Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET GDP (revised), Personal Consumption, Initial Jobless Claims, Advance Goods Trade
Balance, Wholesale and Retail Inventories; 10:00ET
Pending Home Sales; 12:05ET Fed’s Williams speaks; 5:00ET Fed’s Logan speaks

First-quarter US GDP will probably be revised lower to a 1.3% annualized rate from 1.6%

HIGHLIGHTS and News:  

• Amazon is increasing its stake in Grubhub to as much as 18%
• Large US banks may be more exposed to commercial property than regulators thought
• US government nears an agreement to bankroll a late-stage trial of Moderna’s bird flu vaccine
• Nelson Peltz sold his entire Disney stake, CNBC reported
• Goldman Sachs says soft landing still the base case

Global equities are headed for their worst week since mid-April on worries that global interest rates would stay higher for longer due to stickier inflation readings.
Global bond markets face the biggest amount of net sovereign issuance so far this year, just as economic data throws rate cuts into doubt. Data this week could prove key as investors refine their monetary policy outlook, with inflation reports from the US
and Europe due Friday. A stronger-than-anticipated inflation report on Friday may not hinder the European Central Bank from reducing borrowing costs next week, but it could potentially impact future policy decisions.    

EQUITIES: 

US equity futures extended declines as Treasury yields near the highest level this year on concerns about restrictive monetary policy. Focus today will be on the US gross domestic product
numbers, while the main highlight of the week is Friday’s PCE price index report – the Fed’s preferred measure of inflation. Expectations are for it to hold steady on a monthly basis. In extended trading, Salesforce (CRM) plunged around 16% post-market after
missing revenue expectations for Q1 while outlook for the second quarter also fell short of estimates. Retailer American Eagle Outfitters also declined about 10% after first-quarter revenue missed analysts’ forecasts.   

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.3%, Russell 2000 +0.2%, DJI -0.9%

In pre-market trading, Agilent (A) tumbles 13% after the life-sciences company cut its profit and sales forecast for the full year. American Eagle (AEO) drops 7% after the apparel retailer’s
first-quarter net revenue narrowly missed consensus estimates. Birkenstock (BIRK) jumps 8% after the sandal maker’s revenue forecast for the year came ahead of analyst expectations. C3.ai (AI) climbs 10% after the software company forecast 2025 revenue well
above the average analyst estimate. Foot Locker (FL) gains 13% after posting earnings that surpassed expectations. HP Inc. (HPQ) rises 5% after the company reported net revenue for the second quarter that beat estimates. Moderna (MRNA) advances 2% after the
Financial Times reported that the US government is nearing an agreement to bankroll a late-stage trial of the biotech firm’s mRNA pandemic bird flu vaccine. Nutanix (NTNX) drops 12% after the infrastructure software company gave a fourth-quarter revenue forecast
that trailed estimates. Okta (OKTA) climbs 4% after the security software company raised its full-year forecast. Pure Storage (PSTG) gains 9% after the cloud storage provider’s results beat estimates. UiPath (PATH) plummets 30% following a disappointing full-year
forecast and the surprise departure of its CEO. Dell Technologies, Costco, Gap and Nordstrom will report earnings after the bell.

The DJIA and Russell 2000 Indices are now both below their
50 day moving averages.

European gauges nudged up after touching a three-week low, led higher by telecom and banking stocks. Markets are pricing in around 60 basis points of easing from the ECB this year, implying
two quarter-point rate cuts and around a 40% chance of a third. Sweden’s first-quarter GDP increased by 0.7%, versus expectations of a contraction. Data released today showed Spanish inflation quickened for a third month.  Europe’s Stoxx 600 edged higher amid
gains for drugmaker Novo Nordisk A/S and online car marketplace Auto Trader Group. European renewables stocks were being lifted by a renewed focus on M&A after Brookfield announced it’s in exclusive talks to acquire a majority stake in French renewable energy
developer Neoen SA. Stoxx 600 +0.2%, DAX ~flat, CAC +0.15%, FTSE 100 +0.3%. Banks +1.2%, Telecomm +0.9%, Retail +0.8%, Healthcare +0.6%, REITS +0.6%. Technology -0.8%, Basic Resources -0.4%.

Asian stocks were broadly lower, led by drops in Indonesia and Korean equities.  The MSCI Asia Pacific Index fell 1% to touch its lowest level in three weeks, with TSMC, Samsung and Toyota
among the biggest drags. Japan’s key benchmarks retreated as the country’s long-term yields continued to rise. The Kospi led losses in the region, dragged by Samsung after the firm’s labor union said Wednesday it plans to carry out its first strike ever. India’s
Sensex fell for fifth straight day ahead of the outcome of national elections next week. Kospi -1.55%, Indonesia -1.5%, Taiwan -1.4%, Hang Seng Index -1.3%, Nikkei 225 -1.3%, Sensex -0.8%, CSI 300 -0.5%, ASX 200 -0.5%.

FIXED INCOME: 
 

Treasuries hold small gains following two-day selloff.  Another weak US auction result on Wednesday heightened worries that funding the US deficit will drive up yields.
The Fed’s Raphael Bostic said many inflation measures are moving back to their target range. He said if prices and the labor market move to a more “stable-growth stance,” officials may be prepared to cut rates in the fourth quarter. US yields are richer by
1bp to 2bp across the curve with 10-year around 4.59%. 2s10s and 5s30s curves remain notably steeper on the week.  

METALS: 

Gold was muted overnight, with market spotlight on key US economic data that could shed some light on the Federal Reserve’s interest rate move. According to the CME
FedWatch Tool, traders see a 48% chance of a rate cut by September. The rally in metals has more room, Goldman said. It sees an additional upside of 15% for copper by year-end adding gold may jump 14% on solid demand from emerging markets. Gold remains positive
short term as it holds above the 50dma (2332). Spot gold ~flat, silver -2%.

ENERGY:   

Oil prices fluctuated around nearly one-month highs as traders look to US stockpile data and an OPEC+ meeting on the weekend for more clarity on the supply and demand
outlook. US crude inventories fell by 6.5 million barrels last week, the API reported. That would be the largest drop since January, if confirmed by the EIA today. Saudi Arabia is preparing to formally launch a secondary offering of shares in oil giant Aramco
as soon as Sunday, a deal that could raise more than $10 billion.  WTI is flat, Brent -0.2%, US Nat Gas +0.4%, RBOB -0.4%.

CURRENCIES:   

In currency markets, the dollar is slightly weaker as US Treasury yields slipped back while commodity prices came under pressure on renewed expectations that the
Federal Reserve is unlikely to cut rates any time soon. The yen outperformed most of its Group-of-10 peers, rebounding from a level where Japan’s authorities were suspected to have stepped into the market earlier this month. The Swiss franc is the strongest
in G-10 FX, rising 0.7% against the greenback after SNB President Jordan warned a weaker currency is currently the most likely source of higher inflation and could be offset with FX sales.  US$ Index -0.2%, GBPUSD +0.1%, EURUSD +0.15%, USDJPY -0.55%, AUDUSD
+0.2%, USDCHF -0.7%, NZDUSD -0.1%, USDNOK -0.5%.

Spot Bitcoin +0.7%, Ethereum -0.2%. 

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
• C3.ai (AI) Raised to Outperform at Northland; PT $35
• Corning (GLW) Raised to Overweight at JPMorgan; PT $43
• Datadog (DDOG) Raised to Buy at BofA; PT $155
• ERO Copper (ERO CN) Raised to Sector Outperform at Scotiabank; PT C$40
• International Game (IGT) Raised to Buy at Stifel; PT $26
• Okta (OKTA) Raised to Outperform at Evercore ISI
• PayPal (PYPL) Raised to Buy at Mizuho Securities; PT $90
• Perficient (PRFT) Raised to Outperform at Barrington Research; PT $77
• Radius Recycling Inc (RDUS) US Raised to Neutral at Seaport Global Securities
• U.S. Cellular (USM) Raised to Overweight at Wells Fargo; PT $75
• USA Compression Partners (USAC) Raised to Neutral at Mizuho Securities
• Vizio Holding (VZIO) Raised to Outperform at Barrington Research
• Downgrades
• Bitfarms/Canada (BITF CN) Cut to Hold at Stifel Canada; PT C$3.15
• Ciena (CIEN) Cut to Neutral at Rosenblatt Securities Inc; PT $52.50
• First Solar (FSLR) Cut to Neutral at Mizuho Securities; PT $274
• Generac (GNRC) Cut to Sell at Guggenheim; PT $120
• Nutanix (NTNX) Cut to Market Perform at Northland; PT $71
• Oscar Health (OSCR) Cut to Neutral at BofA; PT $21
• Salesforce Inc (CRM) Cut to Neutral at Fubon; PT $290
• Cut to Hold at Punto Casa de Bolsa; PT $274.83
• UiPath (PATH) Cut to Hold at Truist Secs; PT $14
• Cut to Market Perform at William Blair
• Cut to Hold at TD Cowen; PT $17
• Cut to Sector Weight at KeyBanc
• Initiations
• Abbott (ABT) Rated New Buy at Goldman
• Abeona Therapeutics (ABEO) Rated New Buy at Stifel; PT $21
• Adaptimmune (ADAP) ADRs Rated New Sector Outperform at Scotiabank
• ADC Therapeutics (ADCT) Rated New Overweight at Cantor
• Agilon Health (AGL) Rated New Neutral at Baird; PT $6
• Alignment Healthcare (ALHC) Rated New Outperform at Baird; PT $10
• Amicus (FOLD) Rated New Overweight at Wells Fargo; PT $18
• ARM Holdings PLC (ARM) ADRs Rated New Market Perform at CICC; PT $102
• Astrana Health Inc (ASTH) Rated New Outperform at Baird; PT $54
• AstraZeneca (AZN LN) ADRs Rated New Buy at Goldman; PT $97
• Baxter (BAX) Rated New Neutral at Goldman
• Becton Dickinson & Co (BDX) Rated New Buy at Goldman
• Boston Scientific (BSX) Rated New Buy at Goldman
• Centene (CNC) Rated New Neutral at Baird; PT $83
• Chesapeake Utilities (CPK) Rated New Equal-Weight at Barclays; PT $111
• Cigna (CI) Rated New Outperform at Baird; PT $388
• Codexis (CDXS) Rated New Overweight at Cantor; PT $11
• Rated New Buy at HC Wainwright; PT $11
• CVS (CVS) Rated New Neutral at Baird; PT $61
• Dexcom Inc (DXCM) Rated New Neutral at Redburn; PT $130
• Edwards Life (EW) Rated New Buy at Goldman
• Elevance (ELV) Rated New Outperform at Baird; PT $649
• Evry (EVRY NO) TriSalus Life Sciences Rated New Buy at Canaccord; PT $12
• Forte Biosciences Inc (FBRX) Rated New Buy at Brookline Capital; PT $4
• GE Healthcare (GEHC) Rated New Neutral at Goldman; PT $87
• GSK (GSK LN) ADRs Rated New Neutral at Goldman; PT $47
• HCA Healthcare (HCA) Rated New Outperform at Baird; PT $396
• Humana (HUM) Rated New Neutral at Baird; PT $374
• Inozyme (INZY) Rated New Overweight at Wells Fargo; PT $14
• Insulet (PODD) Rated New Buy at Redburn; PT $235
• Intuitive Surgical (ISRG) Rated New Buy at Goldman
• Janux Therapeutics (JANX) Rated New Sector Perform at Scotiabank
• Medtronic (MDT) Rated New Sell at Goldman; PT $83
• Molina (MOH) Rated New Outperform at Baird; PT $405
• Novartis (NOVN SW) ADRs Rated New Buy at Goldman; PT $120
• Novo (NOVOB DC) ADRs Rated New Buy at Goldman; PT $156
• Oscar Health (OSCR) Rated New Outperform at Baird; PT $28
• PDD (PDD) ADRs Rated New Buy at President Capital Management; PT $185
• PNM Resources (PNM) Resumed Inline at Evercore ISI; PT $38
• Privia Health (PRVA) Rated New Outperform at Baird; PT $23
• Solventum (SOLV) Rated New Sell at Goldman; PT $54
• Stryker (SYK) Rated New Neutral at Goldman
• Tandem Diabetes (TNDM) Rated New Buy at Redburn; PT $60
• Tenet (THC) Rated New Outperform at Baird; PT $153
• UnitedHealth (UNH) Rated New Outperform at Baird; PT $597
• Universal Health (UHS) Rated New Neutral at Baird; PT $198
• Zimmer Biomet (ZBH) Reinstated Neutral at Goldman; PT $129

Data sources: Bloomberg, Reuters, CQG