Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET ECB Rate Decision; 8:30ET Jobless Claims, CPI, Philly Fed; 11:00ET KC Fed Mfg. Activity;
1:00ET 5-year TIPS auction; 2:00ET Mexico Rate Decision; 4:00ET TIC Flows

Highlights and News:  

• US NOV. CORE CPI RISES 2.6% Y/Y; EST. +3.0%
• ECB left rates unchanged and raises economic growth forecasts for the next two years
• BOE CUTS KEY RATE BY 25BPS TO LOWEST SINCE FEBRUARY 2023
• ZELENSKIY SAYS UKRAINIAN TEAM WILL BE IN US FRIDAY-SATURDAY
• Zelenskiy: We Are Not Considering Parliamentary, Local Elections
  
• Putin says Russia will take more land in Ukraine if Europe sinks peace moves
• Defense Policy Bill to Speed Weapons Buying Sent to Trump
• JPMorgan quants are warning about “extreme crowding” in stocks that have rallied hard this year
• Seven men captured in major counterterrorism operation in southwest Sydney

Global stocks edged up as the technology sector rebounded from renewed investor concerns over AI spending, while market participants braced for a series of central
bank meetings likely to underscore diverging monetary policies worldwide. The Bank of England cut its key interest rate 25bps to 3.75%, as expected and said rates are likely to continue a gradual downward path. Sweden’s Riksbank kept rates at 1.75%, while
Norges Bank held at 4%, both as expected. The Czech central bank will probably stay at 3.5%. The ECB kept its policy rates steady today and signaled little appetite for cuts in the near term. Traders expect Japan to raise rates on Friday but are less certain
about the pace of tightening next year. Trump said late on Wednesday that the next Fed chairman would be someone who believed in lower interest rates “by a lot.” The Fed has signaled only one rate cut next year. Putin said on Wednesday Russia would take more
land in Ukraine by force if Kyiv and European politicians whom he called “young pigs” did not engage over US proposals for a peace settlement.

EQUITIES: 

US equity futures are being led higher by Nasdaq with Micron’s upbeat forecast giving some reassurance to the AI narrative, helping spark a rebound in technology shares. Micron Technology
shares advanced more than 11% in premarket trading after giving a revenue prediction that beat estimates, with surging demand and supply shortages allowing it to charge more for products. A potential year-end Santa Claus rally will likely depend on whether
upcoming inflation data validates Federal Reserve Chair Jerome Powell’s view that core goods prices are approaching their peak. Affordability will stay in focus with the first CPI report in almost two months, including partial October data and full November
readings. Trump said he plans to announce the new Fed chair soon, and that it will be “someone who believes in lower interest rates.” He also used his address to the nation to talk about housing reforms, which he said are coming in the new year. JPMorgan has
highlighted six stocks as high-risk speculative growth investments that are heavily overcrowded in investor portfolios, cautioning that they could face sharp reversals if a significant macroeconomic shock occurs. The stocks on the list are Broadcom, Advanced
Micro Devices, Expedia Group, Estée Lauder Companies, Invesco, and Nucor Corp. The Senate voted to clear a defense authorization bill backing the Pentagon’s push to buy commercial technology to speedily equip US troops and sets curbs on war powers and investments
in sensitive Chinese industries.

Futures ahead of the data/bell: E-Mini S&P =0.4%, Nasdaq +0.8%, Russell 2000 +0.3%, DJI +0.2%.

In pre-market trading, Insmed (INSM) falls 17% after the drugmaker said a mid-stage trial of its experimental therapy for inflammation of the nasal passages and sinuses
failed to meet primary or secondary efficacy goals. Instacart (CART) is down 6% after Reuters reported that the Federal Trade Commission has sent the grocery delivery company a civil investigative demand. Lululemon (LULU) rises 7% on reports that activist
investor Elliott Investment Management has built a stake of more than $1 billion in the athletic apparel retailer. Micron (MU) jumps 14% after providing an upbeat forecast for the current quarter. Rivian Automotive (RIVN) gains 3.6% following an upgrade to
outperform at Baird. Sable Offshore Corp. (SOC) jumps 46% after the company said the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration determined the pipeline connecting the Santa Ynez Unit to Pentland Station terminal
in California constitutes an interstate pipeline. Trump Media & Technology Group (DJT) jumps 18% after the company behind Truth Social announced that it agreed to merge with clean fusion energy company TAE Technologies in an all-stock transaction valued at
more than $6 billion.

European gauges hold early small gains as investors look ahead to an interest rate decision from the European Central Bank. Retailers outperform, led by H&M, while
automakers lag. H&M gains as much as 2.8% after being upgraded by Oddo BHF, with analysts raising estimates and attaching a higher multiple on the fashion retailer. Currys shares climb as much as 15% after the electronics retailer reported earnings ahead of
analysts’ expectations. Whitbread shares rise over 5% after stakeholder Corvex Management called for a strategic review of the company’s direction and capital allocation. Rentokil Initial shares rise as much as 3.9% as BofA Global Research raises its recommendation
to buy and names it one of the bank’s “25 stocks for 2026” on its US growth. European indexes will be rebalanced at the close on Friday following their quarterly review, prompting $16.4 billion of two-sided flows, according to estimates by JPMorgan strategists.
The ECB left rates unchanged and raises economic growth forecasts for the next two years.  Stoxx 600 +0.3%, DAX +0.25%, CAC +0.15%, FTSE 100 -0.05%. Retail +1.3%, Financial Services +0.8%, Telecom +0.6%. Autos -0.8%, Personal Goods -0.3%.

Shares in Asia declined, with South Korea and Japan leading the retreat.  The MSCI Asia Pacific Index fell 0.4%, tracking a US tech selloff and declining for a third
time in four days. Investors are weighing whether companies leading the AI boom can sustain their lofty valuations and high spending. Micron Technology’s upbeat forecast for the current quarter — a sign of surging demand and supply shortages for computer memory
chips — did little to ease broader concerns about the sector’s outlook. Japanese tech stocks fell, with semiconductor equipment supplier Advantest, dropping as much as 5%. Counterparts Lasertec, Renesas Electronics and Tokyo Electron declined between 3% and
4%. The Bank of Japan kicked off its two-day meeting, with the central bank expected to raise rates to 0.75% Friday, its highest level in 30 years. Kospi -1.5%, Nikkei 225 -1%, Philippines -0.8%, Hang Seng Tech -0.7%, Indonesia -0.7%, CSI300 -0.6%, Thailand
-0.5%, Taiwan -0.2%. ASX 200 +0.05%, Hang Seng Index +0.1%, Shanghai Composite +0.2%, Vietnam +0.2%. 

FIXED INCOME: 
 

Treasuries grind higher over early London session, outperforming gilts after Bank of England cut rates to 3.75% as expected but with a 5-4 vote and noting that judgments
on further easing will become a closer call.  The yield on the US 10-year is down two basis points at 4.13% as traders waited for today’s US inflation data for clues on the future trajectory of interest rates. US yields are richer by 1.5bp to 3bp across the
curve in a bull steepening move amid belly-led gains. 2s10s -0.5bp and 5s30s spread steeper by 1.5bp on the day. US session focus includes weekly jobless claims, CPI along with a 5-year TIPS reopening auction. 

METALS: 

Gold edges lower as investors tracked mounting tensions in Venezuela and awaited closely watched US inflation data. Platinum extended a breakneck rally, surging close
to $2,000 an ounce before paring gains. The metal has more than doubled this year and is set for the biggest annual gain going back to 1987. The surge has come as the London market shows signs of tightening, as banks park metal in the US to insure against
the risk of tariffs. Exports to China have also been robust this year, and optimism for the nation’s demand has been bolstered as futures recently began trading on the Guangzhou Futures Exchange. Spot gold -0.5%, Silver -0.5%, Copper futures -0.6%.

ENERGY:   

Crude oil futures trim opening gains as President Trumps prime-time address from the White House largely sidesteps geopolitics. An oil tanker caught fire after an
overnight drone attack on Russia’s southern city of Rostov, as Ukraine expands the scope of strikes on energy assets. The US is preparing a fresh round of sanctions on Russia’s energy sector, and a blockade in Venezuela could hurt Chinese refiners. So far
measures against Moscow haven’t significantly moved the needle in the oil market.  Activity has thinned in the run-up to next week’s Christmas break. In Venezuela, oil-storage facilities and tankers at its terminals are quickly filling up, according to sources.
If they reach maximum capacity, state-owned Petróleos de Venezuela SA could be forced to shut-in wells. WTI +0.3%, Brent +0.2%, US Nat Gas +4.0%, RBOB +0.2%. 

CURRENCIES: 

In currency markets, the dollar is mixed against FX majors with sterling slightly higher after the BOE cut rates as expected. The euro is under pressure ahead of
the ECB rate decision. Norway’s central bank kept borrowing costs unchanged for a second meeting and said it’s in no rush to move lower while Sweden’s central bank kept borrowing costs at a three-year low and repeated a plan for no change until 2027. The Bank
of Japan is widely expected to raise its benchmark rate to the highest level in three decades tomorrow, with Governor Kazuo Ueda’s board likely to lift the overnight call rate to 0.75%. Kiwi dollar slips despite a small GDP beat. US$ Index +0.15%, GBPUSD -0.1%,
EURUSD -0.2%, USDJPY +0.05%, AUDUSD -0.02%, NZDUSD -0.15%, USDCHF -0.05%, USDCAD +0.05%, USDSEK +0.1%, USDNOK +0.05%.

Bitcoin -1.9%, Ethereum +2.3%.   

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
• Camden Property (CPT) Raised to Neutral at JPMorgan; PT $116
• Core Scientific (CORZ) Raised to Market Outperform at Citizens; PT $30
• Cytokinetics (CYTK) Raised to Buy at Goldman; PT $95
• Edwards Life (EW) Raised to Overweight at JPMorgan; PT $100
• Enphase Energy (ENPH) Raised to Neutral at Goldman; PT $29
• Federal Realty (FRT) Raised to Overweight at JPMorgan; PT $114
• GE Vernova (GEV) Raised to Buy at Jefferies; PT $815
• Glacier Bancorp (GBCI) Raised to Overweight at Piper Sandler; PT $58
• Helmerich & Payne (HP) Raised to Overweight at Piper Sandler; PT $35
• ManpowerGroup (MAN) Raised to Outperform at BMO; PT $44
• Merck & Co (MRK) Raised to Outperform at BMO; PT $130
• Micron (MU) Raised to Buy at BofA; PT $300
• Nabors (NBR) Raised to Overweight at Piper Sandler; PT $65
• PennyMac Mortgage (PMT) Raised to Outperform at KBW; PT $13.50
• Penumbra (PEN) Raised to Overweight at JPMorgan; PT $370
• Premium Brands (PBH CN) Raised to Sector Outperform at Scotiabank
• Ranger Energy (RNGR) Raised to Overweight at Piper Sandler; PT $17
• Rivian (RIVN) Raised to Outperform at Baird; PT $25
• Shake Shack (SHAK) Raised to Neutral at JPMorgan; PT $90
• Sherwin-Williams (SHW) Raised to Buy at Citi; PT $390
• Sphere Entertainment (SPHR) Raised to Overweight at Morgan Stanley
• TD Bank (TD CN) Raised to Outperform at National Bank; PT C$134
• Verrica Pharma (VRCA) Raised to Buy at Brookline Capital; PT $17
• Warner Music (WMG) Raised to Overweight at Morgan Stanley
• Downgrades
• ABM Industries (ABM) Cut to Neutral at UBS; PT $51
• Allstate (ALL) Cut to Market Perform at William Blair
• Americold Realty Trust (COLD) Cut to Neutral at Baird; PT $13
• Argenx (ARGX BB) ADRs Cut to Neutral at Baird; PT $858
• Avidity Biosciences (RNA) Cut to Inline at Evercore ISI; PT $72
• Cementos Pacasmayo (CPACASI1 PE) ADRs Cut to Hold at Kallpa Securities
• Cibest (CIBEST CB) ADRs Cut to Underperform at Grupo Santander; PT $61
• Cinemark (CNK) Cut to Equal-Weight at Morgan Stanley; PT $28
• Energy Transfer (ET) Cut to Equal-Weight at Morgan Stanley; PT $19
• Enterprise Products (EPD) Cut to Underweight at Morgan Stanley; PT $34
• Evergy (EVRG) Cut to Neutral at Mizuho Securities; PT $76
• Expro Group Holdings NV (XPRO) Cut to Underweight at Piper Sandler
• Kemper (KMPR) Cut to Underperform at William Blair
• Kennedy-Wilson (KW) Cut to Underweight at JPMorgan; PT $11
• Lennar (LEN) Cut to Underperform at Evercore ISI; PT $92
• Cut to Underperform at RBC; PT $95
• Lineage (LINE) Cut to Neutral at Baird; PT $39
• PayPal (PYPL) Cut to Underweight at Morgan Stanley; PT $51
• Progressive (PGR) Cut to Market Perform at William Blair
• Public Storage (PSA) Cut to Neutral at JPMorgan; PT $301
• Realty Income (O) Cut to Underweight at JPMorgan; PT $61
• Regency Centers (REG) Cut to Neutral at JPMorgan; PT $76
• Sealed Air (SEE) Cut to Neutral at Baird
• Simulations Plus (SLP) Cut to Neutral at BTIG
• Smartstop Self Storage REIT (SMA) Cut to Underweight at JPMorgan
• UDR (UDR) Cut to Underweight at JPMorgan; PT $40
• Vistagen Therapeutics Inc (VTGN) Cut to Hold at Jefferies; PT 90 cents
• Welltower (WELL) Cut to Neutral at JPMorgan; PT $205
• Initiations
• American Air (AAL) Rated New Equal-Weight at Wells Fargo; PT $17
• Angel Studios (ANGX) Rated New Outperform at Oppenheimer; PT $8
• Avalo Therapeutics (AVTX) Rated New Outperform at Mizuho Securities
• Bicara Therapeutics (BCAX) Rated New Neutral at Mizuho Securities
• Blackline Safety (BLN CN) Rated New Outperform at RBC; PT C$9
• Brown & Brown (BRO) Reinstated Neutral at JPMorgan; PT $91
• CervoMed Inc (CRVO) Rated New Overweight at Cantor
• Delta Air Lines (DAL) Rated New Overweight at Wells Fargo; PT $87
• Dream Industrial REIT (DIR-U CN) Resumed Buy at TD Cowen; PT C$14.50
• Dream Unlimited (DRM CN) Resumed Buy at TD Cowen; PT C$28
• Electrovaya (ELVA CN) Rated New Outperform at Oppenheimer; PT C$19.30
• Etsy (ETSY) Rated New Neutral at President Capital Management; PT $57
• Foghorn Therapeutics (FHTX) Rated New Buy at BTIG; PT $11
• IREN Ltd (IREN) Rated New Neutral at Goldman; PT $39
• Koryx Copper Inc (KRY CN) Rated New Buy at Stifel Canada; PT C$3.75
• Lexeo Therapeutics (LXEO) Rated New Strong Buy at Raymond James; PT $25
• Nasus Pharma (NSRX) Rated New Market Outperform at Citizens; PT $19
• Ocean Power Technologies (OPTT) Reinstated Buy at HC Wainwright
• Oruka Therapeutics Inc (ORKA) Rated New Overweight at Piper Sandler
• RAPT Therapeutics (RAPT) Rated New Buy at TD Cowen
• Sealsq (LAES) Rated New Overweight at Cantor; PT $7
• Serve Robotics (SERV) Rated New Outperform at Oppenheimer; PT $20
• Sonoro Gold Corp (SGO CN) Reinstated Buy at Fundamental Research
• Southwest Air (LUV) Rated New Equal-Weight at Wells Fargo; PT $45
• Spyre Therapeutics Inc (SYRE) Rated New Outperform at Mizuho Securities
• United Airlines (UAL) Rated New Overweight at Wells Fargo; PT $145
• Upstream Bio (UPB) Rated New Outperform at Mizuho Securities; PT $51
• Valvoline (VVV) Rated New Buy at Roth Capital Partners; PT $42

Data sources: Bloomberg, Reuters, CQG

David Wienke