Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Personal Income – Spending, PCE Deflator;* 9:45ET MNI Chicago PMI; 6:15ET Fed’s Bostic
speaks

HIGHLIGHTS and News:  

• Political betting markets put Trump’s election chances above 50% for the first time
• ZELENSKIY SAYS USE OF F-16 TO HIT RUSSIA ‘IS QUESTION OF TIME’

Global shares were little changed in muted trading as investors await key US inflation figures that will shape the Federal Reserve’s thinking on interest rates when
it meets mid-June.  The MSCI All Country Stock index was flat, down nearly 2% on the week, though still up more than 7% for the year. Data showed that euro-area inflation accelerated more than anticipated, potentially blunting the scope for interest rate cuts.
A survey showed economists anticipate six 25-bp ECB reductions, one fewer than predicted in April. China’s manufacturing activity unexpectedly fell in May, an official factory survey showed today, keeping alive calls for fresh stimulus.    

EQUITIES:  MSCI Rebalance Today

US equity futures extend recent losses, led by the Nasdaq after Dell disappointed post-market as its AI server sales failed to impress. It was another round of weaker-than-expected earnings
results in the technology sector, with shares of MongoDB (MDB), Marvel (MRVL), and Sentinel (S) all pointing to losses ahead of key inflation data this morning. The Fed’s favored inflation gauge may bring some support to markets, with the core PCE deflator
forecast to have moderated to 0.2% in April, the slowest monthly pace this year. Personal spending and income also probably cooled. Meanwhile, about $4.3 billion flowed into US equity funds in the week through May 29, a sixth straight week of additions, according
to BofA strategists, citing EPFR Global data.    

Futures ahead of the data: E-Mini S&P -0.1%, Nasdaq -0.2%, Russell 2000 -0.1%, DJI -0.05%

In pre-market trading, Dell Technologies (DELL) sinks 15% after its first revenue increase since 2022 wasn’t enough to impress investors with high expectations for the company’s AI server
business. Asana (ASAN) rises 12% as analysts say the software company’s 1Q results show signs of demand stabilization. Gap (GPS) soars 23% after the retailer reported better-than-expected results and raised its outlook for the full year. Marvell Technology
(MRVL) falls 5% after reporting revenue and guidance that was in-line. MongoDB (MDB) plummets 24% after the database software company cut its full-year forecast. Nordstrom (JWN) slips 6% after the apparel retailer’s first-quarter adjusted Ebitda missed estimates.
PagerDuty (PD) rises 7% after the wireless applications company boosted its profit forecast for the full year. SentinelOne (S) slumps 12% after the security software company cut its FY25 revenue guidance. Ulta (ULTA) jumps 7% after the beauty retailer reported
1Q profit that came in ahead of estimates. VF (VFC) rises 5% after the company named Sun Choe, from Lululemon, as global brand president of Vans. Zscaler (ZS) surges 15% after the security software firm’s results beat estimates and it raised its full-year
forecast.

XLK relative to the S&P500 hit key resistance.

Utilities outperforming as XLU/SPY holds 200dma in the pair

European gauges were choppy after fresh euro zone data showed inflation picked up slightly in May ahead of an anticipated rate cut from the European Central Bank next week. The Stoxx
600 Index is little changed with gains in telecoms and energy stocks countering losses in the technology sector.  Among individual movers, JD Sports Fashion shares fell after the retailer reported earnings and cut its dividend. Banks were also in focus, with
Spain’s Banco Bilbao Vizcaya Argentaria SA calling an extraordinary general shareholders meeting over its Banco de Sabadell SA bid. Natwest Group shares edged higher as the UK government cut its stake in the lender.  Stoxx 600 +0.1%, DAX -0.1%, CAC -0.05%,
FTSE 100 +0.45%.  Energy +0.75%, Insurance +0.6%, Telecomm +0.5%. Technology -1%, Travel -0.8%, Retail -0.7%.

Asian equities were mixed after failing to hold initial gains and ended with a second straight weekly decline. Hong Kong and Taiwan underperformed while contraction in factory activity
weighed on Chinese shares. The MSCI Asia Pacific Index rose as much as 0.7% before trading little changed as TSMC, Tencent and Alibaba were among the biggest drags. Japan and New Zealand were among the key gainers, while a rebound in Samsung helped Korean
shares. Topix +1.7%, ASX 200 +1%, Philippines +1%, CSI 1000 +0.4%, Sensex +0.1%, Kospi +0.05%. Vietnam -0.35%, CSI 300 -0.4%, Hang Seng Index -0.8%, Taiwan -0.9%, Indonesia -0.9%.

FIXED INCOME: 
 

Treasuries are slightly cheaper across the curve with losses led by front-end, following a more aggressive selloff across bunds. Ten-year bund yields advanced five
basis points after the European data showed consumer prices rose 2.6% from a year ago in May. US front-end yields cheaper by 1bp-2bp with 10-year around 4.555%. Focal points of the US session include PCE deflator data. Treasuries may collect support from month-end
buying flows, with a larger-than-average extension estimated for June.  Ahead of PCE price gauges, OIS contracts price in ~30bp of rate cuts for the December policy meeting.

METALS: 

Gold fluctuated, headed toward a small weekly gain after a report signaled slowing momentum in the US economy, ahead of fresh inflation data that may offer clues
on the Federal Reserve’s rate path. Gold has largely traded in a narrow band this week amid a lack of new insight into how inflation is tracking. Markets are keenly awaiting the personal consumption expenditures price index due this morning, with the print
expected to suggest that price pressures moderated in April.  Spot gold +0.05%, silver +0.3%.

ENERGY:   

Oil prices struggled for momentum ahead of Sunday’s OPEC+ meeting on extending output curbs. OPEC+ is moving closer to a deal on output cuts that may stretch into
2025, officials said. The alliance is likely to extend the current 2.2 million barrels per day production cuts, four anonymous OPEC+ delegates told CNBC.  The group would want to avoid an abrupt change in course amid relatively stable oil prices in recent
weeks, one of these delegates said. Meanwhile, India’s imports of Russian ESPO oil jumped after demand from China tumbled.  WTI -0.15%, Brent +0.01%, US Nat Gas -0.9%, RBOB +0.4%.

CURRENCIES:   

In currency markets, The euro headed for its first monthly gain this year, reversing intraday losses as euro-area inflation accelerated more than anticipated. Consumer
prices rose 2.6% from a year ago in May, up from 2.4% in April, Eurostat said. The dollar was steady against peer currencies ahead of the US inflation data. Japan spent a record $62.2 billion in the past month to prop up the yen, surpassing the amount it used
in 2022 to defend the currency, the finance ministry disclosed. US$ Index -0.1%, GBPUSD -0.1%, EURUSD +0.2%, USDJPY +0.2%, AUDUSD +0.3%, USDCHF +0.15%, NZDUSD +0.3%, USDNOK -0.6%.

Spot Bitcoin -0.1%, Ethereum +1.8%.

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
• Asana (ASAN) Raised to Neutral at Piper Sandler; PT $16
• Bilibili (BILI) ADRs Raised to Buy at UBS; PT $18
• Brookfield Asset Management (BAM CN) Raised to Buy at CFRA; PT $44
• Century Communities (CCS) Raised to Neutral at Wedbush; PT $82
• Fifth Third (FITB) Raised to Outperform at Wolfe; PT $43
• Hancock Whitney (HWC) Raised to Outperform at KBW; PT $55
• Heartland Financial (HTLF) Raised to Outperform at KBW; PT $54
• Hormel (HRL) Raised to Neutral at JPMorgan; PT $29
• Independent Bank Group (IBTX) Raised to Overweight at Piper Sandler
• Leafly Holdings (LFLY) Raised to Buy at WestPark Capital; PT $9.18
• LeMaitre Vascular (LMAT) Raised to Buy at Roth MKM; PT $100
• NetApp Inc (NTAP) Raised to Neutral at JPMorgan; PT $125
• Seacoast Banking (SBCF) Raised to Outperform at KBW; PT $27
• UMB Financial (UMBF) Raised to Outperform at KBW; PT $98
• Wynn Resorts (WYNN) Raised to Buy at Seaport Global Securities; PT $116
• Downgrades
• Cactus (WHD) Cut to Accumulate at Johnson Rice; PT $61
• Calliditas Therapeutics (CALTX SS) ADRs Cut to Neutral at Citi; PT $39
• ConnectOne Banc (CNOB) Cut to Market Perform at KBW; PT $22
• Marathon Oil (MRO) Cut to Equal-Weight at Wells Fargo; PT $29
• OceanFirst (OCFC) Cut to Market Perform at KBW; PT $18
• Valley National (VLY) Cut to Market Perform at KBW; PT $8
• Initiations
• Abacus Life (ABL) Rated New Buy at B Riley; PT $16
• AC Immune (ACIU) Rated New Buy at BTIG; PT $8
• Aileron Therapeutics (ALRN) Rated New Buy at Brookline Capital; PT $7
• Allogene (ALLO) Rated New Overweight at Piper Sandler; PT $11
• Apellis Pharma (APLS) Rated New Neutral at Piper Sandler; PT $46
• Arcellx (ACLX) Rated New Overweight at Piper Sandler; PT $70
• Birkenstock (BIRK) Rated New Buy at William O’Neil
• DATA Communications Management (DCM CN) Rated New Buy at Canaccord
• Elevation Oncology (ELEV) Rated New Overweight at Piper Sandler; PT $10
• Federal Signal (FSS) Rated New Outperform at William Blair
• German American (GABC) Resumed Market Perform at Hovde Group; PT $34
• Immunome (IMNM) Rated New Overweight at Piper Sandler; PT $27
• Landsea Homes (LSEA) Rated New Outperform at Oppenheimer; PT $14
• Lionsgate Studios (LION) Rated New Buy at Citi; PT $14
• New Gold (NGD CN) Resumed Outperform at BMO; PT $3.50
• Ocular Therapeutix (OCUL) Rated New Overweight at Piper Sandler; PT $15
• PayPal (PYPL) Rated New Buy at New Street Research; PT $80
• Quad/Graphics (QUAD) Rated New Buy at Rosenblatt Securities Inc
• Regulus Therapeutics (RGLS) Rated New Buy at JonesTrading; PT $8
• Rubrik (RBRK) Rated New Overweight at Cantor; PT $50
• Sarepta (SRPT) Rated New Overweight at Piper Sandler; PT $157
• Solid Biosciences (SLDB) Rated New Overweight at Piper Sandler; PT $20
• Vestis (VSTS) Rated New Market Perform at William Blair

Data sources: Bloomberg, Reuters, CQG