Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET New York Fed Services Business Activity; 9:15ET Industrial Production, Manufacturing
(SIC) Production, Capacity Utilization; 10:00ET NAHB Housing Market Index; 10:50ET Fed’s Collins speaks; 11:00ET Fed’s Bowman speaks; 3:30ET Fed’s Jefferson speaks

Highlights and News:  

• US and Taiwan Clinch Deal to Cut Tariffs, Boost Chip Investment
• Canada Inks Trade Truce With China in Wide-Ranging-Agreement to Lower Trade Barriers 
• Japan’s gold reserves rose to a record $120 billion in 2025, up +60% y-o-y
• HASSETT: TRUMP TO UNVEIL PLAN FOR 401(K) FOR HOME DOWN PAYMENTS
• US equity funds see largest weekly inflow in months
• ESPN Research: teams from warm-weather climates are 3-12 in the past 10 postseasons when the temperature is 32 degrees or lower; Coldest the Rams have played this season was 45 degrees

Global stocks are mixed to higher with pockets of upside in tech-heavy regions. The MSCI Emerging Markets Index rose as much 0.7% to a new high. Emerging markets
are showing a generally positive but cautious tone, building on their strong 2025 performance where they significantly outperformed US stocks. Analysts from firms like JPMorgan, Goldman Sachs, and others remain bullish on EM equities for 2026, forecasting
robust returns driven by earnings growth, AI-related tailwinds (especially in Asia), and inflows after years of underperformance. The US and Taiwan agreed to a trade pact that would lower tariffs on goods from Taiwan to 15% and see Taiwanese semiconductor
companies increase financing for American operations by $500 billion. Under the deal, Taiwanese firms will make at least $250 billion in direct investments to boost advanced semiconductor production on American soil. Taiwan’s government will back this with
an additional $250 billion in credit guarantees to support broader supply-chain expansion and ecosystem growth in the US. China and Canada reached a wide-ranging agreement to lower trade barriers and rebuild ties. Canada will allow Chinese electric vehicles
into its market at a tariff rate of about 6%, down from the current rate of 100%, and China will offer visa-free travel to Canadians. Next week’s key events feature central bank monetary policy decisions from Japan, Malaysia, and Indonesia, alongside the high-profile
World Economic Forum Annual Meeting in Davos.

EQUITIES: 

US equity futures are higher, led by Nasdaq as the latest wave of enthusiasm for technology stocks carried on. Taiwan aims to become a close strategic partner with the United States in
the area of artificial intelligence after striking a deal to cut tariffs and boost its investment in the US. This year’s great rotation shows no sign of slowing, broadening the base of names driving Wall Street’s push back towards record highs.  Small-cap
stocks continued their impressive run, outperforming the S&P 500 for the 10th consecutive trading session, the longest such stretch since 1990. Investors remain bullish on equities, continuing to pour money into stocks while reducing cash positions, according
to Bank of America. US stock funds saw $36.5 billion of inflows in the week ended Jan. 14.

Futures ahead of the bell: E-Mini S&P +0.15%, Nasdaq +0.5%, Russell 2000 +0.15%, DJI +0.05%.

In pre-market trading, JB Hunt Transport Services Inc. (JBHT) falls 4% after the trucking firm reported quarterly revenue that missed estimates. Mosaic (MOS) falls
6% after the producer of phosphate and potash crop nutrients said North American fertilizer demand declined well beyond normal seasonal softness in the fourth quarter. PNC Financial Services Group Inc. (PNC) rises 3% after reporting a 9% increase in fourth-quarter
revenue, beating analysts’ estimates as financing and dealmaking by middle-market customers accelerated. Regions Financial (RF) falls 4% after the regional bank reported EPS and total loans for the fourth quarter that came in below the average analyst estimate.
Dave & Buster’s Entertainment (PLAY) shares are up over 5% after Benchmark Co. upgraded the restaurant and entertainment company to buy from hold. Shares of
memory and storage companies are rising with the group set to extend strong year-to-date advances. Sandisk is up 4.6%; the company has risen more than 70% in January. Seagate Technology is up 3.8%; the stock is up 16% year to date. Micron Technology rose ~5%;
stock up 18% YTD.

European gauges dip but remain on track for their fifth straight weekly advance, the longest winning streak since May, as investors remain confident about earnings
and artificial intelligence demand. Health care stocks outperform while miners lag, as news of a Chinese clampdown on high-frequency trading sinks metals. Kloeckner & Co shares surge as much as 30% after Worthington Steel agreed to buy the metals processor
for €11 per share in cash. Polar Capital gained as much as 8% following the asset manager’s quarterly update and announcement of a share buyback program. Novo Nordisk shares advance as much as 6.7% as analysts at Berenberg and BofA lift their price targets
on the stock, while Deutsche Bank calls the Danish drugmaker one of its top picks. Elekta shares gain as much as 9% after its Evo Linear Accelerator imaging system gained clearance from the US FDA. Richemont shares falls as BofA downgrades to neutral from
buy following the luxury goods group’s sales report. Stoxx 600 -0.15%, DAX -0.2%, CAC -0.7%, FTSE 100 -0.05%. Defense +0.9%, Utilities +0.6%, Healthcare +0.6%. Basic Resources -2.8%, Chemicals -1.6%, Personal Goods -1.3%.

Shares in Asia were mixed to higher with Taiwan’s key index jumping to a record following a US-Taiwan trade deal, while results from TSMC helped confirm an upbeat outlook
for artificial intelligence demand. The MSCI Asia Pacific Index advanced 0.4%, with TSMC the biggest contributor along with other tech firms. Taiwan’s Taiex climbed nearly 2% and Korea’s Kospi gained 0.9% to a new high. Hong Kong and China equities wiped out
opening gains after a report of high-speed traders clampdown. China is pulling the plug on a key advantage held by high-frequency traders, removing servers dedicated to those firms out of local exchanges’ data centers. Chinese stocks ended marginally lower
amid fresh signs that authorities are attempting to cool the market rally, with record outflows seen in some of the exchange‑traded
funds heavily owned by the so‑called ‘national team’ of
state-backed investors. Chinese power stocks rose after the State Grid Corp. of China set plans to grow spending by 40% over the next five years. Taiwan +1.95%, Thailand +1.1%, Kospi +0.9%, Vietnam +0.8%, ASX 200 +0.5%, Singapore +0.3%, Sensex +0.2%. Hang
Seng Index -0.3%, Philippines -0.3%, Nikkei 225 -0.3%, CSI 300 -0.4%.
Indonesia was closed for holiday.

FIXED INCOME: 
 

Treasuries are roughly flat with 10-year yield steady at 4.17% and the curve just slightly flatter. The 10-year Treasury yield is headed for a fifth straight week
of minimal change, rivaling its longest stretch of such stability seen in the past two decades. Weekly ranges over the past five weeks have averaged under 10 basis points. Five presidents of regional Fed banks indicated on Thursday that the central bank is
now well-positioned to sit tight and wait for further data before cutting rates again.

METALS: 

Spot gold slides back below $4,600 an ounce as the easing of near-term Iran-related fears has trimmed the risk premium. Silver falls over 4% after the US refrained
from putting import tariffs on critical minerals but was still up more than 13% for the week on surging demand for precious metals. This follows a sharp correction in safe-haven demand as geopolitical tensions around Iran eased (with reports of Netanyahu urging
Trump to delay action and signs of de-escalation in protests), prompting some profit-taking after the metals’ stellar start to the year. Silver has been the bigger outperformer YTD but it’s seeing sharper pullbacks amid profit booking and reduced immediate
risk premium. Japan’s gold reserves rose to a record $120 billion in 2025, up +60% year-over-year. Gold reserves now reflect 9% of Japan’s total reserve assets, more than doubling since 2022. Spot gold -0.6%, Silver -4.4%, Copper futures -2.6%.

ENERGY:   

Oil prices are higher at the end of a volatile week as traders balanced lingering supply concerns tied to unrest in Iran with supportive broader market sentiment
and risk-on flows. Brent crude traded above $64 a barrel after plunging 4.2% on Thursday, the most since June. Israel’s Prime Minister Benjamin Netanyahu asked President Trump to postpone plans for an attack on Iran, the New York Times reported. That reduced
the perceived risk of disruptions to Iranian oil production or potential threats to shipping through key routes like the Strait of Hormuz. Combined with other factors like ample global supply outlooks and recent US inventory builds, the risk premium in oil
has softened, though lingering unrest in Iran, Venezuela turmoil, and Black Sea supply issues continue to provide some underlying support. The US is ramping up its military presence in the Middle East. At least one aircraft carrier is moving into the region
and other military assets are expected to be shifted there in the coming days and weeks, Fox News reported, citing military sources. WTI +0.9%, Brent +1%, US Nat Gas +1.9%, RBOB +0.4%. 

CURRENCIES: 

In currency markets, the yen strengthens on renewed intervention warning by Japan’s Katayama. Japan’s Finance Minister Satsuki Katayama said Tokyo would not rule
out any options to counter weakness in the yen, including coordinated intervention with the US.  Risk-on flows are capping dollar upside, but the greenback finds support from sticky US data expectations, fiscal policy discussions, and geopolitical caution.
The dollar index is poised for a third consecutive weekly gain after positive US economic data pushed out expectations for rate cuts by the Federal Reserve. Emerging market currencies show pockets of strength tied to broader EM optimism. European Central Bank
Chief Economist Philip Lane indicated that the ECB has no plans to discuss any interest rate adjustments in the near term, but new shocks, like a potential deviation by the Fed from its mandate, could upset the outlook. US$ Index -0.1%, GBPUSD +0.1%, EURUSD
+0.05%, USDJPY -0.35%, AUDUSD -0.05%, NZDUSD +0.25%, USDCHF -0.2%, USDCAD ~flat, USDSEK +0.05%, USDNOK -0.25%.

Spot Bitcoin -0.1%, Spot Ethereum +0.2%.

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
• Armour Residential (ARR) Raised to Buy at Jones; PT $20.50
• AutoNation (AN) Raised to Overweight at JPMorgan; PT $235
• BioNTech (BNTX) ADRs Raised to Buy at Goldman; PT $142
• Coupang (CPNG) Raised to Buy at Deutsche Bank; PT $25
• Dave & Buster’s (PLAY) Raised to Buy at Benchmark; PT $30
• Enbridge (ENB CN) Raised to Sector Outperform at Scotiabank; PT C$73
• Garmin (GRMN) Raised to Equal-Weight at Barclays; PT $217
• Grab Holdings (GRAB) Raised to Buy at HSBC; PT $6.20
• Honeywell (HON) Raised to Overweight at JPMorgan; PT $255
• MDA Space (MDA CN) Raised to Overweight at Morgan Stanley; PT C$46
• Monster Beverage (MNST) Raised to Neutral at BNP Paribas; PT $77
• PepsiCo (PEP) Raised to Outperform at BNP Paribas; PT $179
• Rocket Lab (RKLB) Raised to Overweight at Morgan Stanley; PT $105
• Seagate (STX) Raised to Neutral at Susquehanna; PT $280
• YETI Holdings (YETI) Raised to Overweight at KeyBanc; PT $57
• Downgrades
• 3M Co (MMM) Cut to Neutral at JPMorgan; PT $182
• Acushnet (GOLF) Cut to Sector Weight at KeyBanc
• Afya (AFYA) Cut to Neutral at UBS; PT $16
• Baytex Energy (BTE CN) Cut to Hold at TD Cowen; PT C$5
• Brown-Forman (BF/B) Cut to Underperform at BNP Paribas
• Central Garden & Pet (CENT) Cut to Underweight at JPMorgan; PT $28
• Clearwater Analytics (CWAN) Cut to Neutral at DA Davidson; PT $24.55
• Conoco (COP) Cut to Underperform at BofA; PT $102
• Devon (DVN) Cut to Sector Perform at Scotiabank; PT $41
• Eastman Chemical (EMN) Cut to Sector Perform at RBC; PT $70
• EOG Resources (EOG) Cut to Sector Weight at KeyBanc
• Fortive (FTV) Cut to Underweight at JPMorgan; PT $57
• Hilton Grand Vacations (HGV) Cut to Equal-Weight at Morgan Stanley
• Honest Co. (HNST) Cut to Underweight at JPMorgan
• HP Inc. (HPQ) Cut to Underweight at Barclays; PT $18
• Cut to Sell at CFRA
• Iridium Communications (IRDM) Cut to Equal-Weight at Morgan Stanley
• J M Smucker (SJM) Cut to Equal-Weight at Morgan Stanley; PT $105
• Kraft Heinz (KHC) Cut to Underweight at Morgan Stanley; PT $24
• Mach Natural Resources (MNR) Cut to Sector Weight at KeyBanc
• Marriott Vacations (VAC) Cut to Underweight at Morgan Stanley; PT $52
• Melco Resorts (MLCO) ADRs Cut to Neutral at JPMorgan; PT $7.70
• Meritage Homes (MTH) Cut to Neutral at BofA; PT $82
• MGM Resorts (MGM) Cut to Underweight at Morgan Stanley; PT $33
• Molson Coors (TAP) Cut to Underperform at BNP Paribas; PT $40
• OneStream (OS) Cut to Underweight at JPMorgan; PT $24
• Penumbra (PEN) Cut to Neutral at Baird; PT $374
• Cut to Hold at Truist Secs; PT $374
• Cut to Market Perform at Leerink; PT $374
• Cut to Hold at Nephron Research; PT $374
• Cut to Neutral at BTIG
• Cut to Neutral at Citi; PT $374
• Petrobras (PETR4 BZ) ADRs Cut to Neutral at Banco BTG Pactual; PT $15
• Shift4 Payments (FOUR) Cut to Hold at Deutsche Bank
• Sigma Lithium Corp (SGML CN) Cut to Hold at Canaccord; PT C$20.50
• Tractor Supply (TSCO) Cut to Hold at Truist Secs; PT $55
• Zegna Group (ZGN) Cut to Neutral at BofA
• Initiations
• ARM Holdings (ARM) ADRs Reinstated Outperform at Haitong Intl
• Astera Labs (ALAB) Rated New Buy at President Capital Management
• Birkenstock (BIRK) Rated New Neutral at Seaport Global Securities
• Construction Partners (ROAD) Rated New Neutral at B Riley; PT $117
• Evercore (EVR) Rated New Buy at William O’Neil
• Fabrinet (FN) Reinstated Buy at William O’Neil
• Hesai Group (HSAI) ADRs Reinstated Buy at William O’Neil
• Knife River Corp (KNF) Rated New Buy at B Riley; PT $92
• Martin Marietta (MLM) Rated New Neutral at B Riley; PT $700
• Staar Surgical (STAA) Resumed Underweight at Morgan Stanley; PT $13
• Unity Software (U) Rated New Buy at Freedom Capital; PT $52
• Vulcan Materials (VMC) Rated New Buy at B Riley; PT $345

Data sources: Bloomberg, Reuters, CQG

David Wienke