Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET ADP Weekly Employment Change; 8:30ET CPI, Real Avg Hourly Earnings; 10:00ET New Home
Sales, Fed’s Musalem speaks; 1:00ET US to sell $22 billion 30-year bond reopening; 2:00ET Trump speaks at Detroit Economic Club; 4:00ET Fed’s Barkin speaks

Highlights and News:  

• US DEC. CORE CPI RISES 2.6% Y/Y: EST. +2.7%
• Trump vows 25% tariff on goods from Iran ‘business’ partners
• Takaichi trade roars back in Japan as snap election bets grow
• JPMorgan’s 4Q results beat consensus estimates on most measures
  
• US BANCORP TO BUY BTIG
• Banks warn consumers will be hurt by Trump’s 10% cap on credit card interest rates
• AbbVie signed a deal with the US government to lower drug prices and invest $100 billion domestically
• Dome teams are 1-15 in NFL playoffs over the past 10 years when playing on the road below 40 degrees. The last time the Bears won on Sunday night football was 2018 against the Rams

Global stocks are mixed, as Trump’s pledge on Monday to slap a 25% tariff rate on any country that does business with Iran added to market uncertainty, keeping investors
cautious. However, shares in Japan surged the most in recent months as the PM decides to hold snap elections. Local media outlets indicate that PM Takaichi has conveyed plans to dissolve the Lower House of Parliament at the start of its regular session later
this month, paving the way for a snap election possibly as soon as early February. Overall sentiment remains resilient despite ongoing geopolitical noise (Venezuela/Iran oil impacts, Trump-related policy threats on tariffs/credit cards/Fed), with focus on
upcoming US inflation data, earnings, and any Fed-related developments. Wednesday’s possible Supreme Court ruling on US tariffs will offer new tests for a stock rally that has pushed global gauges to fresh highs. 

EQUITIES: 

US equity futures are under slight pressure ahead of key events like the December CPI inflation report and the start of Q4 earnings season. JPMorgan’s equities and FICC trading beat in
the first of Big Bank earnings. BNY’s profit beat, driven by gains in fee revenue and interest income.  The US core consumer price index is seen rising 2.7% in December from a year earlier. That’s just a touch more than the 2.6% annual advance in November,
which was the smallest since early 2021. With earnings season kicking off, small caps have been in favor recently, with the Russell 2000 outperforming the S&P 500 for the past seven sessions. The last time it had a longer winning streak was 2019. Tech remains
the dominant contributor to 4Q profit growth among S&P 500 members, estimated to show year-over-year EPS growth of 20%, while non-tech earnings expansion is slated to decelerate from 9% to just 1%, according to BofA, Meanwhile, Trump’s move to tariff countries
doing business with Iran has the potential to disrupt US trading relationships across the globe. Iran’s partners include India, Turkey, and China. The Supreme Court has another opportunity on Wednesday to rule on Trump’s emergency power tariffs, but it appears
the justices don’t usually make rulings this important so early in the year.

Futures ahead of the data/bell: E-Mini S&P -0.1%, Nasdaq -0.2%, Russell 2000 -0.15%, DJI -0.25%.

In pre-market trading, Delta Air Lines (DAL) falls 5% after the carrier gave an underwhelming profit forecast for the full year. L3Harris Technologies Inc. (LHX) gains
13% as the US Department of Defense is set to invest in the company’s Missile Solutions business via a $1 billion convertible preferred security. Ormat Technologies (ORA) rises 5% after the renewable energy company signed a 20-year power purchase agreement
with data center operator Switch. Synopsys (SNPS) falls 2% as Piper Sandler downgrades the chip design software firm to neutral from overweight. Travere Therapeutics (TVTX) slumps 28% after the biotech firm said it received a request from the FDA to clarify
the clinical benefit of its therapy that treats a rare kidney disease. JPMorgan Chase (JPM +0.3%) reported that the bank’s profit fell in the fourth quarter of 2025, while revenues rose on the back of higher interest income and fees. Bank of New York Mellon
Corp.’s profit beat analysts’ estimates, driven by gains in fee revenue and interest income. Shares are roughly flat.

BK has outperformed XLF since the April lows; Citigroup has been a top performer.

European gauges mixed but well off their intraday lows, with shares in France leading losses as investors look ahead to US inflation data. Defense stocks outperform
while construction and auto sectors lag. UK retail sales growth slowed to just 1.2%, for a fourth consecutive month in December, with customers thought to be waiting for post-Christmas discounts. Vinci shares fall as much as 3.7% as French infrastructure stocks
drop on ratings downgrades by Bank of America, concerned by the risk of rising French taxes. Thales shares fall as much as 2.4% as Deutsche Bank downgrades several defense names, citing uncertainties surrounding the French defense budget. Symrise shares gained
as much as 7.3% after the company announced a €400 million ($467 million) share buyback and said it’s in advanced talks to sell its terpene business. Orsted surged as much as 6.6% after a US judge ruled work can resume on a wind farm off the coast of Rhode
Island. Raspberry PI shares slump as much as 10% to a record low after the computing company’s strong results were overshadowed by its warning over the rapid increase in the cost of DRAM memory chips. Stoxx 600 -0.1%, DAX +0.1%, CAC -0.25%, FTSE 100 -0.05%.
Defense +0.9%, Banks +0.6%, Technology +0.6%. Construction -2.2%, Autos -1.1%.

Shares in Asia were mostly higher, with the MSCI Asia Pacific Index rising 0.9% with financials being a major contributor. Tokyo returned from holiday with a bang,
rising to an all-time peak as investors welcome a weakening yen and the chance of even more aggressive fiscal stimulus. South Korea and Taiwan also hit records. Nikkei 225 rallied more than 3%, while long JGB yields surge amid reports that Japanese Prime Minister
Takaichi intends to call a snap election.  The “snap election” narrative ignited a risk-on surge in Japanese equities, with traders wagering that political continuity and bolder policy easing will outweigh any near-term uncertainties from the vote itself.
Elsewhere in Asia, South Korea’s main stock exchange plans to extend trading hours. Korea Exchange aims to add pre-market and after-market trading to extend opening hours to 12 a day from the current 6.5 starting in June. Chinese healthcare stocks gain as
several drugmakers announce positive updates at the JPMorgan Healthcare Conference. Nikkei 225 +3.1%, Kospi +2.5%, Vietnam +1.4%, Hang Seng Index +0.9%, Singapore +0.8%, Indonesia +0.7%, ASX 200 +0.6%, Taiwan +0.5%. Philippines -0.2%, Sensex -0.3%, Thailand
-0.6%, CSI 300 -0.6%.

FIXED INCOME: 
 

Treasuries hold small losses across a flat yield curve in early US trading. US yields are 1bp to 2bp higher on the day as10-year yield adds a basis point to 4.19%.
Japanese government bond yields spiked, signaling concerns over rising fiscal deficits and debt servicing costs in an already highly leveraged economy. US session features a 30-year bond auction, a factor for curve-steepening, as well as December CPI data
and two Fed speakers. Treasury coupon auction cycle concludes with $22 billion 30-year bond reopening, following good demand for Monday’s 3- and 10-year note sales.

METALS: 

Gold steadied close to a record as markets kept a close eye on the Trump administration’s renewed attacks on the Federal Reserve that have stoked concerns about its
independence. Spot silver surpasses $87 per ounce for the first time, up over 21% year-to-date. Citigroup forecasts that gold will reach $5,000 an ounce and silver will get to $100 an ounce in the next three months.  CME said it will change the way it sets
margins for gold, silver, platinum, and palladium futures after a surge in prices and volatile trading. The new approach will set margins based on a percentage of notional, the CME said in a notice, and takes effect from today’s close. Previously, they were
based on a dollar amount. Spot gold +0.1%, Silver +2%, Copper futures +0.1%.

ENERGY:   

Oil prices gained as unrest in Iran fanned fears for supplies. While authorities in Tehran have said they have now quelled the protests, the unrest appears to be
persisting, and an activist group warned that the civilian death toll could be in the thousands. Brent rose above $65 a barrel after the US escalated pressure on Iran, while tankers were attacked near a vital terminal for Kazakh crude on Russia’s Black Sea
coast. Brent futures extended gains of more than 6% over the previous three sessions. Goldman cut its 2027 oil forecast by $5 to $54 per barrel. It expects prices to bottom toward the end of 2026. WTI +1.9%, Brent +1.8%, US Nat Gas +1.8%, RBOB +1.2%. 

CURRENCIES: 

In currency markets, the yen hit its lowest level since 2024, and the dollar steadied after posting its biggest slump since Christmas in the previous session. The
yen came under heavy fire, falling to an all-time low against both the euro and Swiss franc, sparking another round of verbal warnings from Japanese officials that can often precede intervention. The move was fueled by heavy bets on aggressive fiscal stimulus
after Kyodo reported that Japanese PM Sanae Takaichi plans to call a snap election. US$ Index +0.15%, GBPUSD -0.05, EURUSD -0.1%, USDJPY +0.4%, AUDUSD -0.2%, NZDUSD -0.2%, USDCHF +0.2%, USDCAD is flat, USDSEK +0.25%, USDNOK +0.2%.

Spot Bitcoin +1%, Spot Ethereum +1.4%. 

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
• Albemarle (ALB) Raised to Buy at Deutsche Bank; PT $185
• Alliant Energy (LNT) Raised to Outperform at BMO; PT $71
• AMD (AMD) Raised to Overweight at KeyBanc; PT $270
• Anglogold (AU) Raised to Neutral at Nedbank CIB; PT $90.22
• BXP (BXP) Raised to Overweight at Barclays; PT $82
• CenterPoint Energy (CNP) Raised to Outperform at BMO; PT $42
• Colgate-Palmolive (CL) Raised to Equal-Weight at Wells Fargo
• Constellium SE (CSTM) Raised to Overweight at Wells Fargo; PT $25
• DiamondRock Hospitality (DRH) Raised to Buy at Deutsche Bank; PT $12
• Digital Realty (DLR) Raised to Equal-Weight at Barclays; PT $164
• EastGroup (EGP) Raised to Overweight at Barclays; PT $210
• Enhabit (EHAB) Raised to Buy at TD Cowen; PT $12
• Hub Group (HUBG) Raised to Outperform at Evercore ISI
• Intel (INTC) Raised to Overweight at KeyBanc; PT $60
• Kennametal (KMT) Raised to Buy at Jefferies; PT $40
• KLA Corp (KLAC) Raised to Buy at TD Cowen; PT $1,800
• Kodiak Gas Services (KGS) Raised to Overweight at Barclays; PT $42
• Lithium Argentina AG (LAR CN) Raised to Buy at Deutsche Bank; PT $8.30
• Lowe’s (LOW) Raised to Buy at Gordon Haskett; PT $325
• Mastercard (MA) Raised to Buy at Compass Point; PT $735
• Moody’s (MCO) Raised to Outperform at Daiwa; PT $590
• Primoris Services (PRIM) Raised to Buy at Guggenheim; PT $160
• SQM (SQM/B CI) ADRs Raised to Buy at Deutsche Bank; PT $88
• Thor Industries (THO) Raised to Buy at Loop Capital; PT $133
• Vail Resorts (MTN) Raised to Buy at Jefferies; PT $165
• Via Transportation (VIA) Raised to Buy at Goldman; PT $44
• Wyndham Hotels (WH) Raised to Outperform at Mizuho Securities; PT $97
• Downgrades
• Adobe (ADBE) Cut to Market Perform at Oppenheimer
• Alcoa (AA) Cut to Equal-Weight at Wells Fargo; PT $71
• Arthur J Gallagher (AJG) Cut to Market Perform at BMO; PT $275
• AST SpaceMobile (ASTS) Cut to Neutral at B Riley; PT $105
• Atara Bio (ATRA) Cut to Hold at Canaccord; PT $6
• Baytex Energy (BTE CN) Cut to Sector Perform at RBC; PT C$5
• Bentley Systems (BSY) Cut to Neutral at Piper Sandler; PT $45
• Charter Communications (CHTR) Cut to Underweight at Wells Fargo
• CRH (CRH) Cut to Equal-Weight at Wells Fargo; PT $138
• FedEx (FDX) Cut to Neutral at BNP Paribas; PT $280
• Ferrari (RACE) Cut to Hold at HSBC
• Five Below (FIVE) Cut to Hold at Jefferies; PT $210
• HP Inc. (HPQ) Cut to Sell at Goldman; PT $21
• Installed Building (IBP) Cut to Underweight at JPMorgan; PT $245
• Kaiser Aluminum (KALU) Cut to Equal-Weight at Wells Fargo; PT $120
• Knife River Corp (KNF) Cut to Equal-Weight at Wells Fargo; PT $81
• Lineage (LINE) Cut to Equal-Weight at Barclays; PT $38
• Live Nation (LYV) Cut to Hold at Jefferies; PT $155
• MGM Resorts (MGM) Cut to Hold at Truist Secs
• PayPal (PYPL) Cut to Neutral at Daiwa; PT $61
• Quebecor (QBR/B CN) Cut to Hold at Canaccord; PT C$51.25
• Rapid7 (RPD) Cut to Neutral at Citi; PT $15
• Saia (SAIA) Cut to Inline at Evercore ISI
• SimilarWeb (SMWB) Cut to Neutral at Goldman; PT $7.50
• Stag Industrial (STAG) Cut to Underweight at Barclays; PT $39
• Sun Country Airlines (SNCY) Cut to Neutral at JPMorgan; PT $19
• Synopsys (SNPS) Cut to Neutral at Piper Sandler; PT $520
• Udemy (UDMY) Cut to Sector Weight at KeyBanc
• UPS (UPS) Cut to Underperform at BNP Paribas
• XPO Inc. (XPO) Cut to Inline at Evercore ISI
• Initiations
• AG Growth International (AFN CN) Reinstated Buy at TD Cowen; PT C$41
• AMD (AMD) Rated New Buy at China Renaissance; PT $291
• Boston Scientific (BSX) Rated New Buy at CTBC Securities; PT $122
• Cameco (CCO CN) Reinstated Buy at William O’Neil
• Disney (DIS) Rated New Accumulate at Phillip Secs; PT $130
• Fluent (FLNT) Rated New Buy at Singular Research; PT $5
• Futu Holdings (FUTU) ADRs Rated New Buy at UOB Kay Hian; PT $242
• Gatekeeper Systems (GSI CN) Rated New Speculative Buy at Canaccord
• Lynas (LYC AU) ADRs Rated New Outperform at William Blair
• MP Materials (MP) Rated New Outperform at William Blair
• NetApp (NTAP) Rated New Buy at Goldman; PT $128
• OGE Energy (OGE) Reinstated Market Perform at BMO; PT $45
• Orla Mining (OLA CN) Rated New Outperform at National Bank; PT C$27
• Reddit (RDDT) Rated New Outperform at Evercore ISI
• SolarEdge (SEDG) Rated New Market Perform at Raymond James
• Sunrun (RUN) Rated New Market Perform at Raymond James
• Whitestone REIT (WSR) Reinstated Buy at Ladenburg Thalmann; PT $17

Data sources: Bloomberg, Reuters, CQG

David Wienke