Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing, CPI*, Retail Sales; 10:00ET Business Inventories, NAHB Housing
Market Index, Fed’s Barr testifies before House committee; 12:00ET Fed’s Kashkari speaks; 3:20ET Fed’s Bowman speaks; 4:00ET TIC Flows

US APRIL CORE CONSUMER PRICES RISE 0.3% M/M, US APRIL CORE CONSUMER PRICES RISE 3.6% Y/Y%; EST. 3.6%

HIGHLIGHTS and News:  

• Biden offers to debate Trump twice before the November election
• WTI likely headed toward .618 retracement support around $75.30
• 10-year yield breaks tend line support
• Technology likely to outperform as XLK vs SPY climbs above trend line and 200dma
  

Global shares rose ahead of the US consumer price report that could prove decisive in when the Federal Reserve cuts interest rates. The MSCI All-World share index
traded at a record high, up 0.15% on the day, which brought gains for the year so far to 8.3%. Euro area industrial production recorded a 0.6% m/m expansion in March, above consensus of 0.4%, driven almost entirely by Ireland. Growth in February was revised
up by 0.2pp to 1.0% m/m. Germany, France, Italy and Spain all saw monthly contractions. President Biden plans to send more than $1 billion in additional weapons to Israel, the WSJ reported, less than a week after he said he would halt arms shipments if the
country attacks Rafah.         

EQUITIES: 

US equity futures are muted as investor focus shifts to crucial US consumer price data, which could provide a fresh catalyst for stocks. Underlying US inflation probably moderated in
April for the first time in six months, offering hope that price pressures will start to ease again after a string of upside surprises. CPI is expected to show headline inflation of 3.4%, a slight deceleration from March’s 3.5% annual gain in prices, according
to estimates from Bloomberg. Core prices are expected to have climbed 0.3% month over month in April, compared to the 0.4% increase seen in the prior month. Morgan Stanley remains “bullish the Fed will cut three times this year.” It anticipates the first rate
cut to come in September, followed by two more cuts in November and December. Meanwhile, the week’s renewed frenzy around meme-stock favorites GameStop and AMC Entertainment cooled off a bit, with shares of the high-risk, heavily shorted companies giving up
most of their premarket gains 

Futures ahead of the CPI data: E-Mini S&P is flat, Nasdaq -.01%, Russell 2000 is flat, DJI -0.05%. FUTURES SPIKE HIGHER AFTER THE INFLATION REPORT

XLK relative to SP500 settled just above the 200-day moving average.

In pre-market trading, New York Community Bancorp shares (NYCB) rise over 5% after the lender agreed to sell about $5 billion in mortgage warehouse loans to JPMorgan. Boeing (BA) slipped
1% after the DOJ said the company violated a deferred-prosecution agreement related to the crashes of two 737 Max airplanes, exposing the plane maker to possible criminal prosecution. Arcutis Biotherapeutics (ARQT) soars 19% after the company reported first-quarter
sales that exceeded expectations. Boot Barn (BOOT) declines 6% after the retailer issued full-year sales and earnings-per-share forecasts that trailed expectations. Dlocal (DLO) slides 27% after the Uruguayan fintech reported net income for the 1Q that missed.
Monday.com (MNDY) rises 19% after the application-software company reported first-quarter revenue that beat expectations. Nextracker (NXT) rises 13% after the maker of trackers used to position solar panels toward the sun provided guidance that beat estimates.
The company said it has a backlog of more than $4B. Nu Holdings (NU) gains 4% after the parent of Nubank reported record revenue. Sportradar (SRAD) rises 12% after posting 1Q revenue that beat.

European gauges are mixed to better, with the Stoxx 600 benchmark hitting a new record in a ninth straight day of gains, its longest winning streak since August 2021. Miners rallied along
with copper prices, while industrial good and real estate stocks also outperformed. ECB’s Villeroy said that “the ECB will very likely cut rates in June,” aided early sentiment. The euro-area economy is still headed for a soft landing, with inflation backpedaling
more quickly than previously expected and growth picking up through next year, EU forecasts showed. But it projected that Italy now faces a widening deficit, and a jump in debt next year. Stoxx 600 +0.2%, DAX +0.4%, CAC -0.2%, FTSE 100 +0.15%. REITs +1.7%,
Utilities +0.8%, Telecom +0.6%. Retail -0.5%, Energy -0.4%.

Asian indices were mixed, although the MSCI Asia Pacific Index climbed 0.6% for its highest close since April 2022.  Sony provided the biggest boost after announcing strong results and
a buyback. Shares in China closed lower for the third session in a row after President Biden unveiled sweeping tariff hikes on a range of Chinese imports on Tuesday. Among major Chinese companies, Tencent posted better-than-expected earnings while Alibaba’s
results disappointed.  Chinese developers extended their rally after Bloomberg reported authorities are considering a proposal to ask local governments to buy unsold homes from distressed builders.  Markets were closed for holidays in Hong Kong and South Korea. 
Indonesia +1.35%, Vietnam +0.9%, Taiwan +0.8%, ASX 200 +0.35%, Nikkei 225 +0.1%. Sensex -0.2%, Singapore -0.7%, Philippines -0.75%, CSI 300 -0.85%.

FIXED INCOME: 
 

Treasury yields edged lower as traders set up for today’s inflation data and retail sales reports. US yields are richer by up to 2bp across belly of the curve which
outperforms slightly, steepening 5s30s spread by almost 1bp on the day; 10-year yields around 4.415%. April’s core CPI reading is expected to be the lowest yet this year, in which case the core PCE deflator, the Fed’s preferred inflation gauge, could also
register its lowest reading in 2024.

METALS: 
   

Gold extended gains after rising almost 1% on Tuesday but are well off the overnight highs. Traders anticipate the CPI report this morning to show moderating underlying
inflation in April, potentially bolstering the case for rate cuts this year. The Fed’s Loretta Mester told the WSJ that it’s appropriate for the Fed to hold until it has more evidence of price pressures easing.  Copper futures in New York rallied to a record
high after a short squeeze that’s prompted a scramble to divert metal in other regions to US shores. Comex futures for July delivery rose as much as 4.2%, passing an earlier record for the most active contract set in March 2022. That high on Comex is equivalent
to $11,212 a ton — about $1,000 above the latest benchmark price on the London Metal Exchange. Spot gold +0.2%, silver +0.5%.   

ENERGY:   

Crude oil is lower while large wildfires threatened Canada’s oil sands and ahead of an expected drop in US crude oil and gasoline inventories. The IEA lowered its
outlook for crude demand growth this year amid an economic slowdown and mild weather in Europe. Still, annual consumption remains on track to reach a record of more than 103 million barrels a day. US gasoline inventories resumed their drop, falling by 1.27
million barrels last week, API data showed. That would bring down total holdings to the lowest so far this year if confirmed by the EIA today. WTI -0.6%, Brent -0.5%, US Nat Gas +1.5%, RBOB +0.3%.

CURRENCIES:   

In currency markets, the dollar fell versus all Group-of-10 peers as the market positioned before key US inflation data. The yen outperforms as investors boosted
bets for a BOJ rate hike by July to 70% from around 50% earlier this month following an unexpected reduction in its bond buying. Any future foreign-exchange intervention by Japan to support the yen would likely involve tapping its holdings of US Treasuries,
according to Bank of America. US$ Index -0.15%, GBPUSD +0.25%, EURUSD +0.15%, USDJPY -0.6%, AUDUSD +0.2%, USDCHF -0.2%, USDNOK -0.5%, NZDUSD +0.4%.

Spot Bitcoin +1.5%, Ethereum +0.5%.

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
• Campbell Soup (CPB) Raised to Market Perform at Bernstein; PT $46
• Dare Bioscience (DARE) Raised to Buy at Brookline Capital; PT $3
• General Mills (GIS) Raised to Market Perform at Bernstein; PT $70
• Janus Henderson (JHG) Raised to Buy at TD Cowen; PT $37
• NIO Inc. (NIO) ADRs Raised to Neutral at JPMorgan; PT $5.40
• Pure Storage (PSTG) Raised to Strong Buy at CFRA; PT $67
• TKO (TKO) Raised to Buy at TD Cowen; PT $127
• Downgrades
• A-Mark Precious Metals (AMRK) Cut to Neutral at B Riley; PT $33
• Accenture (ACN) Cut to Hold at Deutsche Bank; PT $295
• Altus Power (AMPS) Cut to Neutral at JPMorgan
• Bolt Biotherapeutics (BOLT) Cut to Neutral at HC Wainwright
• Cut to Market Perform at Leerink; PT $1
• Cut to Hold at Stifel; PT $1.50
• Cut to Neutral at Guggenheim
• Brookfield Asset Management (BAM CN) Cut to Neutral at JPMorgan
• MVB Financial (MVBF) Cut to Market Perform at Hovde Group; PT $21
• Petrobras (PETR4 BZ) ADRs Cut to Hold at Jefferies; PT $17.70
• Rallybio (RLYB) Cut to Neutral at JPMorgan
• Roblox (RBLX) Cut to Hold at Accountability Research; PT $40
• Sierra Bancorp (BSRR) Cut to Neutral at Janney Montgomery; PT $23
• Six Flags (SIX) Cut to Hold at Deutsche Bank
• Squarespace (SQSP) Cut to Neutral at Seaport Global Securities
• SunPower (SPWR) Cut to Underperform at Wolfe
• Surf Air Mobility (SRFM) Cut to Hold at Canaccord; PT $1
• Initiations
• Arista Networks (ANET) Reinstated Buy at William O’Neil
• Exxon (XOM) Resumed Overweight at Morgan Stanley; PT $145
• Granite Ridge Resources (GRNT) Rated New Buy at Roth MKM; PT $8.80
• Integer (ITGR) Rated New Buy at Truist Secs; PT $137
• Lightspeed Commerce Inc (LSPD CN) Rated New Hold at Jefferies; PT C$19
• Newamsterdam Pharma (NAMS) Rated New Buy at TD Cowen
• Wave Life Sciences (WVE) Rated New Overweight at Wells Fargo; PT $11

Data sources: Bloomberg, Reuters, CQG