Daily Game Plan

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

DATA/HEADLINES:  11:00ET NY Fed 1-Yr Inflation Expectations; 1:00ET 3 Year Note Auction

TODAY’S HIGHLIGHTS and News:  

• 11 out of the last 13 jobs reports have been revised down from the original headline
• Hamas said more Israeli hostages have died than earlier thought
• Oppenheimer dominated the Oscars with seven awards
• 50 people were injured after a Latam Airlines flight from Sydney to Auckland suffered a mid-air incident
• Russell Wilson agreed to sign a one-year deal with the Steelers
  

Global shares are on the backfoot to start the week, falling from last week’s record highs as investors grappled with uncertainty over the economic outlook and waited
for US inflation data due tomorrow. Last week, comments from Fed Chair Jerome Powell and ECB policymakers raised expectations that interest rate cuts will begin in summer.  President Biden warned Israel against an invasion of the city of Rafah in southern
Gaza as cease-fire talks between Israel and Hamas remained deadlocked at the beginning of Ramadan.  American companies are set to announce investments amounting to more than $1 billion in the Philippines, US Commerce Secretary Gina Raimondo said during a two-day
trade and investment mission, the first of its kind for the Philippines. The delegation includes executives from 22 companies including United Airlines, Google, Visa, KKR and Microsoft.               

EQUITIES:  June is front month in equity futures

US equity futures slipped to start a data-heavy week, with Tuesday’s US Consumer Price Index report a focal point. Traders are on high alert for a hotter-than-expected US inflation print
tomorrow after being caught off guard in February. Core prices in the consumer price index are expected to tick 0.3% higher in February from a month earlier, and 3.7% on a year-over-year basis — which would be the smallest annual rise since April 2021. The
rally in US equities needs a boost from earnings, Morgan Stanley’s Michael Wilson warned. Mag 7 shares are far from peak valuation, JPMorgan analysts said, playing down concerns around a bubble in US technology megacap. Biden signed into law a $460 billion
package to fund a portion of the government until September. Funding for other parts is set to expire on March 22.   

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.5%, Russell 2000 -0.2%, DJI -0.4%  

In pre-market trading, Amplify Energy (AMPY) gains 12% after the company said it’s confident the oil sheen off the coast of Huntington Beach, California is not related to its operations.
Boeing (BA) slips 2% after a weekend of negative headlines, which included the US Department of Justice opening a criminal investigation into the incident on an Alaska Airlines-operated 737 Max 9 jet in January. Choice Hotels (CHH) gains 4% after the company
ends attempts to combine with Wyndham Hotels & Resorts (WH). Wyndham falls 3%. Cryptocurrency-linked companies rally as Bitcoin extends gains to an all-time high, surpassing the $71,000 mark. Among movers: Coinbase Global (COIN) +6%, Riot Platforms (RIOT)
+4%. EQT Corp. (EQT) falls 4% after agreeing to buy back its former unit Equitrans Midstream Corp. (ETRN)  in an all-stock transaction valued at about $5.2 billion, the latest in a flurry of deals in the oil and gas industry. Equitrans rises 8%. Fortrea Holdings
(FTRE) tumbles 10% after reporting fourth-quarter revenue and adjusted earnings per share that trailed the average analyst estimates. Lexicon Pharmaceuticals (LXRX) gains 5% after quarterly results and the placement of $250 million of equity securities. MoonLake
Immunotherapeutics (MLTX) jumps 7% after the drug developer released results from a mid-stage trial of its experimental therapy sonelokimab for treatment of patients with active psoriatic arthritis. Revance Therapeutics (RVNC) advances 9% after the biopharmaceutical
company reported to the SEC on Friday that CEO Mark Foley purchased 30,000 shares. Staar Surgical (STAA) rises 5% after Stifel raised its rating on the implantable eye lens company to buy, citing a favorable entry point and potential upside to first-quarter
sales.

European gauges are lower, with basic resources leading declines after iron ore slumped on slackening demand from China. Corporate news flow was pretty light as Europe’s earnings season
draws to a close. Traders will shift their focus to the US CPI data tomorrow, which could change expectations for when major central banks will begin cutting rates.  Stoxx 600 -0.5%, DAX -0.7%, CAC -0.3%, FTSE 100 -0.5%. Technology -1.8%, Basic Resources -1.8%,
Media -1.2%, Retail -0.6%. REITs +0.3%.

Asian shares were mostly lower as a pullback in high-flying semiconductor shares and a selloff in Japanese equities weighed. Data released today showed Japan was not in recession after
economic growth was revised up to an annualized 0.4% for the December quarter. Chinese stocks gained after data over the weekend showed Chinese consumer prices rose for the first time since August, easing some concerns over deflation. China also said it will
improve home sales in a “forceful” and “orderly” way.  The MSCI Asia Pacific Index fell 0.8% as chip stocks slumped after worries over lofty valuations triggered Nvidia Corp.’s worst slump since May. The Nikkei 225 Index lost 2.2% as growing speculation the
Bank of Japan will raise interest rates boosted the yen and hurt exporter shares. Topix -2.2%, ASX 200 -1.8%, Philippines -1%, Vietnam -0.9%, Sensex -0.8%, Kospi -0.8%, Taiwan -0.3%. Hang Seng Index +1.4%, CSI 300 +1.25%, Shanghai Composite +0.7%.

FIXED INCOME: 
 

Treasuries are narrowly mixed with front-end of the curve underperforming slightly; 2-year yields cheaper by around 2bp on the day. Moves across core European rates
also muted, with bunds marginally flatter. The US session includes a wave of supply, with heavy corporate issuance expected alongside an auction of 3-year Treasury notes followed by $10B 10-year and $22B 30-year on Tuesday and Wednesday. 10-year Treasury yield
hovers around 4.08%.

METALS: 
   

Gold hovered near a record high after a string of eight consecutive days of gains, as traders awaited Tuesday’s release of the consumer price index for clues on potential
interest rate cuts. A hotter-than-expected reading — as happened last month — would be a setback for further gains in the metal. Bullion traded in a narrow range overnight after rallying almost 5% last week. Spot gold +0.03%, silver +0.2%. 

ENERGY:   

Crude oil prices edged lower ahead of reports from OPEC and the IEA this week that may provide clues on the demand outlook. Crude has remained stuck in a narrow trading
range, with analysts tying support, in part, to production cuts by the OPEC+. Skepticism around the ability of OPEC and its allies to stick to output cuts, however, has served to limit upside for crude, analysts said. Goldman maintained its bearish outlook
for US natural gas for 2024 and lowered guidance for next year. WTI -0.5%, Brent -0.4%, US Nat Gas -0.6%, RBOB +0.3%.

CURRENCIES:   

In currencies, the Japanese yen extended its rise on expectations the Bank of Japan is about to start lifting interest rates. Reuters reported that a growing number
of Bank of Japan policymakers are warming to the idea of ending negative rates this month. The dollar is slightly lower, on track for a seventh day of losses and its longest losing streak in almost four years. Sterling nudged lower ahead of official labor
data which is due tomorrow.  US$ Index -0.05%, GBPUSD -0.05%, EURUSD +0.02%, USDJPY -0.3%, AUDUSD -0.2%, USDNOK +0.15%, USDCHF -0.15%. 

Bitcoin +3%, Ethereum +3.2%.  Bitcoin topped $71,000 for the first time, advancing for a sixth straight day and taking this year’s rally to almost 70%.  

TECHNICAL LEVELS:  

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
• Algonquin Power (AQN CN) Raised to Hold at Desjardins; PT C$7.75
• Bilibili (BILI) ADRs Raised to Neutral at JPMorgan; PT $11
• Freshpet (FRPT) Raised to Buy at Truist Secs; PT $135
• Kingsoft Cloud (KC) ADRs Raised to Overweight at JPMorgan; PT $4.20
• P&G (PG) Raised to Buy at Truist Secs; PT $175
• PDD (PDD) ADRs Raised to Buy at Jefferies; PT $157
• Staar Surgical (STAA) Raised to Buy at Stifel; PT $50
• Xcel Energy (XEL) Raised to Overweight at Barclays; PT $54
• Raised to Outperform at Wolfe; PT $58
• Downgrades
• Amylyx Pharmaceuticals (AMLX) Cut to Market Perform at Leerink; PT $4
• Cut to Neutral at Baird; PT $4
• Cut to Neutral at Goldman; PT $4
• Bilibili (BILI) ADRs Cut to Neutral at Citi; PT $12.50
• Dominion Energy (D) Cut to Market Perform at BMO; PT $49
• Hyatt (H) Cut to Equal-Weight at Morgan Stanley; PT $156
• Light & Wonder (LNW) Cut to Neutral at Redburn; PT $110
• Petrobras (PETR4 BZ) ADRs Cut to Equal-Weight at Morgan Stanley; PT $18
• Super Micro Computer (SMCI) Cut to Hold at Aletheia Capital; PT $650
• Initiations
• Arcadium Lithium (ALTM) Rated New Outperform at Haitong Intl; PT $9.50
• ArcBest (ARCB) Reinstated Overweight at JPMorgan; PT $168
• Celsius Holdings (CELH) Rated New Hold at Baptista Research; PT $95.50
• Disney (DIS) Rated New Buy at CMB International; PT $142
• Duolingo (DUOL) Rated New Overweight at JPMorgan; PT $270
• Hubbell (HUBB) Rated New Hold at Deutsche Bank; PT $427
• Lamb Weston (LW) Rated New Outperform at BNPP Exane; PT $128
• nVent Electric (NVT) Rated New Buy at Deutsche Bank; PT $83
• Old Dominion (ODFL) Reinstated Neutral at JPMorgan; PT $465
• Optinose (OPTN) Rated New Buy at HC Wainwright; PT $5
• Phinia (PHIN) Rated New Overweight at Morgan Stanley; PT $50
• Revolution Medicines (RVMD) Rated New Overweight at Piper Sandler
• Saia (SAIA) Rated New Overweight at JPMorgan; PT $676
• TJX (TJX) Rated New Buy at President Capital Management; PT $110
• Worthington Steel (WS) Rated New Neutral at Seaport Global Securities

Data sources: Bloomberg, Reuters, CQG