Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:00ET House Price Purchase Index, FHFA House Price Index; 9:55ET Fed’s Kashkari speaks;
10:00ET Conf. Board Consumer Confidence; 10:30ET Dallas Fed Manf. Activity; 11:30ET 2-Year Auction; 1:00ET 5-Year Note Auction; 1:05ET Fed’s Cook, Daly speak

HIGHLIGHTS and News:  

• Wall Street Returns to T+1 Stock Trading After a Century
• Apple’s China iPhone Shipments Up 52%
• Goldman Sachs Global Semiconductor Conference today in New York
• NBA Hall of Famer Bill Walton died after a long fight with cancer at 71
• Gold futures are higher after testing key 50dma support on Friday
• Crude oil prices held key 200-week mvg averages; RBOB holds 200-day mvg avg support

Global stocks held near all-time highs as investors awaited inflation data from both sides of the Atlantic due later in the week. Traders were keeping an eye on the
shift to a shorter settlement in US trading but there were few major moves. Volumes on many key gauges were 15-20% below 30-day averages after US and UK markets were closed on Monday. Market focus this week includes eurozone consumer price data, with individual
inflation readings from Germany, Spain, and France also expected. Additionally, US inflation data is due on Friday, and the MSCI rebalancing at the end of the week.  

EQUITIES: 

US equity futures nudge higher as markets reopened in the US, helped by news that Apple’s iPhone sales in China rebounded, with shipments rising 52% amid a flurry of discounts from retailers.
Federal Reserve Bank President Neel Kashkari said overnight that policymakers don’t need to hurry rate cuts and should take their time in monitoring whether inflation is slowing enough to warrant interest-rate cuts. The focus now shifts to economic data, including
consumer confidence today and especially PCE, the central bank’s favored inflation gauge, on Friday. In corporate news this morning, T-Mobile US agreed to buy much of US Cellular’s operations in a roughly $4.4 billion deal that would bring more consolidation
to the wireless industry.

Futures ahead of the bell: E-Mini S&P +0.15%, Nasdaq +0.25%, Russell 2000 +0.5%, DJI -0.1%

In pre-market trading, Apple (AAPL) shares gain over 2% after new figures showed an iPhone sales rebound in China last month. Crowdstrike (CRWD) gains 2% as Morgan Stanley boosts its
price target on the stock and names it as a top pick. GameStop (GME) jumps 26% as the video-game retailer extends Friday’s post-market gains, which were triggered by the company raising almost $1 billion in a share sale. Nvidia (NVDA) shares gain more than
2%, putting the chipmaker on track to extend its post-earnings rally for a third consecutive session. Arcturus Therapeutics (ARCT) jumps 16% after the biotech gave an update on patients in a clinical trial of its experimental treatment for cystic fibrosis.
Agios Pharmaceuticals (AGIO) rises 21% after agreeing to sell its rights to its 15% royalty on potential US net sales of Servier’s vorasidenib to Royalty Pharma.  Atrion (ATRI) rises 4% after agreeing to be purchased by Nordson for $460 per share. T-Mobile
US (TMUS), the second-largest wireless carrier in the US, has agreed to buy US Cellular Corp.’s wireless operations and some of its spectrum assets for roughly $2.4 billion. Shares of US Cellular (USM) and Telephone and Data Systems (TDS) gain 8% and 6%.

European gauges slipped, reversing early gains, as investors awaited inflation data later this week for clues on the outlook for interest-rate cuts. ECB cuts in June and July shouldn’t
be ruled out, policymaker Francois Villeroy said. Meanwhile, inflation expectations of consumers in the euro zone edged lower in April. Prices are seen advancing 2.9% over the next 12 months, the lowest since September 2021. The Stoxx 600 Index is slightly
lower, with gambling operator Flutter Entertainment dragging down the travel and leisure sector. Flutter dropped as much as 4.8% as a progressive sports betting tax passed in the Illinois senate on Saturday posed a headwind. Insurance and personal care stocks
also underperformed, while real estate and autos gained. Stoxx 600 -0.2%, DAX +0.05%, CAC -0.5%, FTSE 100 -0.3%. Travel & Leisure -1.5%, Insurance -0.5%, Food & Bev -0.4%. REITs +1.1%, Autos +0.4%.

Asian equities were mixed in lackluster trading following a rally in previous session. MSCI Asia Pacific Index rose 0.2%, with notable gains in in Vietnam and Indonesia. Chinese property
shares advanced after Shanghai lowered down-payment ratios and the minimum mortgage threshold. The nation’s chip stocks extended a rally after major state banks said they will pour $15.7 billion into the largest-ever investment fund for the local industry.
Vietnam +1.1%, Indonesia +1.1%, Singapore +0.35%, Taiwan +0.25%, Topix +0.1%, Kospi was flat. Hang Seng Index -0.03%, Nikkei 225 -0.1%, ASX 200 -0.3%, Sensex -0.3%, CSI 300 -0.7%, Philippines -1.1%. 

FIXED INCOME: 
 

Treasuries are narrowly mixed with the front-end outperforming, following wider gains across the gilt curve after BOE’s Broadbent said disinflation is “getting there.” 
The US session features two auctions, 2-year notes at 11:30am New York time and 5-year notes at 1pm EST.  US 2-year yields are richer by around 2bp on the day while yields are marginally cheaper further out the curve, steepening 2s10s spread by ~2bps.  10-year
is little changed at 4.465%.

METALS: 

Gold fluctuated as traders look ahead to the release of US inflation data on Friday, which could influence the Federal Reserve’s decision on future interest rate
adjustments. Traders currently price in about 64% chance of a rate cut by November, according to the CME FedWatch Tool.  Gold futures held its 50 day moving average support on Friday, which it hasn’t been below since the end of February. Spot gold -0.1%, silver
-0.05%.

ENERGY:   

Oil prices bounce as traders look ahead to OPEC+ decision on production cuts next weekend. The decision to hold the meeting online, rather than in person, is being
read as a sign members aren’t expecting any major disagreements after a chaotic November meeting that initially left oil traders confused and also saw Angola leave OPEC. An Egyptian soldier was killed during a clash at the Rafah border crossing, further inflaming
tensions after an Israeli airstrike killed an estimated 45 Palestinians at a camp for displaced people. The White House is assessing if the strike violated President Biden’s “red line,” Axios reported. Iran increased its stockpile of near bomb-grade uranium,
a move that could flame tensions across the wider Middle East as Tehran prepares to hold presidential elections next month. WTI didn’t settle Monday due to the Memorial Day holiday.  WTI +1.5%, Brent +0.1%, US Nat Gas -1.1%, RBOB +0.7%.

CURRENCIES:   

In currency markets, the dollar traded lower versus Group-of-10 peers as markets in the UK and the US reopen after holidays. US Consumer confidence data due this
morning and personal consumption expenditures figures later this week may provide further clues on the Fed’s policy path. Sterling traded in a narrow range while data from the British Retail Consortium found shop price rises slowed in early May. The yen is
modestly higher. Japan’s service prices rose at the fastest clip in over 30 years; BOJ has highlighted the print as a key measure of the spread of inflation throughout the wider economy. US$ Index -0.2%, GBPUSD +0.15%, EURUSD +0.2%, USDJPY -0.1%, AUDUSD +0.2%,
USDCHF -0.3%, NZDUSD +0.2%, USDSEK -0.75%.

Spot Bitcoin -2%, Ethereum +0.1%. Bitcoin retreated as traders monitored transfers by wallets belonging to the failed Mt. Gox exchange. Riot Platforms has taken a
9.25% stake in Bitfarms Ltd. and plans to go public with a takeover offer for the smaller Bitcoin miner.

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
• Autoliv (ALV) Raised to Buy at UBS
• CytomX (CTMX) Raised to Overweight at Piper Sandler; PT $3.50
• Deckers Outdoor (DECK) Raised to Buy at Truist Secs; PT $1,200
• Duolingo (DUOL) Raised to Market Outperform at JMP; PT $260
• DuPont de Nemours (DD) Raised to Buy at Citi; PT $95
• Expeditors (EXPD) Raised to Peerperform at Wolfe
• Expensify (EXFY) Raised to Equal-Weight at Morgan Stanley; PT $2
• Forward Air (FWRD) Raised to Peerperform at Wolfe
• Futu Holdings (FUTU) ADRs Raised to Overweight at JPMorgan; PT $92
• Huntington Bancshares (HBAN) Raised to Overweight at JPMorgan; PT $18
• Norwegian Cruise (NCLH) Raised to Buy at Mizuho Securities; PT $24
• On Holding (ONON) Raised to Buy at Truist Secs; PT $46
• Parker-Hannifin (PH) Raised to Buy at Mizuho Securities; PT $650
• Sunstone Hotel (SHO) Raised to Outperform at Baird; PT $12
• Sysco (SYY) Raised to Buy at Guggenheim; PT $85
• Downgrades
• AFC Gamma (AFCG) Cut to Sell at Compass Point; PT $10
• Live Nation (LYV) Cut to Neutral at Northcoast
• Premier Health of America (PHA CN) Cut to Speculative Buy at Acumen
• Sarepta (SRPT) Cut to Sector Perform at RBC; PT $142
• Triumph Group (TGI) Cut to Hold at TD Cowen; PT $14
• Zscaler (ZS) Cut to Neutral at Rosenblatt Securities Inc; PT $190
• Cut to Equal-Weight at Wells Fargo; PT $182
• Initiations
• Alta Global Group (MMA) Rated New Buy at ThinkEquity; PT $7
• Amer Sports (AS) Rated New Buy at Sealand Securities
• Anglogold (AU) Rated New Overweight at ABSA Securities; PT $28.06
• Asur (ASURB MM) ADRs Rated New Overweight at Morgan Stanley; PT $415
• Azul (AZUL4 BZ) ADRs Reinstated Equal-Weight at Morgan Stanley; PT $7.40
• Bunge Global (BG) Rated New Outperform at CICC; PT $123.20
• Civitas Resources Inc (CIVI) Rated New Outperform at RBC; PT $90
• Dell Technologies (DELL) Rated New Buy at Aletheia Capital; PT $240
• Fortrea (FTRE) Rated New Neutral at Mizuho Securities; PT $27
• iBio (IBIO) Rated New Buy at Chardan Capital Markets; PT $5
• iQIYI (IQ) ADRs Rated New Hold at Baptista Research; PT $5.10
• ADRs Reinstated Buy at Soochow Securities
• Kratos (KTOS) Rated New Market Outperform at JMP; PT $27
• Medpace Holdings (MEDP) Rated New Buy at Mizuho Securities; PT $435
• Millicom (TIGO) Rated New Overweight at JPMorgan; PT $30
• Napco Security Technologies (NSSC) Rated New Buy at TD Cowen; PT $60
• Viking Holdings (VIK) Rated New Overweight at Wells Fargo; PT $35
• Rated New Neutral at Redburn; PT $29
• Rated New Overweight at JPMorgan; PT $34
• Rated New Buy at Stifel; PT $37
• Rated New Equal-Weight at Morgan Stanley; PT $31

Data sources: Bloomberg, Reuters, CQG