Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Unemployment Report, Hourly Earnings,
Canada Unemployment Rate; 10:00ET U. of Mich. Sentiment-Inflation Expectations, Wholesale Inventories; 11:05ET Fed’s Goolsbee speaks; 2:20ET Fed’s Goolsbee speaks

Highlights and News:  

• Trump says ceasefire still holds after fighting between the US and Iran flares
• Iran Reportedly Seized Tanker After Clash With US Near Hormuz
• US says three destroyers attacked, no damage
• RUBIO ON IRAN RESPONSE: WE SHOULD HEAR SOMETHING TODAY
• ZELENSKIY: PEACE TALKS IN US WERE SUBSTANTIVE
• US Said to Suspect Thai Link to Nvidia Smuggling
• US APRIL NONFARM PAYROLLS RISE 115,000 M/M; EST. +65K

Global stock markets show mixed performance with a cautious tone after yesterday’s US declines as fresh clashes between US and Iranian forces in the Strait of Hormuz
have reignited geopolitical tensions. The US and Iran clashed overnight near the Strait of Hormuz, with US forces targeting missile and drone launch sites and other military assets in Iran. The Iranian army seized an oil tanker for “attempting to disrupt oil
exports and the interests of the Iranian nation,” the semi-official Tasnim news agency reported. The UAE said air-defense systems were intercepting missiles and drones, according to a post on X. The very large US Airforce airlift operation bringing more troops,
ammunition and equipment to the Middle East continued yesterday at high intensity despite talks of peace and negotiations. Meanwhile, Iran is expanding rail trade with China in an effort to offset the impact of a US blockade on its ports and to withstand economic
pressure aimed at crippling its economy.

EQUITIES: 

US equity futures advance as oil steadies while investors wait for the monthly jobs report. S&P and Nasdaq indices look set to test new highs as Trump’s assertion that the Iran ceasefire
is still holding and a deep weekly loss for oil help futures regain positive momentum. AI-related layoffs dominated the jobs narrative ahead of the employment report. Block reported a brighter profit outlook after painful AI-driven cuts, while Cloudflare plans
to reduce its workforce by 20%, Upwork by 24%, and Fidelity overhauls its tech and product teams to accelerate AI adoption. In AI-related developments, TSMC reported its slowest monthly revenue growth since October, CoreWeave issued a disappointing forecast
for the current quarter, and a key company involved in Thailand’s national AI program is suspected of smuggling billions of dollars’ worth of Super Micro servers containing advanced Nvidia chips to China — with Alibaba among the recipients.

Futures ahead of the bell: E-Mini S&P +0.55%, Nasdaq +0.8%, Russell 2000 +0.7%, DJI +0.4%

In pre-market trading

• Notable Winners
• Akamai (AKAM) +25%
  Strongest mover after announcing a major $1.8 billion, 7-year deal with a leading frontier AI model provider for cloud infrastructure, combined with solid Q1 results and guidance.
• Innodata (INOD) +39%
  Surged on a significant upward revision to its full-year revenue forecast.
• Fluence Energy (FLNC) +23%
  Jumped after Roth analyst upgraded to Buy, citing strong order momentum.
• JFrog (FROG) +14%
  Rose on a solid Q1 beat and conservative outlook; investors highlighted accelerating cloud revenue growth.
• nLight (LASR) +13%
  Gained after beating Q1 earnings expectations.
• Block (XYZ) +7%, Monster Beverage (MNST) +7%, Rocket Lab (RKLB) +7%, Wendy’s (WEN) +4%
  All rose on earnings beats and/or raised guidance/price targets.
• Notable Losers
• Forward Air (FWRD) -45%
  Plunged after the company revealed it received no actionable sale proposals, dashing hopes of a takeover.
• Trade Desk (TTD) -12%
  Dropped after missing Q1 earnings expectations.
• Expedia (EXPE) -7%
  Fell on soft Q2 gross bookings guidance, with analysts citing macroeconomic pressure on consumer travel spending.

Three World Class American Destroyers just transited, very successfully, out of the Strait of Hormuz, under fire. There was no damage done to the three Destroyers,
but great damage done to the Iranian attackers. They were completely destroyed along with numerous small boats, which are being used to take the place of their fully decapitated Navy. These boats went to the bottom of the Sea, quickly and efficiently. Missiles
were shot at our Destroyers and were easily knocked down. Likewise, drones came and were incinerated while in the air. They dropped ever so beautifully down to the Ocean, very much like a butterfly dropping to its grave!……

European gauges are lower, with almost all sectors in the red, led by insurance, banks and travel stocks. FTSE 100 lifts off early lows as JD Sports gained for a third
straight day. IAG fell pares early loss of nearly 6% after British Airways’ owner warned that higher fuel costs from the war would weigh on profit.  Swiss Life dragged insurers lower following a rating downgrade. On the upside, Brembo +8.5% on strong Q1 results,
Bechtle +6.9% on continued momentum following its first-quarter results, Ferrovial +3.6% after a Q1 beat, and Pirelli +3.4% on in-line results and raised guidance. On the downside, Intertek -7.9% after rejecting EQT’s £58/share bid, Rheinmetall -2.7% on a
JPMorgan downgrade and ~30% price target cut, Lufthansa -2.7% on a Barclays downgrade, and Commerzbank -2.4% after earnings as it steps up its defense against UniCredit’s hostile takeover. Stoxx 600 -0.6%, DAX -1%, CAC -0.8%, FTSE 100 -0.2%. Defense -2.2%,
Insurance -1.5%, Banks -1.1%, Travel & Leisure -1.1%. Media +0.1%.

Shares in Asia fell to trim weekly gains as renewed tensions in the Middle East weighed on sentiment. The MSCI Asia Pacific Index dropped 0.9%, following a two-day
rally as investors took some profit ahead of Iran’s response to a US peace proposal. Still, the index has risen more than 5% for the week and was poised for its longest winning streak since January, driven largely by a sustained tech rally. The MSCI AC Asia
Pacific Information Technology Index has surged over 13%, its best week since late 2022. Regional markets showed renewed risk-off sentiment after the US struck Iranian military targets in retaliation for attacks on three American Navy destroyers in the Strait
of Hormuz. Chinese stocks linked to robotics surged as optimism grows over the sector’s longer-term outlook. Indonesia -2.9%, ASX 200 -1.5%, Philippines -1.2%, Hang Seng Index -0.9%, Taiwan -0.8%, Sensex -0.7%, CSI 300 -0.6%, Thailand -0.5%, Singapore -0.4%,
Topix -0.3%. Kospi +0.1%, Vietnam +0.3%

FIXED INCOME: 
 

Treasuries hold small gains ahead of the jobs data, led by front-end and belly sectors as oil prices stabilize. US yields richer by 1bp-2bp in belly of the curve
with 5s30s spread steeper by about 1bp; 10-year near 4.37% is down 1bp. 2s10s -1bp. April jobs report expected to show 65k increase in nonfarm payrolls following 178k in March.

METALS: 

Gold ticked up and is heading for a positive week, supported by growing optimism around a possible US–Iran peace deal, which has helped temper fears of persistently
high inflation leading to higher-for-longer interest rates. Spot gold rises to near $4,710 and silver jumps to around $80.50 an ounce. Nonfarm payrolls are forecast to have increased by 62,000 last month after rebounding by 178,000 in March, a Reuters survey
of economists showed. Spot gold +0.5%, Silver %, Copper futures %. 

ENERGY:   

Oil fluctuated while the Trump administration pushed for a peace deal with Iran. Trump said a ceasefire with Iran still held despite renewed clashes between US and
Iranian forces. Recent exchanges of fire—including US strikes on Iranian military targets and an oil tanker, alongside Iranian attacks on US naval vessels—have heightened fears of escalation. Brent failed to hold early gains of ~3%, trading slightly firmer
above $100 a barrel and set for a weekly drop of more than 7%. US forces hit military targets in Iran after the country fired on three destroyers in the Strait of Hormuz, US Central Command said. Still, the command added that it “does not seek escalation.”
Before the clashes near Hormuz were announced, Iran said the US had targeted two of its oil tankers in the area, according to Press TV. It also accused the US of striking civilian areas along its southern coast and on Qeshm Island “with the cooperation of
some regional countries.”  Abu Dhabi National Oil Co. has kept a trickle of liquefied natural gas exports moving through the Strait of Hormuz by concealing tanker locations. Ukraine conducted heavy overnight drone attacks on Russia, giving no indication that
Kyiv is ready to observe Moscow’s self-declared ceasefire. WTI +0.25%, Brent +0.5%, US Nat Gas +0.25%, RBOB -0.3%.

CURRENCIES: 

In currency markets, the dollar is marginally weaker against most FX majors ahead of key employment report and as the US awaits Iran’s response to terms. The yen
consolidates just below 157-handle. The Fed’s custody holdings of Treasuries fell by $8.7 billion in the week to May 6. The drop coincided with Japan’s yen intervention, fueling speculation it sold US securities to fund FX purchases. Sterling rose after local
election results in the UK so ⁠far confirmed expectations of significant Labour losses,
with investors turning their attention to the outlook for British Prime Minister Keir Starmer. Starmer said he would not resign despite bruising ‌losses for his ruling Labour Party. US$ Index -0.1%, GBPUSD +0.45%, EURUSD +0.3%, USDJPY -0.1%, AUDUSD +0.3%,
NZDUSD +0.3%, USDCHF +0.25%, USDCAD -0.05%, USDSEK -0.7%, USDNOK -1.2%.

Spot Bitcoin +0.5%, Spot Ethereum +0.1%. 

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
• Aptiv (APTV) Raised to Overweight at Morgan Stanley; PT $71
• Atara Bio (ATRA) Raised to Buy at Canaccord; PT $13
• Bentley Systems (BSY) Raised to Overweight at Piper Sandler; PT $45
• Datadog (DDOG) Raised to Market Outperform at Citizens; PT $225
• Devon (DVN) Raised to Buy at Jefferies; PT $62
• Fastly (FSLY) Raised to Outperform at Raymond James; PT $23
• Fluence Energy (FLNC) Raised to Buy at Roth Capital Partners; PT $26
• Insight Enterprises (NSIT) Raised to Outperform at Raymond James
• Installed Building (IBP) Raised to Sector Perform at RBC; PT $228
• McDonald’s (MCD) Raised to Buy at CFRA
• PTC Therapeutics (PTCT) Raised to Buy at TD Cowen; PT $90
• Qualcomm (QCOM) Raised to Outperform at Daiwa; PT $225
• Shake Shack (SHAK) Raised to Buy at Stifel; PT $85
• Six Flags (FUN) Raised to Neutral at JPMorgan; PT $26
• SK Telecom (017670 KS) ADRs Raised to Hold at HSBC; PT $31
• Tapestry (TPR) Raised to Buy at UBS; PT $187
• Teleflex (TFX) Raised to Outperform at RBC; PT $155
• United Parks & Resorts (PRKS) Raised to Outperform at Mizuho Securities
• Victoria’s Secret (VSCO) Raised to Overweight at Wells Fargo; PT $57
• Western Midstream Partners (WES) Raised to Buy at Stifel; PT $46
• Downgrades
• Assured Guaranty (AGO) Cut to Neutral at Roth Capital Partners; PT $80
• Carlyle Group (CG) Cut to Sell at CFRA; PT $45
• Cut to Hold at TD Cowen; PT $53
• Cars.com (CARS) Cut to Neutral at B Riley; PT $13
• Cross Country Health (CCRN) Cut to Hold at Benchmark
• Deckers Outdoor (DECK) Cut to Underweight at Wells Fargo; PT $90
• Enel Chile (ENELCHIL CI) ADRs Cut to Neutral at Banco BTG Pactual; PT $5
• EnGene Therapeutics (ENGN) Cut to Neutral at Piper Sandler; PT $4
• Cut to Market Perform at Citizens
• Cut to Market Perform at Oppenheimer
• Cut to Equal-Weight at Wells Fargo; PT $2
• Cut to Equal-Weight at Morgan Stanley
• Cut to Neutral at Guggenheim
• Entrada Therapeutics (TRDA) Cut to Neutral at HC Wainwright
• EPAM Systems (EPAM) Cut to Neutral at Goldman; PT $110
• HubSpot (HUBS) Cut to Underperform at BofA
• Cut to Market Perform at William Blair
• Cut to Neutral at Cantor; PT $200
• KalVista (KALV) Cut to Hold at Stifel
• Nike (NKE) Cut to Equal-Weight at Wells Fargo; PT $45
• Organogenesis Holdings (ORGO) Cut to Neutral at BTIG
• PennyMac Mortgage (PMT) Cut to Market Perform at KBW; PT $12
• Planet Fitness (PLNT) Cut to Hold at TD Cowen; PT $50
• Cut to Neutral at KGI Securities; PT $50.50
• Cut to Equal-Weight at Morgan Stanley; PT $47
• Qualcomm (QCOM) Cut to Hold at DZ Bank; PT $195
• Robinhood (HOOD) Cut to Hold at First Shanghai; PT $82.86
• RXO (RXO) Cut to Equal-Weight at Morgan Stanley
• Trade Desk (TTD) Cut to Sector Weight at KeyBanc
• Cut to Market Perform at Oppenheimer
• Cut to Market Perform at William Blair
• Tronox (TROX) Cut to Hold at Fermium Research; PT $9
• Upwork (UPWK) Cut to Hold at Canaccord; PT $10
• Cut to Neutral at UBS; PT $10
• Cut to Market Perform at Citizens
• Vital Farms (VITL) Cut to Market Perform at Telsey; PT $11
• Cut to Hold at Stifel; PT $10
• Initiations
• AirJoule Technologies (AIRJ) Rated New Buy at Seaport Global Securities
• Applied Materials (AMAT) Reinstated Buy at HSBC; PT $517
• Ernexa Therapeutics Inc (ERNA) Rated New Buy at Brookline Capital
• Hammond Power Solutions (HPS/A CN) Rated New Buy at Paradigm Capital
• Knight Therapeutics (GUD CN) Reinstated Buy at Canaccord; PT C$9.50
• LibertyStream Infrastruc (LIB CN) Rated New Buy at Benchmark; PT C$2
• Mastercard (MA) Rated New Buy at NYKREDIT; PT $580
• Satellogic (SATL) Rated New Buy at Roth Capital Partners; PT $10
• Vonovia (VNA GR) ADRs Rated New Buy at Berenberg; PT $22.15

Data sources: Bloomberg, Reuters, CQG

David Wienke