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; 9:00ET FHFA House Price Index; 10:00ET Consumer Confidence;
Richmond Fed Manufact. Index; 10:30ET Dallas Fed Services Activity; 1:00ET 7-Year Note Auction

Highlights and News:  

• US SET TO ANNOUNCE “HISTORIC’ PIPELINE AGREEMENTS TODAY: WRIGHT
• Trump discusses Iran proposal with aides, will address proposal ‘soon’
• UAE DECIDES TO EXIT OPEC AND OPEC+ STARTING MAY 1
• OpenAI Misses Its Own User and Sales Goals, WSJ 
• South Korea surpassed the UK to become the world’s eighth-largest stock market
• Strait of Hormuz completely packed with stranded tankers
• BOJ left its benchmark steady at 0.75% in a split vote

Global stocks held steady while oil prices rose, as investors weighed the ongoing stalemate in the Iran conflict. Trump convened his national security team to discuss
Iran’s proposal but maintained “red lines” on any deal to end the war. The White House is expected to deliver its formal response and counterproposals in the coming days, according to the Wall Street Journal, citing US officials. Iranian media said Foreign
Minister Abbas Araghchi would convey that the conflict could end if the US lifts its naval blockade, agrees to a new legal framework for traffic transiting the strait and guarantees there will be no future military action against Iran. The Bank of Japan left
its benchmark interest rate unchanged at 0.75% in a split 6-3 vote, increasing the likelihood of a hike in June. The BOJ also raised its core inflation forecast by more than expected, stoking expectations of further interest rate hikes. Euro-area consumers’
inflation expectations jumped in March, with prices seen rising 4% over the next 12 months from 2.5%, the ECB’s monthly survey showed. Spain’s unemployment rate climbed to 10.8% in the first quarter, its biggest increase since the Covid pandemic.

EQUITIES: 

US equity futures are mostly lower, with Nasdaq underperforming after a report that OpenAI missed its internal targets for user growth and revenue, putting traders on edge ahead of Wednesday’s
big day of hyperscaler results. OpenAI failed to meet its goals for sales and new users, fueling internal concerns that it may struggle to support its spending on AI infrastructure, the WSJ reported. OpenAI partners including Oracle, CoreWeave and AMD fell
in premarket trading, while SoftBank tumbled 10% in Japan. The White House said US officials were discussing Iran’s latest proposal but maintained “red lines” on any deal, including preventing Tehran from obtaining a nuclear weapon. Secretary of State Marco
Rubio told Fox News that Iran’s offer to end the war was “better than expected,” but the White House has doubts about whether the person who submitted it had the authority to do so — echoing US concerns that Iran’s leadership is divided.

Futures ahead of the bell: E-Mini S&P -0.65%, Nasdaq -1.25%, Russell 2000 -0.9%, DJI +0.25%

In pre-market trading, OpenAI partners such as CoreWeave (CRWV -7%) and Oracle (ORCL -7%) are falling after the Wall Street Journal reported that the AI startup recently
failed to meet targets for sales and new users, reviving worries about spending ahead of tech earnings. Celestica (CLS) falls 13% after the maker of electronic components reported first-quarter results that featured smaller upside to expectations than in recent
quarters. Dynatrace (DT) gains 4% on a report that Starboard Value LP took a stake and is pushing the company to better capitalize on the shift to artificial intelligence. Erasca (ERAS) slides 40% after the biotech said one patient withdrew from the trial
after a severe treatment-related adverse event and later died. General Motors (GM) rises 4% after raising its profit outlook for the year by $500 million. LendingClub (LC) rises 9% after the online lender’s first-quarter revenue and net interest income beat
estimates. Rambus (RMBS) plunges 17% after the semiconductor device manufacturer reported first-quarter results that were largely in line with expectations. Sanmina (SANM) rises 7% after the electronics contract manufacturing services company’s second-quarter
results beat expectations. Solaris Energy (SEI) rallies 5% after the firm’s first-quarter Ebitda beat the average analyst estimate. Spotify Technology falls 11% after reporting results that underwhelmed.
Coca-Cola Co.’s focus on smaller sizes is paying off with cash-strapped consumers as the world’s largest beverage maker boosted sales last quarter more than
expected. Shares of Coca-Cola (KO) rose as much as 3.5%.
Omnicell (OMCL) shares jump 20%  after the company which helps hospitals and pharmacies automate their medication management, boosted its adjusted earnings per
share guidance for the full year.

European gauges reverse small gains to trade lower on a busy earnings day. Healthcare sector weighs after Novartis missed profit estimates and reported its first sales
decline in almost two years. SIG Group shares gain as much as 12% as the Swiss maker of carton packaging posted stronger-than-expected profits. BP shares rise over 3% after 1Q profit beat analyst estimates, led by a surge in profits from its oil trading operation.
Nexans shares surged as much as 9.6% to a record high after the French cable and electrification specialist strengthened its US presence with the acquisition of Republic Wire. Nordic Semiconductor gains as much as 9.1% after the Norwegian chipmaker reported
its latest earnings. Barclays shares fell as much as 4.3% after the British lender took an extra £105 million provision for mis-sold car loans. Telenor shares fall as much as 10% after the telecom reduced Ebitda growth targets for its core Nordic markets. 
Stoxx 600 -0.5%, DAX -0.5%, CAC -0.3%, FTSE 100 ~flat. Technology -1.7%, Healthcare -1.5%, Chemicals -1.4%, Basic Resources -1.2%. Energy +1.2%, Food & Bev +0.7%, Banks +0.6%.

Shares in Asia traded mixed to lower but continued to hold near a February peak as traders awaited earnings from key companies in the global technology sector. The
MSCI Asia Pacific Index fluctuated before falling 0.4%, dragged by information technology firms. Nikkei fell about 1% while Topix remained well in the green after three BOJ dissenters vote for a rate hike. Kospi extends its record rally as South Korea overtakes
UK to become world’s eighth-largest stock market. With catalysts lacking amid slow progress toward new US-Iran talks, investors are fixated on reports due Wednesday from companies including Alphabet and Meta Platforms. Among the region’s tech firms that rely
on outlays from the global hyperscalers, Advantest saw its stock slide today on a weak outlook and an indication of capacity constraints. Its fellow Japanese chip-equipment maker Tokyo Electron is among Asian firms reporting later this week, along with Chinese
EV maker BYD. Nikkei 225 -1%, Hang Seng Index -0.95%, ASX 200 -0.6%, Philippines -0.6%, Sensex -0.5%, Indonesia -0.5%, CSI 300 -0.3%, Taiwan -0.25%, Singapore -0.1%. Kospi +0.4%, Topix +1%, Vietnam +1.2%.

FIXED INCOME: 
 

Treasury yields push higher for a second day as oil prices jump. US session includes 7-year note auction, the week’s third and final coupon auction following small
tails for Monday’s 2- and 5-year note sales. Treasury front-end yields are higher by ~4bps, 10-year is 2.5bp higher near 4.365%. 2s10s -2bp, 5s30s -2.5bps. IG dollar issuance slate includes a couple of deals so far. More than $24 billion was priced Monday
by 12 borrowers, which paid about 1bp in new issue concessions on deals that were 4.4 times oversubscribed.

METALS: 

Gold slipped to a three-week low ‌as oil prices rise, as investors weighed inflation risks and interest-rate concerns ahead of a slew of central bank decisions. Spot
gold falls more than 2% below $4,600 an ounce while spot silver nears $72 an ounce. The Fed is also widely expected to hold interest rates steady at the end of
⁠its two-day meeting on Wednesday. Spot gold -2.3%, Silver -4%, Copper futures -2.2%. 

ENERGY:   

Crude oil prices rose to a three-week high with June Brent above $112 a barrel and the more active July contract above $105. Traders awaited the US response to a
proposal from Tehran to end the war and reopen the Strait of Hormuz. There’s not much sign of progress toward ending the war, with Trump planning to address the matter “very soon.” The president has told his advisers he’s not satisfied with Iran’s latest suggestions,
the NYT reported. A laden Japan-linked supertanker appears to sailing through the Strait of Hormuz, in what may be the first attempt by an oil carrier from the country to leave the Persian Gulf since the Iran war began. ADNOC has notified some term customers
of available oil cargoes for loading at Fujairah, outside the Persian Gulf, as producers seek alternative export routes to market. Iran is rapidly running out of crude storage capacity, threatening to force accelerated production cuts in what was once OPEC’s
second-largest producer, according to research firm Kpler. WTI +5.2%, Brent +3.7%, US Nat Gas +0.2%, RBOB +2%.

CURRENCIES: 

In currency markets, the dollar strengthens against all G-10 majors as investors focused on upcoming central bank policy decisions and guidance, with the Iran war
continuing to loom large. The yen briefly strengthened after the policy decision before trimming its gains following Governor Ueda’s comments, with traders now pricing in a 66% chance of a rate hike at the BOJ’s next policy meeting on June 16. “The certainty
of meeting our baseline outlook has declined quite significantly this time,” Ueda said. The 6-3 vote marked the widest split under Governor Ueda’s leadership, highlighting growing pressure on the BOJ to normalize policy. The BOJ also sharply revised up its
core inflation forecasts for the fiscal years ending March 2027 and March 2028. US$ Index +0.25%, GBPUSD -0.4%, EURUSD -0.25%, USDJPY +0.2%, AUDUSD -0.4%, NZDUSD -0.6%, USDCHF +0.55%, USDCAD +0.3%, USDSEK +0.7%, USDNOK +0.2%.

Spot Bitcoin -0.9%, Spot Ethereum -0.7%. 

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
• BP (BP/ LN) ADRs Raised to Overweight at Morgan Stanley; PT $49.40
• Equinor (EQNR NO) ADRs Raised to Equal-Weight at Morgan Stanley; PT $40.40
• IBM (IBM) Raised to Hold at HSBC; PT $231
• Old Dominion (ODFL) Raised to Neutral at Baird; PT $229
• Organon (OGN) Raised to Neutral at Piper Sandler; PT $14
• Telus (T CN) Raised to Buy at TD Cowen
• Downgrades
• ARC Resources (ARX CN) Cut to Market Perform at BMO; PT C$32
• Cut to Sector Perform at Peters & Co; PT C$33
• Compass Therapeutics (CMPX) Cut to Market Perform at Raymond James
• Goeasy (GSY CN) Cut to Sector Perform at Scotiabank; PT C$39
• Nucor (NUE) Cut to Neutral at UBS; PT $224
• Obsidian Energy Ltd (OBE CN) Cut to Sector Underperform at Peters & Co
• Propel Holdings (PRL CN) Cut to Sector Perform at Scotiabank; PT C$27
• Rambus (RMBS) Cut to Neutral at Baird; PT $120
• Trisura (TSU CN) Cut to Sector Perform at Scotiabank; PT C$52
• Tronox (TROX) Cut to Sell at Truist Secs; PT $8
• Initiations
• American Homes (AMH) Rated New Buy at Compass Point; PT $37.50
• Barings BDC (BBDC) Rated New Neutral at Lucid Capital Markets; PT $9.25
• Cardinal Health (CAH) Rated New Outperform at William Blair
• Carlisle (CSL) Rated New Outperform at Raymond James; PT $425
• Cencora (COR) Rated New Market Perform at William Blair
• First Tracks Biotherapeutics (TRAX) Rated New Buy at HC Wainwright
• Immatics (IMTX) Rated New Buy at TD Cowen
• Invitation Homes (INVH) Rated New Neutral at Compass Point; PT $30
• Lineage Cell Therapeutics (LCTX) Rated New Buy at Canaccord; PT $9
• McKesson (MCK) Rated New Outperform at William Blair
• Micron (MU) Rated New Buy at DA Davidson; PT $1,000
• Neurogene Inc (NGNE) Rated New Buy at Guggenheim; PT $69
• Opus Genetics Inc (IRD) Rated New Market Outperform at Citizens
• Satellos Bioscience Inc (MSCL CN) Rated New Buy at Guggenheim; PT C$31.43
• Tiernan Gold (TNGD CN) Rated New Speculative Buy at Canaccord; PT C$32.75
• Ultrapar (UGPA3 BZ) ADRs Rated New Buy at UBS; PT $7
• Versigent (VGNT) Rated New Outperform at BNP Paribas; PT $41
• WEX (WEX) Rated New Buy at Loop Capital; PT $195

Data sources: Bloomberg, Reuters, CQG

David Wienke