Daily Game Plan

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

DATA/HEADLINES: 
10:00 a.m.: US Feb. JOLTS, US Feb. Factory Orders, 10:10 a.m.: Fed’s Bowman speaks, 12:00 p.m.: Fed’s Williams speaks, 12:05 p.m.: Fed’s Mester speaks, 1:30 p.m.: Fed’s Daly speaks

*ADP RESEARCH INSTITUTE SAYS U.S. ADDED 184,000 JOBS IN MARCH

TODAY’S HIGHLIGHTS and News:  

• Single stocks saw the largest notional short selling in six months, while overall prime brokerage book saw largest net selling in
  five weeks, Goldman Sachs says.
• University of Iowa and Louisiana State set a TV ratings record for women’s college basketball with 12.3 million viewers.

Global shares eased on Wednesday due to increasing bond yields, prompting investors to evaluate potential decreases in U.S. rates. Pimco boosted bond bets that the
Fed will deliver fewer rate cuts than other major central banks in the next couple of years. Strong U.S. data and a surge in oil prices to five-month high led traders to revise down their expectations for three interest-rate cuts from the Federal Reserve this
year. Additionally, a significant earthquake in Taiwan raised concerns about potential disruptions in the chip-making industry.

EQUITIES:  

US equity futures weakened and continued their decline this week as investors weigh signs of economic strength against concerns of a prolonged period of higher interest rates
by the Federal Reserve. In premarket trading, notable movements include Ally Financial shares falling 2.6% after JPMorgan downgraded its recommendation, while Dave & Buster’s shares rose 7.1% following positive fourth-quarter EBITDA results and a new share
buyback program. Intel shares plummeted 5.3% after reporting deepened losses in its factory business, while Vanda Pharmaceuticals surged 23% on FDA approval for a bipolar disorder treatment. Wolfspeed shares also declined 2.2% after a downgrade from Wells
Fargo Securities.
Earnings include Levi Strauss, BlackBerry.

Futures ahead of the bell: E-Mini S&P -0.06%, Nasdaq -0.1%, Russell 2000 +0.1%, DJI flat

European gauges were mixed, with concerns over higher interest rates persisted due to rising commodity prices. The Stoxx Europe 600 index was unchanged, with most sectors trading
flat although banks performed relatively well. Investors are adjusting their expectations regarding interest rates, with speculation about rate cuts in Europe and the US. Consumer prices in the region rose an annual 2.4% last month, down from 2.6% in February
and adding evidence that policymakers are on track to return inflation to their 2% target. President Christine Lagarde has signaled a first cut in June, officials from Germany, France, and Spain have also subscribed to this timeline.  Positive earnings outlooks
and corporate actions influenced single stock movements, with Renishaw plc falling after Siemens AG confirmed it wouldn’t make an offer, and OVS rising following an acquisition agreement. Analysts see potential tailwinds for the UK market and increased M&A
activity. Additionally, Deutsche Bank suggested Glencore might consider a US listing. Stoxx 600 flat, DAX +0.2%, CAC +0.1%, FTSE 100 -0.2%.

In Asian markets, equities dropped to their lowest level in two weeks as speculation that central banks may keep interest rates higher for longer weighed on risk sentiment. The MSCI Asia Pacific
Index fell 0.7% with virtually all major markets, including Japan, China and South Korea in the red. China’s Caixin services PMI rose to 52.7 in March, beating estimates while the BOJ maintained its debt purchases. Chip-related stocks were among the biggest
drags on the region after Intel posted widening foundry losses and TSMC evacuated production lines following Taiwan’s biggest earthquake in 25 years. Electric vehicle producers in Hong Kong led tech stocks lower following Tesla’s missed deliveries. Topix -0.29%,
Vietnam -1.2%, Shanghai Composite -0.2%, Singapore -0.7%, CSI 300 -0.36%, Philippines -1.46%, Sensex -0.04%, Hang Seng Index -1.2%. ASX 200 -1.3%.

FIXED INCOME: 
 

Treasury yields are slightly cheaper across the curve despite reaching a high near 4.39% on Tuesday. Curve spreads are broadly within 1bp of Tuesday closing levels; 2s10s trades around -34bp, near
least-inverted level in about 2 weeks after steepening by more than 5bp Tuesday.  Core European rates rallied following slower-than-expected euro-area inflation, reinforcing expectations for an ECB rate cut in June. The US session includes key economic data
such as March ADP employment change and services PMIs, along with several Fed speakers including Chair Powell.

METALS: 
   

Gold slipped from Tuesday’s record highs as two Fed members expect three reductions in rates this year, though with no urgency. Gold’s rise of over 10% this year
has been led by expectations that lower US interest rates are on the horizon, however, a surprisingly strong US economy has made timing of cuts unclear. Investors will look to Powell’s scheduled speak on Wednesday and nonfarm payrolls Friday for further clarity.
Gold -0.43%,silver +0.32%.

ENERGY:   

Oil prices edged higher near a five-month peak following an industry report indicating a decrease in US crude inventories. Brent crude hovered around $89 per barrel after a surge
on Tuesday. OPEC and its allies are expected to reaffirm current supply cuts during an online meeting on Wednesday, with member nations likely to maintain their overall strategy. Meanwhile, European natural gas slumped to the lowest in almost three weeks as
high stockpiles at the end of winter dampened demand. WTI +0.8%, Brent +0.7%, European Nat gas -2.3%, RBOB +0.5%

CURRENCIES:   

In currency markets, the dollar index is trading steadily within a tight range ahead of Fed Chair Jerome Powell’s remarks today. USDJPY remains near cycle highs amid
looming intervention risks from the BOJ. EURUSD trades slightly higher as inflation data shows the region slowed to 2.4%, more than expected and keeping focus on rate cuts to June. The yuan slid and was approaching its 2% daily trading limit versus the dollar
as fragile sentiment toward China’s economy and a resilient greenback weigh. British sterling trades little changed against the dollar. US$ Index -0.1%, GBPUSD is flat, EURUSD +0.09%, USDJPY -0.11%, AUDUSD -0.06%, NZDUSD -0.03%, USDCHF -0.04%.

Bitcoin +0.7%, Etherium +1.6%

Data sources: Bloomberg, Reuters, CQG

• Upgrades
• Fluence
  Energy (FLNC) Raised to Outperform at Raymond James;
  PT $22
• Hologic (HOLX)
  Raised to Buy at Citi; PT $95
• Integra
  LifeSciences (IART) Raised to Neutral at Citi; PT
  $38
• Jones
  Lang (JLL) Raised to Strong Buy at Raymond James
• Navient (NAVI)
  Raised to Neutral at JPMorgan; PT $17
• Patterson-UTI (PTEN)
  Raised to Strong Buy at CFRA
• Sotera (SHC)
  Raised to Buy at Citi; PT $16
• UPS (UPS)
  Raised to Buy at Redburn; PT $150
• Downgrades
• Ally
  Financial (ALLY) Cut to Underweight at JPMorgan;
  PT $39
• Atlantica
  Sustainable (AY) Cut to Sector Perform at National
  Bank
• Bio-Rad (BIO)
  Cut to Neutral at Citi; PT $365
• Costco (COST)
  Cut to Accumulate at Gordon Haskett; PT $775
• Cushman
  & Wakefield (CWK) Cut to Outperform at Raymond James
• Dollar
  Tree (DLTR) Cut to Hold at Gordon Haskett; PT $140
• Endeavor
  Group (EDR) Cut to Neutral at Guggenheim; PT $27.50
• Cut
  to Neutral at Seaport Global Securities
• Essent (ESNT)
  Cut to Neutral at JPMorgan; PT $61
• Five
  Below (FIVE) Cut to Accumulate at Gordon Haskett
• Guild
  Holdings (GHLD) Cut to Underweight at JPMorgan; PT
  $14
• Indiva
  Ltd (NDVA CN) Cut to Hold at Echelon Wealth; PT 12
  Canadian cents
• Lowe’s (LOW)
  Cut to Hold at Gordon Haskett; PT $245
• Nuvei (NVEI
  CN) Cut to Market Perform at Raymond James
• Ouster (OUST)
  Cut to Neutral at Chardan Capital Markets; PT $10
• Wolfspeed
  Inc (WOLF) Cut to Equal-Weight at Wells Fargo; PT
  $30
• Initiations
• Affirm
  Holdings (AFRM) Rated New Hold at Needham
• Airbnb (ABNB)
  Rated New Neutral at B Riley; PT $150
• Amer
  Sports (AS) Rated New Buy at SWS Research
• Applied
  Industrial Tech (AIT) Rated New Outperform at Oppenheimer
• Augmedix (AUGX)
  Reinstated Buy at B Riley; PT $5.50
• BlackSky
  Technology (BKSY) Rated New Buy at HC Wainwright;
  PT $2.50
• BNY
  Mellon (BK) Reinstated Outperform at Autonomous;
  PT $63
• Booking (BKNG)
  Rated New Buy at B Riley; PT $4,400
• Carlisle (CSL)
  Rated New Buy at Goldman; PT $455
• Carter’s (CRI)
  Rated New Underperform at Baptista Research; PT $81.10
• Cavco
  Industries (CVCO) Rated New Underperform at Baptista
  Research
• Dorman
  Products (DORM) Rated New Hold at Baptista Research;
  PT $109
• Ecolab (ECL)
  Rated New Overweight at Piper Sandler; PT $260
• Fox
  Factory (FOXF) Rated New Hold at Baptista Research;
  PT $54.90
• Helen
  of Troy (HELE) Rated New Buy at Baptista Research;
  PT $145.50
• Informatica (INFA)
  Rated New Outperform at Baird
• Kenvue (KVUE)
  Rated New Market Perform at William Blair
• Klaviyo (KVYO)
  Rated New Sector Perform at Scotiabank; PT $30
• Legend
  Biotech (LEGN) ADRs Rated New Overweight at Cantor;
  PT $82
• Moneylion (ML)
  Rated New Buy at Needham; PT $90
• Nasdaq
  Inc. (NDAQ) Rated New Buy at Edward Jones
• Northern
  Trust (NTRS) Reinstated Neutral at Autonomous; PT
  $89
• Powerfleet
  Inc. NJ (PWFL) Reinstated Outperform at William Blair
• Prime
  Medicine (PRME) Rated New Outperform at Wedbush;
  PT $12
• Robinhood (HOOD)
  Rated New Market Perform at KBW; PT $20
• SoFi
  Technologies (SOFI) Rated New Buy at Needham; PT
  $10
• Spectrum
  Brands (SPB) Rated New Underperform at Baptista Research
• State
  Street (STT) Reinstated Neutral at Autonomous; PT
  $78
• TripAdvisor (TRIP)
  Rated New Hold at Baptista Research; PT $30.90
• Werewolf (HOWL)
  Rated New Market Outperform at JMP; PT $12
• Zeta (ZETA)
  Rated New Buy at DA Davidson; PT $15