Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET PPI, Retail Sales, Current Account Balance; 9:50ET Fed’s Paulson speaks; 10:00ET
Existing Home Sales, Business Inventories, Fed’s Miran speaks; 12:00ET Fed’s Bostic speaks, Fed’s Kashkari speaks; 2:10ET Fed’s Williams speaks

Highlights and News:  

• TRUMP: NATO WILL BE MORE FORMIDABLE WITH GREENLAND IN US HANDS, ANYTHING LESS THAN THAT IS UNACCEPTABLE
• US Supreme Court may announce opinions on tariffs today
• Iran warns neighbors it could strike US bases if Washington intervenes in protests
• More than 2,500 people have been killed in Iran, activist groups said
• Japan’s Takaichi set to call early election later this month to shore up mandate
• Obamacare Signups Fall by More Than a Million as Subsidies Lapse
  
• China’s trade surplus climbed to $1.2 trillion in 2025, extending a record run
• China raises margin financing ratio to 100% to curb risks
  
• Chicago Bears have a 3-3 record this season when trailing by 10 points or more in the final five minutes. The rest of the league is 3-158.

Global stock markets show a mixed and generally cautious tone, with Asian markets leading gains driven by Japanese strength. Japanese PM Sanae Takaichi will dissolve
parliament for an election early in the parliamentary session starting later this month, according to the secretary general of her ruling party. Caution was more evident in Europe and US futures markets after a report that the US has advised personnel to leave
a US air base in Qatar. Prime Minister Benjamin Netanyahu’s aircraft, Wing of Zion, has taken off from Israel. This could be a sign a strike on Iran is very close. Ahead of the previous strike on Iran, Wing of Zion also departed just hours before the operation.
A man inside Iran spoke to Fox News using Starlink, describing battles in the streets with people fleeing for their lives, saying “the atmosphere is like a war zone.” Trump said that the US needs Greenland for national security and NATO will be more formidable
with Greenland in US hands. He added that anything less than that is unacceptable. Meanwhile, A high-stakes meeting of Danish and Greenlandic foreign ministers with Marco Rubio and JD Vance is taking place in Washington today. Also in the spotlight today is
a possible Supreme Court ruling on the legality of Trump’s emergency tariffs.

EQUITIES: 

US equity futures fell, pointing to the first back-to-back losses of 2026 for the S&P 500 on a less-than-rosy start to earnings season and as traders watched for an American response
to the protests in Iran. Investors are bracing for a busy lineup of potential catalysts, including a slate of Fed speakers, producer price data, retail sales figures, and the potential for a Supreme Court decision on US tariffs. Bank of America, Wells Fargo
and Citigroup all report today, with investors focused on any comments on the possible impact from Trump’s proposed credit card rate cap. Overall, estimates for the earnings season look fairly lofty, leaving little room for error as stocks are already priced
for perfection. AbbVie and Cooper Cos are scheduled to appear at the JP Morgan healthcare conference. About 1.4 million fewer people have signed up for Obamacare plans so far compared to last year as a federal tax credit expires. Zscaler and Elastic are among
companies presenting at the Needham growth conference. The rotation and portfolio rebalancing in stocks from tech into more economically sensitive areas might not last, according to Nomura’s Charlie McElligott.

Futures ahead of the data/bell: E-Mini S&P -0.4%, Nasdaq -0.5%, Russell 2000 -0.3%, DJI -0.3%.

In pre-market trading, Alibaba ADRs (BABA) are up 2.6% amid investor excitement over its AI offerings ahead of a product event on Thursday. Bank of America shares (BAC)
are down 1.5% after the lender reported net interest income for the fourth quarter that beat the average analyst estimate. Citigroup shares (C) are up 1.2% after it reported FICC sales & trading revenue for the fourth quarter that beat. Glaukos shares (GKOS)
slide 14% after the health-care supplies maker reported preliminary fourth-quarter sales of iDose, its FDA approved implant, that fell short of expectations. Mining and metals stocks (NEM +1.2%, AEM +1.9%, CDE +3.6%) are rising as gold, silver and copper hit
new highs. Okta Inc. shares (OKTA) are up 2% after Stephens upgraded the software company to overweight from equal-weight.  TG Therapeutics shares (TGTX) rise 10% after the drugmaker reported preliminary sales for the fourth quarter that topped estimates.
Trip.com ADRs (TCOM) are down 15% after Chinese regulators said the online travel agency is being investigated over alleged antitrust conduct. Wells Fargo shares (WFC) fall by 2.4% after the bank reported net interest income and revenue for the fourth quarter
slightly below analyst estimates.

KBWB bank ETF underperforming the S&P500 last few days but not broader financials (XLF).

European gauges are mixed after reversing early gains, except for in the UK where the FTSE 100 holds gains on strength in miners. Endeavour Mining led the FTSE 100,
up over 4%, while Glencore rose 2.7% and Rio Tinto gained 2%. AstraZeneca was up 2.8% after announcing it has acquired Modella AI. The Stoxx Europe 600 Index turned flat and hit a session low as oil prices spiked around noon. BP Plc shares fell after the oil
major said it expects to take as much as $5 billion in write-downs for the fourth quarter, just weeks after a leadership change as it pivots back to fossil fuels. Orion shares gains as much as 13%, the most since February 2022, as the Finnish drugmaker preannounces
its 2026 guidance. Novo Nordisk’s CEO said he is ready to go ‘very big’ in the hunt for obesity deals. Ipsen shares rise as much as 4.9%, hitting their highest level since October 2018, after the pharmaceutical company secured breakthrough therapy designation
from the US Food & Drug Administration for a combination of drugs targeting leukemia. Autoneum shares slump as much as 11% as UBS downgrades the Swiss car-parts supplier to neutral from buy. Stoxx 600 +0.05%, DAX -0.4%, CAC +0.05%, FTSE 100 +0.3%. Autos +1.6%,
Basic Resources +1.3%, Healthcare +1.2%. Defense -2.2%, Technology -1.4%

Shares in Asia were mostly higher, with the MSCI Asia Pacific Index gaining 0.7% as investors awaited a possible US Supreme Court ruling on Trump’s tariffs. Japanese
stocks outperformed significantly, with the Nikkei 225 surpassing 54,000 amid expectations of a snap election under Prime Minister Sanae Takaichi, boosting stimulus hopes (the so-called “Takaichi trade”). Exports increased 6.6% in December, topping estimates.
Chinese stocks reversed early gains after local exchanges tighten margin financing ratio to 100% to curb risks. China’s trade surplus climbed to $1.2 trillion in 2025, extending a record run as the tariff war sent exporters in search of markets beyond the
US. Chinese stocks have added $1.2 trillion in value over the past month alone. In corporate news, Trip.com shares fell 6.5% after China launched an investigation into alleged antitrust practices. Alibaba climbed in Hong Kong on anticipation of a product update
announcement. Nikkei 225 +1.5%, Indonesia +0.9%, Taiwan +0.8%, Thailand +0.8%, Kospi +0.6%, Hang Seng Index +0.6%, ASX 200 +0.1%. Sensex -0.3%, Philippines -0.3%, CSI 300 -0.4%, Vietnam -0.4%.

FIXED INCOME: 
 

Treasuries are higher across the curve, with 10-year yield down ~2bps around 4.155% and the curve roughly flat. Focal points of US session include October and November
PPI reports, November retail sales and five scheduled Fed speakers. The Fed’s Barkin said businesses are still passing price increases from tariffs along to consumers, creating some inflation pressure. 

METALS: 

Metals are surging to fresh record highs, with gold, silver, copper, and tin all posting new peaks, supported by expectations of lower US interest rates and a pickup
in risk appetite across Chinese financial markets. Precious metals extend their record run, with silver surging past $90 an ounce for the first time and spot gold hitting a record on haven buying amid various global factors.  Base metals have been buoyed by
strong industrial demand expectations. Silver’s strong rally may become overstretched in the near term, though supply-and-demand dynamics should support the metal over the longer run, according to strategists at BNP Paribas Wealth Management. Spot gold +0.9%,
Silver +4.9%, Copper futures +0.3%.

ENERGY:   

Oil prices erased earlier losses and moved higher after Reuters reported some personnel have been advised to leave a US air base in Qatar that was targeted by Iran
in retaliatory airstrikes last year. Traders are also awaiting the US response to unrest in Iran after President Turmp said he would “act accordingly”. Trump suggested his next move would hinge on a meeting of the National Security Council that met on Tuesday
without Trump. Tehran has warned neighboring countries hosting US troops that it will retaliate against American bases if the US carries out threats to intervene in protests in Iran. Brent crude futures rise above $66 a barrel after adding more than 9% over
the previous four sessions. The dark fleet of tankers shipping illicit oil around the world is rushing to seek the perceived protection of the Russian flag after the US started seizing vessels involved in the Venezuelan trade. At least 26 ships have switched
registration to Russia since the beginning of last month. WTI +1.1%, Brent +1.25%, US Nat Gas -4.2%, RBOB +0.6%. 

CURRENCIES: 

In currency markets, the dollar turns better offered as broad-based metals rally produces a slew of fresh records. The Japanese yen fell to an 18-month low before
reversing losses, raising fresh concerns about potential intervention, while the Japanese PM is set to call a snap election early in the parliamentary session starting later this month. Japan’s finance minister issued another verbal warning, saying officials
would take “appropriate action against excessive FX moves without excluding any options”, which was enough to lift the yen. Offshore yuan recoups early softness following strong China trade numbers. BOE’s Taylor said there are signs of “substantial trade divergence”
that is lowering UK inflation, as he predicted interest rates will fall to neutral levels sooner rather than later. Sterling edges higher. US$ Index -0.05%, GBPUSD +0.15%, EURUSD +0.05%, USDJPY -0.3%, AUDUSD is flat, NZDUSD +0.1%, USDCHF is flat, USDCAD -0.1%,
USDSEK -0.2%, USDNOK -0.2%.

Spot Bitcoin +1%, Spot Ethereum +2.8%. Bitcoin advanced to a two-month high, finally joining the rally in risk assets and precious metals after spending weeks stuck
in a tight range.  

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
• Adient (ADNT) Raised to Buy at UBS; PT $30
• Check Point Software (CHKP) Raised to Overweight at Stephens; PT $240
• Cintas (CTAS) Raised to Overweight at Wells Fargo; PT $245
• CME Group (CME) Raised to Buy at TD Cowen
• CNH Industrial (CNH) Raised to Buy at Goldman; PT $13
• ERO Copper (ERO CN) Raised to Buy at Canaccord; PT C$48
• Fabrinet (FN) Raised to Overweight at Barclays; PT $537
• Flex (FLEX) Raised to Outperform at Raymond James; PT $75
• Flywire (FLYW) Raised to Buy at Seaport Global Securities; PT $18
• Global Payments (GPN) Raised to Buy at Seaport Global Securities
• Hyatt (H) Raised to Buy at Goldman; PT $198
• Materion (MTRN) Raised to Overweight at KeyBanc; PT $161
• Nutrien (NTR CN) Raised to Overweight at Morgan Stanley; PT C$106.92
• Okta (OKTA) Raised to Overweight at Stephens
• Prologis (PLD) Raised to Sector Outperform at Scotiabank; PT $146
• Downgrades
• Arthur J Gallagher (AJG) Cut to Neutral at Cantor; PT $282
• BlackRock (BLK) Cut to Hold at TD Cowen
• Coca-Cola Europacific (CCEP) Cut to Neutral at BofA
• Douglas Emmett (DEI) Cut to Sector Perform at Scotiabank; PT $12.50
• Global Payments (GPN) Cut to Hold at Deutsche Bank; PT $80
• KKR & Co. (KKR) Cut to Hold at TD Cowen
• Kraken Sonar (PNG CN) Cut to Sector Perform at National Bank; PT C$8.75
• Martin Marietta (MLM) Cut to Neutral at DA Davidson; PT $690
• Rivian (RIVN) Cut to Sell at UBS; PT $15
• Stifel Financial (SF) Cut to Hold at TD Cowen
• V2X Inc (VVX) Cut to Hold at Truist Secs
• Volaris (VOLARA MM) ADRs Cut to Neutral at JPMorgan; PT $11
• Vulcan Materials (VMC) Cut to Neutral at DA Davidson; PT $330
• Warner Bros Discovery (WBD) Cut to Neutral at Guggenheim; PT $30
• Initiations
• AppLovin (APP) Rated New Outperform at Evercore ISI; PT $835
• Ascentage Pharma (6855 HK) ADRs Rated New Buy at Rodman & Renshaw; PT $48
• Bank of America (BAC) Rated New Outperform at CICC; PT $62
• Biomea Fusion (BMEA) Rated New Buy at Rodman & Renshaw; PT $8
• Boyd Group (BYD CN) Reinstated Sector Outperform at Scotiabank; PT C$264
• BWX Technologies (BWXT) Reinstated Buy at William O’Neil
• Citigroup (C) Rated New Outperform at CICC; PT $138
• Coherent Corp (COHR) Reinstated Buy at William O’Neil
• Groupe Dynamite (GRGD CN) Rated New Buy at UBS; PT C$115
• Idacorp (IDA) Rated New Overweight at Barclays; PT $144
• JPMorgan (JPM) Rated New Outperform at CICC; PT $355
• KLA Corp (KLAC) Rated New Outperform at Bernstein
• Mira Pharmaceuticals (MIRA) Reinstated Buy at Rodman & Renshaw; PT $8
• Nextpower (NXT) Reinstated Buy at William O’Neil
• Snap (SNAP) Rated New Underperform at BNP Paribas; PT $8
• Telomir Pharmaceuticals (TELO) Reinstated Buy at Rodman & Renshaw
• Uber (UBER) Rated New Outperform at BNP Paribas; PT $108
• Versant Media (VSNT) Rated New Market Perform at Raymond James
• Wells Fargo (WFC) Rated New Market Perform at CICC; PT $96

Data sources: Bloomberg, Reuters, CQG

David Wienke