Hold at Jefferies; PT $210
• Hess Midstream (HESM) Cut to Neutral at Goldman; PT $36
• Imperial Oil (IMO CN) Cut to Sell at TD Cowen; PT C$104
• Instacart (CART) Cut to Neutral at BTIG
• IO Biotech (IOBT) Cut to Hold at TD Cowen
• Merus NV (MRUS) Cut to Market Perform at BMO; PT $97
• Cut to Equal-Weight at Barclays; PT $97
• Cut to Market Perform at LifeSci Capital; PT $97
• Cut to Neutral at Guggenheim; PT $97
• Metsera (MTSR) Cut to Equal-Weight at Wells Fargo; PT $54
• MoonLake Immunotherapeutics (MLTX) Cut to Neutral at Citi; PT $5
• NuScale Power (SMR) Cut to Underperform at BofA
• NuVista Energy (NVA CN) Cut to Hold at TD Cowen; PT C$17
• Oklo (OKLO) Cut to Neutral at BofA
• Spotify (SPOT) Cut to Neutral at Goldman; PT $770
• Tourmaline Oil (TOU CN) Cut to Hold at TD Cowen; PT C$68
• Unity Software (U) Cut to Hold at HSBC; PT $40.80
• Initiations
• Academy Sports & Outdoors (ASO) Rated New Equal-Weight at Barclays
• Adaptive Biotechnologies (ADPT) Rated New Buy at Guggenheim; PT $20
• Airbnb (ABNB) Reinstated Outperform at Mizuho Securities; PT $151
• Alphabet (GOOGL) Rated New Outperform at Mizuho Securities; PT $295
• Amazon (AMZN) Reinstated Outperform at Mizuho Securities; PT $300
• Array (ARRY) Rated New Buy at Deutsche Bank; PT $11
• Rated New Outperform at Baird; PT $11
• Axogen (AXGN) Rated New Buy at HC Wainwright; PT $25
• Booking (BKNG) Reinstated Neutral at Mizuho Securities; PT $5,975.05
• Chime Financial (CHYM) Rated New Buy at Arete; PT $34
• Circle Internet (CRCL) Rated New Market Perform at Citizens
• CoreWeave (CRWV) Rated New Outperform at Evercore ISI; PT $175
• Definity Financial (DFY CN) Rated New Equal-Weight at Barclays; PT C$78
• DoorDash (DASH) Rated New Outperform at Mizuho Securities; PT $350
• EBay (EBAY) Reinstated Neutral at Mizuho Securities; PT $98
• Expedia (EXPE) Reinstated Neutral at Mizuho Securities; PT $240
• FirstCash (FCFS) Rated New Buy at Canaccord; PT $200
• Golar LNG (GLNG) Reinstated Buy at Goldman; PT $54
• Instacart (CART) Rated New Neutral at Mizuho Securities; PT $45
• Intact Financial (IFC CN) Rated New Overweight at Barclays; PT C$312
• James Hardie (JHX AU) Rated New Outperform at Wolfe; PT $25
• Lam Research (LRCX) Rated New Hold at HSBC; PT $127
• Lyft (LYFT) Rated New Neutral at Mizuho Securities; PT $24
• Meta (META) Rated New Outperform at Mizuho Securities
• NEXTracker (NXT) Rated New Buy at Deutsche Bank; PT $88
• Ocugen (OCGN) Rated New Buy at Lucid Capital Markets; PT $15
• Oneok (OKE) Reinstated Neutral at Goldman; PT $75
• Pinterest (PINS) Rated New Outperform at Mizuho Securities; PT $50
• Publicis (PUB FP) ADRs Rated New Outperform at BNPP Exane; PT $38.30
• Simulations Plus (SLP) Rated New Hold at TD Cowen; PT $16
• Skye Bioscience (SKYE) Rated New Buy at HC Wainwright; PT $20
• Snap (SNAP) Rated New Neutral at Mizuho Securities; PT $9
• Take-Two (TTWO) Rated New Outperform at CICC; PT $272
• TransDigm (TDG) Rated New Outperform at BMO; PT $1,420
• TripAdvisor (TRIP) Rated New Underperform at Mizuho Securities
• Trivago (TRVG) ADRs Reinstated Neutral at Mizuho Securities; PT $3.50
• Uber (UBER) Reinstated Outperform at Mizuho Securities; PT $130
• Zillow (ZG) Reinstated Outperform at Mizuho Securities; PT $100

Data sources: Bloomberg, Reuters, CQG

David Wienke