Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET ADP Employment Change; 8:30ET US Treasury Quarterly Refunding Announcement; 9:30ET
Fed’s Musalem speaks; 1:00ET Fed’s Goolsbee speaks

Highlights and News:  

• US and Iran closing in on one-page memo to end war, officials say –
  Axios
• US Proposal: Iran to Start Reopening Hormuz, US Lifts Blockade, Full Nuclear Deal Negotiated Later
• Oil Extends Decline as Trump Says ‘Great Progress’ in Iran Talks
• IRGC NAVY SAYS SAFE PASSAGE VIA HORMUZ WILL BE ENSURED:PRESS TV
• GLOBAL GOVERNMENT BONDS EXTEND GAINS ON AXIOS US-IRAN REPORT
• CHINA WELCOMES IRAN’S PLEDGE NOT TO SEEK NUCLEAR WEAPONS
• US Expects Iranian Response in the Next 48 Hours
  
• Trump: If Iran agrees to the proposal, the operation will end. If not, the bombings will begin
  
• Pakistani sources: the two sides are closer to embarking on a negotiation process that may take months

Global stock markets rallied sharply, with many markets hitting record highs. Technology and AI-related shares lead the charge, while oil prices retreated and bond
yields eased after an Axios report that the White House believes it’s getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations. AI/tech rally continues as a
major driver, with memory chips and related stocks surging. While negotiations remain delicate and a full deal is not yet finalized, today’s price action shows how quickly markets are pricing in a potential resolution. The IRGC Navy Command announced on X
that, with the end of the aggressors’ threats and under new procedures, safe and sustainable passage through the strait will now be possible. Mohammad Marandi, a media associate accompanying the Islamic Republic’s negotiating delegation in Pakistan, reacted
to the Axios report by writing on X: “Axios is a tool for market manipulation by the White House. The Islamic Republic is fully prepared for a potential major attack ahead of Trump’s trip to China.”

EQUITIES: 

US equity futures jumped, building on Tuesday’s record closes for the S&P 500 and Nasdaq, as investors cheered President Trump’s comments about “great progress” on a final agreement with
Tehran and his decision to pause the “Project Freedom” ship-escort operation in the Strait of Hormuz. Strong earnings and deal flow in semiconductors, data centers, and related sectors continued to fuel gains, with names like AMD and memory-chip stocks standing
out. Trump later posted that if Iran does not agree to a deal “the bombing starts” and it will be “much higher level and intensity than it was before.” Advanced Micro Devices soared 18% in premarket trading after data center spending bolstered its sales forecast.
Super Micro Computer Inc. jumped 17% as improved margins lifted the firm’s earnings. SpaceX proposed spending $55 billion to start building a semiconductor production facility in Texas. Alphabet raised $17 billion to fund AI outlays.

Futures ahead of the bell: E-Mini S&P +0.7%, Nasdaq +1.2%, Russell 2000 +1.3%, DJI +0.9%

In pre-market trading, miners, cruise operators, and airlines rose, while energy and fertilizer stocks declined. Semiconductor, power equipment, and data center stocks
rallied sharply after strong results and outlooks from Advanced Micro Devices and Super Micro Computer, signaling robust end-to-end AI demand. Advanced Micro Devices (AMD) rallies 19% after the chipmaker gave an outlook that is stronger than expected, a sign
of robust AI-related demand. Alphatec Holdings (ATEC) sinks 16% after the medical device company posted sales for the first quarter that disappointed. Apollo Global (APO) rises 3% after the alternative asset manager eclipsed $1 trillion of assets under management
on record first-quarter inflows and reported earnings that beat Wall Street estimates. Compass Inc. (COMP) gains 31% after the real estate brokerage platform reported first-quarter revenue that beat average analyst estimates. CVS Health (CVS) rises 5% after
the health insurer boosted its adjusted earnings per share guidance for the full year. Geo Group (GEO) gains 11% after the private correctional facilities company boosted its adjusted Ebitda guidance for the full year. Klaviyo (KVYO) falls 18% after announcing
Amanda Whalen will step down from her role as CFO. The application software company reported first-quarter results that beat expectations and the outlook was raised on key metrics. Kraft Heinz Co. (KHC) rises 2% after reporting quarterly sales that beat Wall
Street expectations. Super Micro Computer Inc. (SMCI) leaps 13% after the company reported improved margins and gave a profit forecast that suggested it’s controlling the costs of getting powerful AI servers into customers’ hands. TransMedics (TMDX) falls
21% after the medical equipment firm reported adjusted earnings per share that fell short of expectations. Uber Technologies (UBER) gains 9% after providing a better-than-expected forecast for bookings. Veracyte (VCYT) rises 14% after the diagnostics firm
reported revenue for the first quarter that beat.

Based on the request of Pakistan and other Countries, the tremendous Military Success that we have had during the Campaign against the Country of Iran and, additionally,
the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran, we have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait
of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed. President DONALD J. TRUMP

1/ We express our thanks to the captains and owners of ships stationed in the Persian Gulf and the Sea of Oman for their cooperation in transiting through the Strait
of Hormuz in accordance with Iranian regulations and for the desirable participation of vessels in the regional maritime security.

European gauges are sharply higher as investors grow optimistic that the US and Iran will reach a deal. Travel and automobile shares are leading gains, while energy,
utilities and fertilizer stocks decline. Travel stocks outperformed, led by airlines, with Air France-KLM rising 8.0% and Ryanair Holdings Plc up 10.2%. Other gainers include Novo Nordisk A/S, rising as much as 7.2% after reporting strong sales of Wegovy.
Auto shares also soared as BMW AG jumped 8.3% before paring some of its gains. The energy sector was the biggest laggard as oil and gas markets plummeted. The region’s stocks remain below record highs notched earlier this year. Bayer agreed to buy eye-medicines
maker Perfuse Therapeutics in a deal that may be worth as much as $2.5 billion. Stoxx 600 +2.2%, DAX +2.2%, CAC +2.9%, FTSE 100 +2.2%. Travel & Leisure +5.5%, Defense +4.7%, Autos +4.7%. Energy -2.9%.  

Shares in Asia surged, led by technology and semiconductor stocks, after a string of positive company forecasts reinforced confidence in sustained artificial intelligence-driven
growth. The MSCI Asia Pacific Index gained 2.3% to a record high, with Samsung Electronics, SK Hynix and MediaTek providing the biggest boosts. The Kospi outperformed, hitting another record high as
Samsung jumped 16%, joining the $1 trillion valuation club after its shares more than quadrupled over the past year.  The optimism comes after AMD, the leading challenger to Nvidia in AI computing chips, bolstered its sales forecast, while Super Micro
Computer reported improved margins and provided upbeat guidance on strong AI demand. Chinese stocks posted gains after the market reopened after a five-day holiday. Sentiment was also lifted by improvement in a private gauge of services activities in April.
Kospi +6.5%, Thailand +1.8%, CSI 3000 +1.5%, ASX 200 +1.3%, Sensex +1.2%, Hang Seng Index +1.2%, Philippines +1.2%, Taiwan +0.9%, Vietnam +0.9%, Indonesia +0.5%. Japan was closed for a holiday.

FIXED INCOME: 
 

Treasury yields pulled back sharply, reflecting lower inflation fears from softer oil and expectations of a more stable economic backdrop. Axios reported that Washington
and Tehran are working on a memorandum that would set a framework for further nuclear talks, with nothing agreed upon yet. Subsequent reports indicated Iran is evaluating a new US proposal to end the war. 10-year yield is down ~7bps at 4.35%: 2s10s is flat
while 5s30s is steeper by 3bps. Treasury quarterly refunding announcement at 8:30am, with consensus expectation for unchanged coupon auction sizes.

METALS: 

Gold and silver posted their strongest daily gains in roughly a month, surging as optimism grew that the US and Iran are closing in on a deal to end the Middle East
conflict, which pushed oil prices and the dollar lower. Bullion climbed as much as 3.3% to exceed $4,700 an ounce, while silver gained as much as 6.3%. Central banks bought 244 tons of gold in Q1 2026. That’s 36 tons above the 5-year average, which is double
what it was a decade ago. Spot gold +2.8%, Silver +5.2%, Copper futures +3%. 

ENERGY:   

Crude oil prices plunged amid growing optimism that the US and Iran are making meaningful progress toward a peace deal. Trump said in a Truth Social post the US would
pause an effort to escort ships through the Strait of Hormuz to see if a deal can be reached with Iran. Trump later threatened Iran with more bombing if it doesn’t accept the deal. July Brent dropped nearly 12% to below $97 a barrel, before paring losses to
near $102, while WTI traded near $94. China’s foreign minister called for a comprehensive ceasefire in the Iran war, saying his country was “deeply distressed” by the conflict. China’s close economic and political ties to Tehran give it a unique position of
influence. The Trump administration is pressing China to use that relationship to urge the Islamic Republic to open the Strait of Hormuz. WTI -7.8%, Brent -6.6%, US Nat Gas -2%, RBOB -4.8%.

CURRENCIES: 

In currency markets, the dollar hit the lowest level since February, reflecting investor hopes about a possible deal to end the war. Expectations of a Fed hike by
year-end have been fully unwound. Yen is near the top of the G-10 leaderboard, touching its highest level against the dollar in more than two months, spurring speculation that officials may have intervened again. It rose as much as 1.8% to 155.03 per dollar,
before paring the move to trade around 156. Sterling bears will probably get a short-term window this week as political noise is set to return as a prime driver of the pound. A poor showing by the Labour Party in local elections will pile further pressure
on PM Keir Starmer. US$ Index -0.6%, GBPUSD +0.6%, EURUSD +0.6%, USDJPY -1%, AUDUSD +0.8%, NZDUSD +1.3%, USDCHF -0.5%, USDCAD -0.1%, USDSEK -0.6%, USDNOK +0.15%.

Spot Bitcoin +0.7%, Spot Ethereum +0.9%. MORGAN STANLEY DEBUTS CRYPTO TRADING, UNDERCUTS RIVALS ON PRICE

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
• AMC Entertainment (AMC) Raised to Buy at Benchmark; PT $2.50
• AMD (AMD) Raised to Outperform at Bernstein; PT $525
• Raised to Buy at Goldman; PT $450
• American Eagle (AEO) Raised to Equal-Weight at Barclays; PT $19
• Arthur J Gallagher (AJG) Raised to Buy at Citi; PT $250
• Ashland (ASH) Raised to Buy at Seaport Global Securities; PT $75
• Ballard Power Systems (BLDP CN) Raised to Buy at Lake Street; PT C$6.81
• Brown & Brown (BRO) Raised to Buy at Citi; PT $70
• DaVita (DVA) Raised to Buy at Deutsche Bank; PT $220
• Deckers Outdoor (DECK) Raised to Market Perform at Bernstein; PT $100
• Franklin Resources (BEN) Raised to Equal-Weight at Morgan Stanley
• GlobalFoundries (GFS) Raised to Positive at Susquehanna; PT $100
• Grab Holdings (GRAB) Raised to Buy at China Renaissance; PT $5
• LCI Industries (LCII) Raised to Buy at Roth Capital Partners; PT $164
• Marsh McLennan (MRSH) Raised to Buy at Citi; PT $200
• Monster Beverage (MNST) Raised to Buy at Rothschild & Co Redburn
• PayPal (PYPL) Raised to Outperform at Daiwa
• Sphere Entertainment (SPHR) Raised to Buy at Benchmark; PT $155
• United Fire (UFCS) Raised to Overweight at Piper Sandler; PT $45
• VF Corp (VFC) Raised to Buy at BTIG; PT $23
• Vivid Seats (SEAT) Raised to Neutral at BofA; PT $7.25
• Wells Fargo (WFC) Raised to Buy at Phillip Secs; PT $98
• Willis Towers (WTW) Raised to Buy at Citi; PT $300
• Downgrades
• Abercrombie & Fitch (ANF) Cut to Underweight at Barclays; PT $76
• AGI (AGBK) Cut to Market Perform at Itau BBA; PT $9
• BellRing Brands (BRBR) Cut to Market Perform at Bernstein; PT $11
• Cut to Equal-Weight at Morgan Stanley; PT $13
• Coupang (CPNG) Cut to Neutral at Citi; PT $22.20
• Embecta (EMBC) Cut to Neutral at BTIG
• Enovix (ENVX) Cut to Underweight at JPMorgan
• iA Financial (IAG CN) Cut to Hold at TD Cowen; PT C$190
• IAC Inc. (IAC) Cut to Hold at Jefferies; PT $44
• Lucid (LCID) Cut to Hold at Benchmark
• Norwegian Cruise (NCLH) Cut to Neutral at Northcoast
• Puig (PUIG SM) ADRs Cut to Neutral at BNP Paribas; PT $10.80
• Reddit (RDDT) Cut to Accumulate at Phillip Secs; PT $200
• TopBuild (BLD) Cut to Hold at Loop Capital; PT $485
• Cut to Neutral at DA Davidson; PT $437
• Towne Bank (TOWN) Cut to Market Perform at KBW; PT $38
• TransMedics (TMDX) Cut to Market Perform at Oppenheimer
• Valley National (VLY) Cut to Equal-Weight at Morgan Stanley; PT $15
• Volaris (VOLARA MM) ADRs Cut to Hold at HSBC; PT $7.50
• Westlake Corp (WLK) Cut to Underweight at JPMorgan; PT $90
• Initiations
• Blossom Gold (BGAU CN) Rated New Speculative Buy at Canaccord; PT C$3.60
• Celsius Holdings (CELH) Rated New Neutral at Rothschild & Co Redburn
• Dakota Gold (DC) Rated New Outperform at CIBC; PT $11
• Eton Pharmaceuticals (ETON) Rated New Buy at Singular Research
• F&G Annuities & Life (FG) Rated New Market Perform at Raymond James
• Fuerte Metals (FMT CN) Rated New Outperform at CIBC; PT C$16
• Kymera (KYMR) Rated New Buy at Canaccord; PT $106
• Meridian Mining (MNO CN) Rated New Outperform at CIBC; PT C$3.25
• Thesis Gold & Silver Inc (TAU CN) Rated New Outperform at CIBC; PT C$6
• Tokio Marine (8766 JP) ADRs Rated New Buy at Berenberg; PT $57.70
• Wajax (WJX CN) Rated New Hold at TD Cowen; PT C$33

Data sources: Bloomberg, Reuters, CQG

David Wienke