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

DATA/HEADLINES:  10:30 ET Dallas Fed Manf. Activity

TODAY’S HIGHLIGHTS and News:  

  • At least 5 people, dead after night of tornadoes, storms in Oklahoma on Sunday
  • Tank Dell, Houston Texans wide receiver, wounded in Florida shooting
  • Bears select Iowa punter Tory Taylor in Round 4 of 2024 NFL Draft

Global stocks rose on Monday in anticipation of a busy week for earnings and economic reports. Earnings season will ramp up on Tuesday with anticipated
results from Amazon, McDonald’s, and Coca-Cola. The Federal Reserve’s policy announcement on Wednesday will be closely watched to gauge the possibility of future interest-rate cuts. Although no change in the policy rate is expected, investors will pay attention
to any indication regarding inflation remaining above the central bank’s 2% target. Meanwhile, Japanese authorities reportedly intervened in the foreign exchange market, as per DJ reports, following the yen’s surge past 160 per dollar and subsequent strong
rebound. Earlier, Masato Kanda, a top currency official, declined to confirm any action, stating that any buying activity would be disclosed at the end of May.

 

EQUITIES: 

 

US equity futures are set for further gains following their strongest week since November, driven by optimism about corporate performance despite
concerns over potential delays in Federal Reserve monetary easing. In pre-market trading,  Apple rose 2.0% after Bernstein upgraded its rating to outperform, maintaining a price target of $195. AT&T climbed 1.6% as Barclays upgrades it to overweight, citing
improved execution. Paramount Global shares surge 4.5% amid reports of concessions from the Redstone family and Skydance Media CEO to facilitate potential changes in control. Southwest Airlines shares declined after a downgrade from Jefferies, citing operational
challenges due to Boeing delays. Tesla jumped 9.5% on reports of a partnership with Baidu for Full-Self Driving deployment and passing key data-security requirements in China. Earnings include Paramount, NXP Semi, ON Semi, Dominos.

 

 

Futures ahead of the data: E-Mini S&P +0.2%, Nasdaq +0.3%, Russell 2000 +0.2%, DJI +0.2%.

European stocks rose supported by strong corporate earnings. The Stoxx 600 Index gained 0.3%, with miners leading and most sectors showing gains. Royal Philips NV experienced a
record surge after positive news on US claims related to sleep therapy devices, while Deutsche Bank AG fell following provisions announcement.  Philips surged 37% after setting aside funds for US claims, below analyst expectations. Deutsche Bank declined up
to 5.5% after announcing legal provisions, impacting assumptions of a share buyback. Atos SE rose up to 20% on news of a potential acquisition by the French state. Despite doubts on Federal Reserve rate cuts, investors anticipate continued market growth on
the back of stronger global economic prospects, with recent strong earnings driving European shares to their best week since January. Stoxx 600 +0.2%, DAX -0.1%, CAC +0.1%, FTSE 100 +0.4%.

Asian stocks rose for a second consecutive day, nearing bull market territory. The MSCI Asia Pacific Index increased by up to 1.2%, driven by gains from AIA Group and TSMC. The
Hang Seng Index and MSCI China Index briefly surpassed 20% gains from their January lows before retracting. Chinese property stocks surged amid expectations of eased home-purchase restrictions. Nomura strategists noted China’s potential for continued outperformance
but cautioned on tepid fundamentals. Markets in Taiwan, the Philippines, India, and South Korea saw gains, while Japan and Vietnam were closed. Attention turns to the Federal Reserve’s policy decision and US employment data later in the week. Melco International
and Macau casino operators rose after China streamlined entry and exit processes. Shares of Tesla’s Asian suppliers, like Ningbo Xusheng, gained following Elon Musk’s China visit and data security test announcements. Chinese auto makers, including BYD, saw
increases after the government announced subsidies for trading in old vehicles. Jinko Solar Co. shares fell after a fire incident at a manufacturing workshop. Hang Seng Index +0.5%, CSI 300 +1.1%, Taiwan +1.8%, Kospi +1%, Topix +1.2%, Philippines +2.1%, Vietnam
+0.3%. Singapore +0.1%, Sensex +1.3%, ASX 200 +0.8%.

FIXED INCOME: 
 

Treasuries maintained gains supported by euro-zone bond markets, notably France, following affirmations of the sovereign’s rating by Moodys
and Fitch. US yields are up 2 to 4 basis points across the curve, with S&P 500 futures rising slightly. US economic data includes Dallas Fed manufacturing activity today, followed by various indicators later in the week. Fed members are in a quiet period ahead
of the May 1 policy announcement.

METALS: 
   

Gold prices rose slightly due to significant selling of the US dollar in Japan. The dollar depreciated amid reports, yet unconfirmed by Japanese authorities, of selling
pressure to bolster the Japanese yen. The Federal Reserve’s upcoming monetary policy meeting on Wednesday will provide more clarity on interest rate outlooks. Spot gold +0.2%, silver +0.7%.   

 

ENERGY:   

 

Crude oil prices pared earlier losses as traders monitored efforts to broker a cease-fire between Israel and Hamas. The White House reported that
U.S. President Joe Biden had spoken with Israeli Prime Minister Benjamin Netanyahu, raising hopes for a cease-fire in the conflict. Last week, WTI crude rose 2% and Brent advanced 2.5%, supported by geopolitical tensions in the Middle East. However, economic
data has tempered expectations for Federal Reserve rate cuts, amid concerns about sluggish growth and persistent inflation. WTI -0.05%, Brent -0.3%, US Nat Gas +1%, RBOB +0.4%

 

 

CURRENCIES:   

In currency markets, the dollar index declined 0.3%, while the US 10-year yield dropped two basis points to 4.64%. The dollar fell against all G10 currencies as traders focused
on the upcoming Federal Reserve meeting and key US data releases The yen experienced its widest intraday range since 2022 amid speculation of Japanese intervention in the spot market.  USDJPY initially rose above 160 but later dropped 2.4% to 154.54 before
steadying above 155. With trading closed in Japan for a public holiday, thin liquidity likely exacerbated yen movements. Japan’s top currency official, Masato Kanda, refrained from commenting on intervention rumors. EURUSD rose, with German CPI exceeding previous
readings. ECB Governing Council member Pierre Wunsch cautioned against a July rate cut. US$ Index -0.3%, GBPUSD +0.3%, EURUSD +0.3%, USDJPY +1.5%, AUDUSD +0.5%, USDCHF +0.3%

 

 

Spot Bitcoin -2.2%, Ethereum -4.6%.

 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100
*Stars have added importance 

 

Data sources: Bloomberg, Reuters, CQG

 

 

Upgrades

    • America
      Movil
       (AMXB MM) ADRs Raised to Buy at Goldman; PT
      $22
    • Apple (AAPL)
      Raised to Outperform at Bernstein; PT $195
    • AptarGroup (ATR)
      Raised to Outperform at William Blair
    • AT&T (T)
      Raised to Overweight at Barclays; PT $20
    • Axsome
      Therapeutics
       (AXSM) Raised to Overweight at Morgan
      Stanley
    • Eastman
      Chemical
       (EMN) Raised to Buy at Jefferies; PT $125
    • Equinox
      Gold
       (EQX CN) Raised to Outperform at National Bank;
      PT C$10.25
    • FirstCash (FCFS)
      Raised to Buy at Loop Capital; PT $140
    • Freeport (FCX)
      Raised to Outperform at CICC; PT $54.50
    • General
      Dynamics
       (GD) Raised to Buy at Jefferies; PT $335
    • Li
      Auto
       (LI) ADRs Raised to Buy at 86Research
    • Liberty
      SiriusXM
       (LSXMA) Raised to Buy at Seaport Global
      Securities
    • Macatawa
      Bank
       (MCBC) Raised to Outperform at KBW; PT $15
    • Nutrien (NTR
      CN) Raised to Buy at Berenberg; PT $66
    • Old
      Dominion
       (ODFL) Raised to Hold at Vertical Research;
      PT $175
    • PTC
      Therapeutics
       (PTCT) Raised to Equal-Weight at Morgan
      Stanley
    • Roku (ROKU)
      Raised to Buy at Seaport Global Securities; PT $74
    • Shopify (SHOP
      CN) Raised to Buy at Citi; PT C$143.36
    • Sirius
      XM
       (SIRI) Raised to Buy at Seaport Global Securities
    • Tandem
      Diabetes
       (TNDM) Raised to Overweight at Wells Fargo;
      PT $45

Downgrades

Initiations

    • Aaon (AAON)
      Rated New Outperform at William Blair
    • Abivax (ABVX
      FP) ADRs Rated New Buy at Guggenheim; PT $50
      • ADRs
        Rated
         New Overweight at Piper Sandler; PT $42
    • Amer
      Sports
       (AS) Rated New Buy at Citic Securities; PT
      $20
    • Dave (DAVE)
      Rated New Market Outperform at JMP; PT $70
    • Geron (GERN)
      Rated New Buy at Cowen; PT $10
    • Granite
      Ridge Resources
       (GRNT) Rated New Inline at Evercore
      ISI; PT $8
    • Immunocore (IMCR)
      ADRs Rated New Outperform at Leerink; PT $74
    • Neurogene
      Inc
       (NGNE) Rated New Outperform at Leerink; PT $46
    • Ovid
      Therapeutics
       (OVID) Rated New Buy at HC Wainwright;
      PT $9
    • Pinnacle
      West Capital
       (PNW) Rated New Neutral at Citi; PT
      $78
    • Xoma (XOMA)
      Rated New Outperform at Leerink; PT $40

 

 

 

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