Daily Game Plan

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

TODAY’S ECONOMIC DATA:   There is no economic data in the US today and Fed officials are in black-out period

Highlights and News:  

• Iran Wavers on Peace Talks as Tensions Rise After US Seizes Ship
• Iran: No Trust in US as it Violates Ceasefire Agreement; Transfer of Enriched Uranium Never on Table
• “War is in no one’s interest” – Iranian President Masoud Pezeshkian
  
• IRAN WILLING TO ATTEND 2ND ROUND OF TALKS WITH US, PAKISTAN OFFICIALS: AP NEWS
• Iran will respond soon to the US action, Iranian news outlet Press TV
  
• China expresses serious concerns on EU cybersecurity law, to take countermeasures if needed
• A 7.4 magnitude earthquake struck northern Japan, triggering a tsunami warning
  
• JPMorgan Strategists See Rising Profits Even With $100 Oil

Global stocks slipped and oil surged as worries mounted that the US-Iran ceasefire could collapse, with tensions rising sharply over the Strait of Hormuz. US Navy
forces seized an Iranian-flagged ship over a turbulent weekend that included Tehran firing on vessels and reasserting control over the Strait of Hormuz. Iran has no plans to attend potential negotiations with the US in Pakistan, according to its foreign ministry
spokesman, who cited a lack of seriousness on the US side in advancing diplomacy. The United States upheld its blockade of the Strait of Hormuz, while President Trump threatened Iran with mass destruction if no agreement is reached. Iran reversed its decision
to reopen the Strait of Hormuz after the US refused to lift its blockade, and the strait remains all but shut. “We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single
Power Plant, and every single Bridge, in Iran,” Trump said in a post on Sunday. “NO MORE MR. NICE GUY!” The language marks an abrupt shift from Friday, when Trump said an agreement with Iran was all but finalized.

EQUITIES: 

US equity futures are trading lower after a chaotic weekend in the Strait of Hormuz raised fresh doubts about the US-Iran peace talks, just days before Tuesday’s ceasefire deadline. The
WSJ reported that the UAE is said to be in talks with the US about a financial backstop in case the Iran war plunges the country into further crisis. Meanwhile, a heavy earnings week lies ahead, with top Wall Street strategists expecting strong results to
provide support for equities. US equities may have further room to advance as investor sentiment remains notably subdued, according to RBC strategists. Oil trading at $100 will not be enough to derail global corporate earnings, JPMorgan strategists wrote in
a note. They see semis, mining and industrials earnings to look positive, while consumer discretionary is likely to be under pressure. In deals, American Airlines said it’s not engaged with or interested in any discussions regarding a merger with United Airlines.
Google is in discussions with Marvell to develop two new chips to run AI models more efficiently, The Information reported. Iran may send a delegation to Islamabad this week for a second round of talks, according to two Pakistani officials this morning…  

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.4%, Russell 2000 -0.8%, DJI -0.4%

In pre-market trading, Airlines and cruise operators are down as the prospects of fuel prices staying at elevated levels weigh on sentiment. American Airlines (AAL)
-3%, Carnival (CCL) -2%. Psychedelic-related stocks rally after President Trump signed an executive order to expedite research and access to the substances used outside the US to treat post-traumatic stress disorder. AtaiBeckley (ATAI) +27%. AST SpaceMobile
(ASTS) drops 14% after Blue Origin’s flagship New Glenn rocket failed to correctly place a satellite made by the Texas-based company in its intended orbit. Fermi Inc. (FRMI) falls 19% after the power company said its chief executive officer and chief financial
officers have stepped down as the firm tries to secure its first customer. Marvell Technology (MRVL) rises 5% after the Information reported that Google is in discussions with the semiconductor company to develop two new chips to run AI models more efficiently.
TopBuild Corp. (BLD) rises 18% after QXO Inc. said it’s acquiring the insulation company for about $17 billion. The acquisition will make QXO the second-largest publicly traded building products distributor in North America. USA Rare Earth (USAR) gains 4%
after agreeing to acquire Brazil’s Serra Verde Group in a cash-and-stock transaction, adding to a string of recent deals in the industry.

Software gets a bounce. IGV gains ~15% last week after holding key Fibonacci support.

Iran decided to fire bullets yesterday in the Strait of Hormuz — A Total Violation of our Ceasefire Agreement! Many of them were aimed at a French Ship, and a Freighter
from the United Kingdom. That wasn’t nice, was it? My Representatives are going to Islamabad, Pakistan — They will be there tomorrow evening, for Negotiations. Iran recently announced that they were closing the Strait, which is strange, because our BLOCKADE
has already closed it. They’re helping us without knowing, and they are the ones that lose with the closed passage, $500 Million Dollars a day! The United States loses nothing. In fact, many Ships are headed, right now, to the U.S., Texas, Louisiana, and Alaska,
to load up, compliments of the IRGC, always wanting to be “the tough guy!” We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge,
in Iran. NO MORE MR. NICE GUY! They’ll come down fast, they’ll come down easy and, if they don’t take the DEAL, it will be my Honor to do what has to be done, which should have been done to Iran, by other Presidents, for the last 47 years. IT’S TIME FOR THE
IRAN KILLING MACHINE TO END! President DONALD J. TRUMP

European gauges are lower as further disruptions in the Strait of Hormuz pushed oil prices higher and dampened hopes for peace in the Middle East. Airlines are the
biggest losers and cyclical shares such as autos, banks and consumer products are also among notable laggards. The energy sector is outperforming. Stocks related to photonics technology for AI data centers soared, with Soitec and Riber in France and UK-listed
IQE up more than 10%, as a rally in the sector extended further. Advanced Medical Solutions shares rally as much as 19% after the maker of surgical and wound care products confirmed it is in discussions with TA Associates regarding a possible takeover offer.
Odfjell Drilling shares drop as much as 7.3% after the company halted production at its Deepsea Atlantic facility following an incident where the rig’s blowout preventer fell to the seabed.  Loomis shares fall as much as 7.3% after Goldman Sachs cut its recommendation
to neutral from buy. Stoxx 600 -1%, DAX -1.3%, CAC -1.1%, FTSE 100 -0.6%. Travel & Leisure -2.2%, Banks -2.1%, Defense -2.1%, Autos -2%. Energy +1.7%, Telecom +0.6%.

Shares in Asia advanced as investors looked past escalated US-Iran tensions, focusing instead on the potential for future talks and robust local tech earnings. The
MSCI Asia Pacific Index rose as much as 0.8% before paring most of its advance to +0.2%. Stocks in Vietnam and Hong Kong led gains in the region, while South Korean shares erased their Iran war losses. Earnings from Korean memory chipmaker SK Hynix due Thursday
are among key upcoming catalysts for the tech trade. Chinese optical fiber stocks rally after a state media report says the industry has seen robust product volumes and price increases since the start of the year. Chinese robotics stocks rise as a sharp improvement
in humanoid robot half‑marathon results in Beijing lifted
sentiment. Vietnam +1.1%, Hang Seng Index +0.8%, CSI 300 +0.6%, Nikkei 225 +0.6%, Kospi +0.4%, Taiwan +0.4%, Philippines +0.3%, Singapore +0.1%, ASX 200 +0.07%, Sensex +0.03%. Thailand -0.05%, Indonesia -0.5%.

FIXED INCOME: 
 

Treasury yields are mixed across the curve with 2-year yield +2bps while 30-year yield is lower by 1.5bps.  10-year yields climbs 1bp to 4.26%; 2s10s -1bp, 5s30s
-4bps. US session quiet for scheduled data, while Fed’s external communications blackout period has now begun ahead of the April 29 policy announcement. Treasury auctions this week include $13 billion 20-year bond reopening on Wednesday and $26 billion 5-year
TIPS Thursday. IG dollar issuance slate includes a couple of deals already. This week, syndicate desks anticipate sales around $20 billion to $25 billion, likely led by regional banks.

METALS: 

Gold fell after a weekend flare-up in Middle Eastern waters renewed inflation risks from an energy-supply shock and cast doubt over talks to end the war. The latest
incidents have jeopardized prospects for potential peace talks in Islamabad before a fragile 14-day ceasefire expires on Tuesday. Trump said he saw a chance for a deal, while also renewing threats to destroy Iranian power plants and bridges. Spot gold fell
nearly 2% to below $4,740 an ounce before paring its loss, trading back above $4,800. Spot gold -0.4%, Silver -1.4%, Copper futures -1.2%. 

ENERGY:   

Oil and natural gas prices surged as the Strait of Hormuz remained closed early Monday. Iran initially announced that ships could pass through before abruptly halting
traffic less than 24 hours later, while the US Navy fired upon and boarded an Iranian-flagged cargo ship in the Gulf of Oman. Iran will respond soon to the US action, Iranian news outlet Press TV reported, citing the country’s military command. Israel struck
targets in Lebanon on Saturday despite last week’s ceasefire agreement, illustrating how precarious the truce with Tehran-backed Hezbollah remains. Brent crude futures rise ~5% to around $95 a barrel after weekend developments cast doubt on the prospects for
US-Iran peace talks. Despite Iran’s reluctance to engage in the talks, President Masoud Pezeshkian said there is no appetite for a return to fighting, urging that ‘all rational and diplomatic avenues should be used to reduce tensions,’ according to the state-run
Islamic Republic News Agency.”  WTI +5.6%, Brent +4.9%, US Nat Gas +1.8%, RBOB +2.7%.

CURRENCIES: 

Currency markets trade in mostly tight ranges with the dollar slightly higher versus most peers while the krone leads G-10 gains.  The euro is steady after falling
as much as 0.3% versus the dollar. Sterling reverses an earlier loss to trade steady. Keir Starmer is preparing for a showdown with the senior official he sacked over the appointment of Peter Mandelson as US ambassador, as calls for the prime minister to resign
grow. US$ Index +0.1%, GBPUSD -0.02%, EURUSD -0.01%, USDJPY +0.15%, AUDUSD -0.2%, NZDUSD ~flat, USDCHF -0.05%, USDCAD ~flat, USDSEK -0.1%, USDNOK -0.5%.

Spot Bitcoin +0.9%, Spot Ethereum +1.4%.  A weekend hack triggered a crisis of confidence among crypto investors, with users pulling billions from DeFi’s biggest
lending platform.

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
• Air Products (APD) Raised to Buy at Berenberg; PT $350
• American Electric Power (AEP) US Raised to Buy at Seaport Global Securities; PT $145
• Arcos Dorados (ARCO) Raised to Outperform at Grupo Santander; PT $14
• Biogen (BIIB) Raised to Overweight at Wells Fargo; PT $250
• Celldex (CLDX) Raised to Overweight at Barclays; PT $45
• Ecolab (ECL) Raised to Buy at Deutsche Bank; PT $325
• JPMorgan (JPM) Raised to Accumulate at Phillip Secs; PT $335(Earlier)
• Lakeland Industries (LAKE) Raised to Buy at DA Davidson; PT $14
• Melco Resorts (MLCO) ADRs Raised to Outperform at CICC; PT $8.20
• Okta (OKTA) Raised to Overweight at Barclays
• Oscar Health (OSCR) Raised to Hold at Jefferies; PT $16
• Plexus (PLXS) Raised to Buy at Stifel; PT $250
• TC Energy (TRP CN) Raised to Neutral at Goldman; PT C$84.74
• Texas Instruments (TXN) Raised to Hold at Aletheia Capital; PT $220
• Ulta Beauty (ULTA) Raised to Buy at Jefferies; PT $700
• WaterBridge Infrastructure (WBI) Raised to Buy at Goldman; PT $32
• Wells Fargo (WFC) Raised to Buy at Phillip Secs; PT $98(Earlier)
• Williams Cos (WMB) Raised to Buy at Goldman; PT $82
• Downgrades
• Avis Budget (CAR) Cut to Underweight at Barclays; PT $150
• Centessa Pharmaceuticals (CNTA) ADRs Cut to Equal-Weight at Wells Fargo
• Doximity (DOCS) Cut to Hold at Truist Secs; PT $29
• Edison International (EIX) Cut to Neutral at Seaport Global Securities
• Entergy (ETR) Cut to Neutral at Seaport Global Securities
• Eversource (ES) Cut to Neutral at Seaport Global Securities
• Exelon (EXC) Cut to Hold at Jefferies; PT $50
• Gitlab (GTLB) Cut to Sector Perform at RBC; PT $25
• Hess Midstream (HESM) Cut to Sell at Goldman; PT $32
• Intel (INTC) Cut to Neutral at KGI Securities; PT $71
• Janux Therapeutics (JANX) Cut to Underweight at Barclays; PT $14
• Lionsgate Studios (LION) Cut to Neutral at Citi; PT $12.60
• Mohawk Industries (MHK) Cut to Neutral at BofA; PT $122
• NXP Semi (NXPI) Cut to Equal-Weight at Wells Fargo; PT $235
• Qorvo (QRVO) Cut to Underperform at Mizuho Securities; PT $66
• Sanofi (SAN FP) ADRs Cut to Neutral at BNP Paribas; PT $50
• Schneider National (SNDR) Cut to Market Perform at Raymond James
• Skyworks (SWKS) Cut to Underperform at Mizuho Securities; PT $46
• Southern Co (SO) Cut to Neutral at Seaport Global Securities
• Tvardi Therapeutics (TVRD) Cut to Underweight at Barclays; PT $3
• Vale (VALE3 BZ) ADRs Cut to Equal-Weight at Barclays; PT $17
• Westlake Corp (WLK) Cut to Hold at Deutsche Bank; PT $120
• Initiations
• Cameco (CCO CN) Rated New Outperform at William Blair
• Candel Therapeutics (CADL) Rated New Overweight at Cantor
• Healthcare Realty Trust (HR) Rated New Neutral at UBS; PT $18
• Healthpeak Properties (DOC) Rated New Neutral at UBS; PT $17
• Kyndryl (KD) Rated New Market Perform at BMO; PT $15
• MKS Inc. (MKSI) Reinstated Buy at William O’Neil
• MP Materials (MP) Rated New Outperform at Wedbush; PT $90
• OptimumBank (OPHC) Rated New Buy at Janney Montgomery; PT $8
• Primis Financial Corp (FRST) Rated New Outperform at KBW; PT $17
• Sensei Bio (SNSE) Rated New Outperform at Leerink; PT $50
• Serve Robotics (SERV) Rated New Buy at Guggenheim; PT $13
• South Bow (SOBO CN) Rated New Sell at Goldman; PT C$40
• TelyRx Holdings (TELY CN) Rated New Speculative Buy at Canaccord; PT C$6
• Thor Industries (THO) Rated New Neutral at Seaport Global Securities
• USA Rare Earth (USAR) Rated New Outperform at Wedbush; PT $29
• Voya Financial (VOYA) Rated New Buy at TD Cowen; PT $100
• Whirlpool (WHR) Rated New Neutral at Mizuho Securities; PT $55

Data sources: Bloomberg, Reuters, CQG

David Wienke