Daily Game Plan

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

DATA/HEADLINES:  8:30ET
CPI*, Real Avg Hourly Earnings; 1:00ET 10 Year Note Auction; 2:00ET Monthly Budget Statement

TODAY’S HIGHLIGHTS and News:  

• Two Ukraine-based Russian armed groups say they have launched attacks into Russia from Ukraine
• Ukrainian Foreign Minister To Sky News Arabia: It Is Time To Think About Peace In Ukraine
• Trump asked Elon Musk if he wanted to buy Truth Social: WAPO
  
• Hezbollah launched more than a hundred missiles at Israeli military sites
  
• Boeing failed 33 of 89 audits during an examination by the FAA, NYT

Global shares are in an upbeat mood before a crucial US inflation print that may give clues on the path ahead for interest rates. The MSCI All-World index edged higher
after overnight gains on Wall Street and by a pickup in technology stocks in Asia. The rally comes even as the headline number is expected to accelerate slightly on a monthly basis, while the core gauge cools. The BOJ is mulling a March hike but the outcome’s
too close to call, sources said. A final decision will come after the initial tally from spring wage talks is released Friday.              

EQUITIES:  

US equity futures make marginal gains ahead of the CPI print that is likely to set the tone for next week’s Federal Reserve rates decision. Today’s CPI data has the potential to shake
up analyst expectations of at least three interest rate cuts by the Fed this year, most likely starting in June. The tech heavy Nasdaq outperforms after Oracle’s strong results late yesterday. Bank of America strategists say US equities are entering a virtuous
cycle after another strong earnings season, prompting them to raise their S&P 500 EPS estimate to levels that imply 12% growth year-on-year. On the flip side, JPMorgan CEO Jamie Dimon said today that he wouldn’t take the prospect of a recession in the US “off
the table.”    

Futures ahead of the data: E-Mini S&P +0.2%, Nasdaq +0.4%, Russell 2000 +0.2%, DJI -0.02%  

In pre-market trading, Oracle shares rose 13% after the company reported third-quarter results that beat expectations and said “demand for our Gen2 AI infrastructure substantially exceeds
supply.”  3M Co. (MMM) rises 2% after naming aerospace veteran William Brown its new CEO. Acadia Pharmaceuticals (ACAD) slumps 16% after the biopharmaceutical company said it does not intend to conduct any more trials for pimavanserin after a Phase 3 study
failed to meet its primary endpoint. Boeing (BA) falls 1.6%, with the plane maker set to extend declines for a third-straight session as Chilean authorities started an investigation into a mid-air plunge by a Latam flight. Boeing failed 33 of 89 audits during
an examination by the FAA, the NYT reported. Southwest Airlines (LUV) drops 7% after the carrier said it plans to reduce capacity and re-optimize schedules, citing Boeing’s continued challenges.  Miniso ADRs (MNSO) jumps 12% after the Chinese low-cost retailer
reported revenue and earnings that beat estimates. On Holding (ONON) slides 16% after issuing first-quarter and full-year net sales forecasts that fell short of expectations.

European gauges gained ahead of keenly awaited US inflation data. The Stoxx Europe 600 is holding early gains, helped by strength in banks and miners. UK stocks outperformed and the British
pound dropped after data showed an unexpected increase in the unemployment rate and a slowing in the pace of pay increases, tempering concerns about inflationary forces. Among individual movers, Porsche AG shares turned higher, as analysts noted the carmaker’s
strong cashflow. Leonardo SpA rose to the highest level in 17 years after the aerospace and defense specialist doubled its dividend and published a strategic plan. Stoxx 600 +0.4%, DAX +0.3%, CAC +0.05%, FTSE 100 +1.1%. Basic Resources +2.1%, Banks +1.3%,
Travel & Leisure +1.2%. Healthcare -0.3%.

Asian stocks erased earlier losses, led by a surge in Hong Kong shares, with investors continuing to assess clues from the Bank of Japan on whether it will end negative interest-rate
policy as early as next week. The MSCI Asia Pacific Index gained 0.4% with tech giants such as Tencent and Alibaba the biggest contributors. Shares of Oracle Corp.’s Asian units rose after the US software firm beat third-quarter expectations. Xiaomi had its
biggest intraday jump in more than a year after saying it’ll start selling its long-awaited EVs this month.  Benchmarks in Tokyo pared declines as the yen weakened after Governor Kazuo Ueda reaffirmed that the economy continues to recover gradually. Hang Seng
Tech +4.6%, Hang Seng Index +3%, Taiwan +1%, Kospi +0.8%, Vietnam +0.8%, CSI 300 +0.2%, Sensex +0.2%, ASX 200 +0.1%. Topix -0.35%, Shanghai Composite -0.4%. 

FIXED INCOME: 
 

Treasuries are slightly richer across the curve with gains led by the long-end, extending flattening of 5s30s spread through Monday’s low. Gilts outperform after
sale of UK 10-year bonds was oversubscribed by the most since April 2020. The yield on US 10-year Treasury notes eased a bit to 4.09% with gilts outperforming by almost 6bp in the sector. Treasury auction cycle continues with $39b 10-year reopening; Monday’s
3-year new issue stopped through by 1.3bp. IG dollar issuance is expected to remain quiet with inflation data due.

METALS: 
   

Gold is slightly lower, holding just below record highs as traders awaited the US consumer price index figures. Gold has risen for nine straight days as elevated
geopolitical tensions in the Middle East and Ukraine have bolstered the precious metal’s role as a haven asset, while central banks, particularly in China, added to their holdings. Analysts said the rally pushed gold higher than can be justified by the fundamentals,
and a correction is due. Spot gold -0.4%, silver -0.3%.  14 day RSI hit its highest since the March 2022 high.

ENERGY:   

Oil edged higher as traders awaited OPEC’s monthly report and industry figures on US stockpiles. Russia’s seaborne crude exports surged to the highest level for the
year so far, with shipments from a key Pacific port rebounding after a storm hampered loading operations in the previous week. China has increased its purchases of Russia’s Sokol crude in recent weeks, taking advantage of India’s reluctance to buy the crude
due to stepped up US sanctions enforcement. Russia has reported more drone attacks out of Ukraine on key refinery installations and storage facilities on Russian soil. WTI +0.1%, Brent +0.1%, US Nat Gas +2.9%, RBOB -0.2%.

CURRENCIES:   

In currency markets, the yen weakened for the first time in six days after Bank of Japan Governor Kazuo Ueda pointed to some weakness in consumption of nondurable
goods, while also signaling the central bank remains on track to end its negative-interest-rate policy. Futures now imply a roughly 50% chance the BOJ will shift rates to zero at its meeting on March 18-19, though some believe it could wait until its April
26 meeting. Sterling eased after data showed UK wage growth cooled a little more than expected last month, putting a bit more pressure on the Bank of England to cut rates sooner rather than later. The US Dollar, meanwhile, has pared back a fragment of last
week’s losses with CPI today’s focal point, which will provide clues about the trajectory of the recent disinflation trend. US$ Index -0.02%, GBPUSD -0.2%, EURUSD +0.1%, USDJPY +0.4%, AUDUSD +0.02%.    

Bitcoin -0.2%, Ethereum -0.6%. The London Stock Exchange (LSE) announced that it will start accepting applications for Bitcoin and Ether crypto exchange-traded notes
(ETNs) in the second quarter of 2024 Additionally, the U.K.’s Financial Conduct Authority decision to allow exchanges to offer similar products
– exchange-traded notes backed by cryptocurrencies – to institutional investors.  This most recent surge has lifted Bitcoin’s total market cap above that of Silver, becoming the 8th most valuable asset in the world. Ether’s price performance appears to be
boosted by Ethereum’s upcoming Dencun update and the possible approval of a spot Ether exchange-traded fund (ETF) by the SEC.

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
• American Express (AXP) Raised to Buy at Hedgeye
• AnaptysBio (ANAB) Raised to Outperform at Wedbush
• BJ’s Restaurants (BJRI) Raised to Buy at Hedgeye
• Carvana (CVNA) Raised to Hold at Jefferies; PT $85
• Choice Hotels (CHH) Raised to Hold at Hedgeye
• Coinbase (COIN) Raised to Market Perform at Raymond James
• Dollar General (DG) Raised to Neutral at JPMorgan; PT $158
• Equitrans (ETRN) Raised to Equal-Weight at Wells Fargo; PT $12
• GAP Airports (GAPB MM) ADRs Raised to Outperform at Grupo Santander
• HashiCorp (HCP) Raised to Sector Outperform at Scotiabank; PT $31
• Invitation Homes (INVH) Raised to Hold at Hedgeye
• National Health Investors (NHI) Raised to Outperform at BMO; PT $67
• NCR Voyix Corp (VYX) Raised to Buy at Northcoast; PT $17
• Oracle (ORCL) Raised to Outperform at William Blair
• Red Robin (RRGB) Raised to Hold at Hedgeye
• Ventyx Bio (VTYX) Raised to Overweight at Wells Fargo; PT $16
• Raised to Outperform at Oppenheimer; PT $12
• Downgrades
• Acadia Pharma (ACAD) Cut to Neutral at Mizuho Securities; PT $25
• Alpha Teknova (TKNO) Cut to Neutral at BTIG
• Buenaventura (BUENAVC1 PE) ADRs Cut to Equal-Weight at Morgan Stanley
• NGM Biopharma (NGM) Cut to Market Perform at Raymond James
• Nike (NKE) Cut to Hold at Hedgeye
• SilverCrest Metals (SIL CN) Cut to Hold at Desjardins; PT C$9.50
• Sonendo (SONX) Cut to Hold at Stifel; PT 25 cents
• STEP Energy (STEP CN) Cut to Market Perform at BMO; PT C$4.50
• Initiations
• BBB Foods (TBBB) Rated New Sector Outperform at Scotiabank; PT $33
• Bitdeer Technologies Group (BTDR) Rated New Buy at B Riley; PT $9
• Central Garden & Pet (CENT) Rated New Buy at Canaccord; PT $52
• Dexcom Inc (DXCM) Rated New Outperform at RBC; PT $165
• FedEx (FDX) Rated New Buy at Hedgeye
• Ingersoll Rand (IR) Rated New Neutral at BNPP Exane; PT $92
• New York Times Co. (NYT) Rated New Buy at Citi; PT $52
• Pentair (PNR) Rated New Neutral at BNPP Exane; PT $86
• Qualcomm (QCOM) Rated New Neutral at President Capital Management
• Regeneron (REGN) Rated New Outperform at Bernstein; PT $1,125
• TGS (TGSU2 AR) ADRs Reinstated Overweight at TPCG Valores; PT $17
• Veralto (VLTO) Rated New Outperform at BNPP Exane; PT $103
• Xylem (XYL) Rated New Outperform at BNPP Exane; PT $150
• Zevra Therapeutics Inc (ZVRA) Rated New Outperform at William Blair
• Zurn Elkay Water (ZWS) Rated New Outperform at BNPP Exane; PT $40

Data sources: Bloomberg, Reuters, CQG